Learn how to accelerate sales velocity and close more deals faster. This article covers the definition of sales velocity, factors that affect it, as well as tips on what you can do right now to increase your own company’s revenue growth.
A startup. SMB. A long-standing corporation. It doesn’t matter. You got sales objectives you gotta meet and the majority of sales goals include more deals closed in a shorter time frame. This is also known as sales velocity. But how can we accelerate sales velocity? And how can we define it first?
Sales velocity is a sales metric. It explains the amount of revenue you can probably close on a particular day. In essence, the higher your sales velocity, the quicker your business growth.
You can determine it with the following formula:
The number of open opportunities in the pipeline X win rate X average deal size. Then you divide all of this by the number of days in your sales cycles. What do you get from this? Your sales velocity.
Here is how it looks like:
Three Reasons Why Sales Velocity is Your Key Metric
Understanding the sales velocity brings a lot of value to the table.
That’s why before we even try to explain optimizing the sales velocity, let’s explore its importance. And how increasing your sales velocity leads to maximum revenue and scalable business.
1. You can always understand your current position
Sales velocity tells us a lot about a company’s potential revenue and health.
As a matter of fact, you can use only this metric to gauge your business success.
For instance, if you have increased your sales velocity for this month, the sales pipeline will experience more output. In other words, if you’re making more new business during the same time frame means your business growth is getting faster.
2. You’ll know where you want to go with your business
Sales velocity metric represents a key milestone in reaching your sales strategy targets and goals.
It’s hard to determine the value of one slow-moving, big-dollar, enterprise-level deal when compared to several off-the-shelf contracts.
However, with sales velocity, you’ll get a metric you can use for both of these contracts. The metric that tells you which verticals, cohorts, strategy, tactics, or segment is making the most revenue.
Like with any other metric, the point in sales velocity is wanting to move up and right.
3. You’ll get extra revenue
Yes, a smaller contract is closed faster than an enterprise-level opportunity. However, you need to optimize the sales pipeline for both types of contracts. The longer you need to close the deal, the less likely you will close it. Thus, when you fasten your sales velocity, you make it likely to improve your win rate across contracts of all sizes.
Five Key Reasons Why Your Sales Pipeline is Slow
Before we start talking about optimizing your sales velocity, let’s explore why deals get slower in the first place. Or even get stalled entirely. In essence, we can see five main reasons why opportunities get stuck, run into a bottleneck, or just move way too slow.
These five reasons are also your five main threats to the sales velocity.
1. Poor decision-making strength
If your contacts aren’t authorized to close the deals, you’ll have real big trouble closing them.
Even more, if your contacts require buy-ins from entire teams of C-levels before buying, you’ll need a helluva lot of time to close and get approval from everyone.
This is a typical sales velocity problem.
In fact, based on research from CEB, the typical B2B buying decisions include 6.7 various stakeholders. As a rule of thumb, the more people are included, the more likely the deals will stop before they’re through the pipeline.
2.Low resources
When you don’t have enough resources, you’ll likely stall the deal.
If the business you’re closing doesn’t have a budget for your product/service, they’ll surely stop the deal.
That’s why using frameworks like BANT to score and qualify leads is crucial. There’s one more problem that comes with resource shortages. Especially when you’re dealing with SaaS or tech products. It’s called time shortage.
If your prospects don’t have enough time to implement your new tools, learn about them, and onboard others, it will be up to you to explain why the workflow change is worthwhile.
3. Trying to avoid change
Inertia, unwillingness to change, and the status quo have stopped more deals than we can count.
In fact, based on the research from the Sales Benchmark Index, 57% of stopped deals are connected to the desire to keep the status quo. In other words, we don’t like change. Even when it comes with long-term gain.
If their existing solution is working, you’ll have a hard time explaining why it’s good to switch to your product.
You can make this easier, though.
Convince them why benefits from your product are worth the change. Address any concerns.
