Sales velocity

Sales velocity is the revenue per day a sales pipeline produces: qualified opportunities times win rate times average won value, divided by sales cycle length in days. Each factor comes from snapshots and outcomes, not the CRM summary. When it moves, the decomposition says which factor did; usually cycle length.

DefinitionSales velocity is the revenue per day a sales pipeline produces: qualified opportunities times win rate times average won value, divided by sales cycle length in days. Each factor comes from snapshots and outcomes, not the CRM summary. When it moves, the decomposition says which factor did; usually cycle length.

Sales velocity is how much revenue a sales pipeline produces per day. The sales velocity formula multiplies three factors, qualified opportunities, win rate and average won deal value, and divides by the length of the sales cycle in days. Each factor is computed from pipeline snapshots and closed outcomes, and when velocity changes, the decomposition shows which factor caused it.

Factors are not independent

More opportunities at a lower win rate is a different result from the same gain at the same rate.

From outcomes

Win rate from open probabilities and cycle from today's close dates are both wrong in the same direction.

How it is computed

Sales velocity = (qualified opportunities × win rate × average won deal value) ÷ sales cycle length in days

Qualified opportunities multiplied by win rate and by average won value, divided by the sales cycle in days.

Example

Eighty opportunities, a 25 percent win rate and $40,000 average value over a 90-day cycle gives about $8,900 a day: 80 × 0.25 × $40,000 = $800,000, divided by 90 days = $8,889.

Where it goes wrong

Treated as a target. It is four numbers multiplied together, and the useful question is which of the four moved. The four-factor sales velocity guide computes each factor from CRM data and decomposes a change.

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