Here’s the formula:
(opportunities x deal value x win rate) / length of sales cycle = sales velocity
here are the metrics in more detail:
opportunities: this is the number of qualified leads in your pipeline during the period of time you’re measuring. Of course, you’ll want to focus on sales-qualified leads (sqls) specifically. Without a doubt, these are your most likely-to-convert leads.
Average deal value: this is the average revenue you generate from new customers over a set period of time. To find your deal value, divide your generated revenue by the number of deals closed. For example, if you bring in $100,000 in revenue during a quarter from 50 sales, your average deal value would be $2,000. ($100,000/50 = $2,000)
win rate: also known as conversion rate, the win rate is the afghanistan phone number list percentage of leads that turned into paying customers during the period of time you’re measuring. To calculate your win rate, divide the number of deals won by the number of opportunities. As an illustration, if you close one out of four leads over a sales quarter, your closing ratio is 25%. (1/4 = 0.25 or 25%)
length of sales cycle: this refers to the average length of time that it takes for a qualified lead to become a paying customer. This journey through the sales pipeline can take days, weeks, or even months. To calculate the length of a sales cycle, add up the total number of days that it took to close each sale in the time period you’re considering. Then, divide that sum by the total number of deals. For example, if you closed three deals in a week, including one in two days, one in four days, and one in six days, the length of your sales cycle would be four days.