4. Troubles with closing deals
We all know that closing is one of the most coveted salesperson skills. If your team or you got trouble with this, identify and resolve the root issue. Typical closing errors include:
- No focus on the client. Don’t focus on closing. Focus on your client’s needs and wants. Listen to them. Resolve sales objections. Frame your solution based on their wants and needs.
- No storytelling. Share customer success stories. This way, you help prospects imagine their own success with your service/product. Also, stories empower your sales pitches. They trigger positive emotions and hormones associated with them. Stories earn customer trust as well.
- Too forceful closing. When you pressure people to buy before they’re prepared, you may force them off entirely. Rather than closing as fast as possible, concentrate on relationship development. This way, you’ll get long-term clients.
5. Not utilizing the right CRM
Salespeople often use CRM that’s wrong for them. Not wrong per se. Just for that case. This results in not spotting the ROI they require to justify the expense or opportunity pipeline movement.
For example, if the CRM isn’t capturing data from auto-updates and social media, you’re likely losing too much energy on manual entry.
Combining Art and Science: 11 Different Strategies for Improving the Revenue Growth
Now it’s time to talk about optimizing sales velocity.
The following strategies concentrate on increasing one of the four metrics we use to determine sales velocity. Specifically, how you can:
- Increase the conversion rate
- Scale your usual deal size
- Get more pipeline opportunities
- Make your sales cycle shorter
But before we start with practice, let’s explain the theory behind it.
For instance, you wish to raise your sales velocity by 150 percent. This will result in 2.5 bigger revenue generation per day. This does look like a mission impossible. You can’t wish this to be. But you can do something. Optimize the sales velocity. And thus get worthier deals in a shorter time.
Small improving steps in the sales process may significantly increase the sales velocity. And even change the direction of your company. Based on our 150% example, let’s explore how we’d do this.
Jumping from $100,00 to $150,00 is a 150% rise in sales velocity. You can drive this when you incrementally improve every factor we use to determine the sales velocity. All of them combined to increase the growth of revenue.
Since you know which indicators you use to calculate the sales velocity, you can easily determine which of them you can control. And thus improve the output.
Raise Pipeline Opportunities
The first way to improve the sales velocity is to improve the number of pipeline opportunities.
Even if other factors remain the same, more opportunities give you higher sales velocity.
Here are some strategies to improve this:
Increase the number of leads
Every sale starts with a lead. More brought, generated, or found leads means more opportunities for closing.
Most businesses struggle with generating leads. Some basic approaches include:
- Social selling
- Cold prospecting
- Pay per click
- Content Marketing
Go online. Educate and help your audience. On social media where they spend the most time. This will increase your lead amount. And thus the number of pipeline opportunities.
Lead Outreach Optimization
How do you contact your leads? How are you qualifying them? If there’s a big mismatch between the number of leads and opportunities, you’ll need to optimize how you qualify and contact those leads.
Some of the basic tips for this include:
- Closing the gap-follow up as fast as you can
- Optimizing your emails for open rate and delivery
- Testing your messaging
- The phone follows up after emails
- More follow-ups
Optimize lead to opportunity conversion rate
This is often the bottleneck in lots of companies. How to scale up opportunity generation?
Calling and emailing all day is, well, time better spent elsewhere. In fact, sales individuals lose a lot of work time on prospecting. While this does seem like time well spent, this also means less time to actually close the deals. This can blow back in your face.
Whether inbound or outbound, automate prospecting workflow. Your sales velocity will thank you. Automatically reaching out to a group of qualified leads increases your opportunity rate.
Follow this process to do it:
- Enter a group of qualified leads
- Open the campaign
- Push an individualized email sequence
- Flag (automatically) leads who opened or responded
- Begin a real convo
- When you got a fit, convert them into opportunities
Take care with leads who aren’t qualified
Never lower the quality of your leads to increase the number of opportunities.
More, but less qualified opportunities mean a lower win rate. Keep the quality. Whatever you do.
Close More Deals — Improve Conversion Rate
In other words, increasing the win rate. There’s no universal solution for this. But do take a look at your sales process and preparation. Is there anything you can improve?
Optimize the process of sales discovery
Usually, the sales discovery process is shallow.
A lot of us just dive into pitching. Without comprehending the limitations and true issues of buyers. You need a detailed understanding of your buyer’s issues and sales circumstances.
This way, you can position your solution a lot better.
Don’t spray-and-pray generic sales pitches. Don’t force them. Show an actual solution for particular issues. Improve your sales process by focusing on better sales discovery.
Based on Chorus’s research, more engaging questions increase lead-to-closed sales by 60%.
Two or five more are enough. This is the primary function of sales discovery. To begin the convo and find bridges between your solution and customer wants and needs. Improved discovery improves positioning. And the win rate itself.
Collect more intelligence
To win more deals, you need more data regarding buyers.
Selling blind means zero context for your prospects. Their wants and needs. And zero alignment as well. You can collect the starting data through discovery. Listen to podcasts where your buyers appear as well. This way, you’ll see their personal needs, wants, and lingo. Details about their life.
What happens when you already have the data? McKinsey states that better presale processes (such as discovery, qualification, and preparation) result in improved sales processes.
Quicker opportunity response
To improve your conversion rate and quicken the sales cycle, just respond faster to opportunities.
Since lots of sales individuals split their energy and time, opportunities may just sit in the sales pipeline.
Such ill-spent momentum lowers your sales rate.
Research states contact with the leads inside the first three minutes increases the conversion rate by almost 100%. Moreover, those that take more than a day to contact the leads are 60X less likely to qualify the leads when compared to ones who respond inside the first hour.
Just like with anything in business, the faster wins the day.
Automating sales may help here as well. It will free up the time, give you a quicker response rate, and contact as soon as the leads are comfortable to become sales opportunities. You can simply send messages automatically when certain conditions are met.
Raise Deal Size
This depends on the product you sell. Some are more suited for this than others. If you can raise deal size (when you can sell more products in one buying or raise the service scope), you will improve your sales velocity.
Strategize with upselling
The simplest way to increase deal size is to upsell.
But this is an elegant method.
Just forcing bigger deals gets you nowhere. The point is making the upselling into strategic opportunities for the clients.
During discovery, check whether a bigger deal/increased service scope provides benefits to the buyers.
Besides the starting problem, they’re trying to solve. For example, bigger solutions may streamline their work, resulting in more revenue for them. And you.
Sit in the market middle
People often overlook raising their average deal value through a focus on the middle of the market.
Lots of folks focus on volume (smaller, faster sales) or large wins (slow, enterprise-level deals). Yet, they ignore the market-mid. And this is where the majority of opportunities are.
When you adequately qualify for such deals, you get the best of everything:
- Dramatically bigger value of deals, compared to lower market deal
- Significantly quicker closing time than upper market deals
Combine both, and you get a profitable strategy.
Particularly when you focus on the lower market and quick deals. Going a bit up the market gets your foot through the door. Without the unneeded details.
Increase your price
A simple solution. If you can do it, go for it. Most businesses go with value-based prices.
This way, you can charge more if your product/service gives more value to the buyers. This isn’t a universal solution. But it is the right one to increase revenue, most of the time.
Make the Sales Cycle Shorter
The more time you need to close the deal, the lower your sales velocity.
While some do take a lot of time, shorten the ones you can.
When it makes sense, of course. First, think about the discovery and sales intelligence. Use them to make your sales cycle shorter. They’re directly tied to it.
Defining the timeline on-time
Do this if you can. Define the buying decision process timeline. You won’t only better prioritize and qualify your opportunities, you’ll also make an unofficial contract between you and the buyers regarding expectations from both sides.
Automate the funnel sequence and follow-ups
First, sync you and your opportunities. For this, develop automated, customized sequences and messages.
This will keep the deals moving through the sales pipeline. Most of the time, you’ll need five to eight touches for a sale. When you send these messages by hand, you’ll lose a lot of time. The time you can spend on more pressing stuff. This is why automation helps.
To quicken the sales velocity, use the right technology.
Smart sales tools and automation make a smooth sales pipeline. You will also quickly and easily transform leads into opportunities. And then, the opportunity to revenue. Why should you flip through daily tasks, cold call a borrowed list of leads, and fumble through spreadsheets? In 2021?
Nine Closing Tactics to Improve Sales Velocity
Closing is all about explaining why your buyer is making the right decision.
Fortunately, there are vetted tactics that help.
The following techniques create more mutually advantageous deals.
Make the Deal Sweeter
Do your clients require some extra persuasion? Give ‘em a special discount. Or a freebie. The more valuable the bonus, the sweeter the deal. If you don’t know what to offer, just ask yourself: “What would make me take the deal?”
If you’re truly devoted, take out the calculator and figure out how much more you can offer or save. Crunch the figures in front of your buyer. A simple, but effective method to show that what you offer, has bonus value.
Talk directly
You don’t need any secret persuasion techniques to make someone buy.
Just be simple and straightforward:
Will you do business with us?
Do you want to move forward?
The only caveat is that you need confidence in the buyer’s intention to purchase. If you’re mostly sure about the readiness of the prospect, go for it directly.
Write it down
It’s best to obtain a formal contract as soon as you can. If your contract is typical, just print it before the call. If you got special clauses or customized agreements, type them as you close. In the same work, you used during the call. Formal contracts equal more commitment.
Talk about the benefits
Once you show how your solution meets their wants and needs, summit up with listing the different benefits. Print out a list for yourself beforehand. Then just read it:
Our solutions bring X, Z, Y benefits.
Not only is this a great summary for the call, but you also make the other side engage in repeating why purchasing from your business is the right decision. Their reactions give you space to move towards signing the agreement.
Remove the pressure
A normal closing talk such as “Do you need my help?” is perfect for reframing the prospect’s perspective about the relationship between you two.
Helping to word in deal closing shifts the view of yourself from an ego-centric sales individual to a helpful advisor.
If your prospects don’t like pushing, this is the perfect solution. You show you want their business but without the added pressure.
Hold steadfast
This doesn’t mean to outright refuse to negotiate.
Rather, that you try to stay in the same location while you negotiate. Physically. If the client is moving about or standing and sitting, just keep your cool. Changes in body position symbolize the change of the situation. This may suggest to your client that negotiation is worsening or going toward the end.
Let them think
Sometimes, they do need free space to go over the contract. If this is the case, just give ‘em some space. This works wonders when your clients need more research or C-level alignment.
The only problem?
You’ll have to follow up more than once.
Open-Ended Questions
Is your prospect losing focus or interest?
Ask open-ended questions.
This makes them rethink the scenario and engage again.
For instance, when you’re quite along the purchase cycle and want to move the sale forward, ask:
What’s our next step?
Where to now?
It’s not about placing the client in the spotlight. Rather, using questions that move them to the next step or call out hesitation. If they say something negative, address their issues and demonstrate the benefits.
Don’t stop the game
Progress is good.
One of the simplest tactics to close a deal is to simply use the momentum you already have.
Statements like — Are you prepared to move to the next step, I already have the contract — emphasize the formality of the situation and the next obvious step.
When you can connect the buying with the progress, your prospect will be more open to agreeing with it.
Conclusion
Sales velocity is the speed of a sales process. It’s how quickly you can generate more revenue and close deals faster, which will ultimately lead to increased profitability for your company.
You want to do everything possible today that will make this happen in the future for yourself or your clients.
Make sure you stay on top of leads, nurture them through the funnel, and avoid missed opportunities by following these expert tips from our team.
