Sales Velocity Explained: The Metric Most Teams Don’t Track
Most sales leaders are drowning in metrics: MQLs, SQLs, activities, close rates. But these are all isolated pieces of a larger puzzle. Sales Velocity is the single, holistic metric that measures the speed at which your team is generating revenue. Understanding and optimizing it is the key to building a predictable, scalable growth engine.
A speedometer-style dashboard showing the four components of sales velocity.
The Sales Velocity Formula
Sales Velocity is calculated with four key inputs:
(Number of Opportunities x Average Deal Size x Win Rate) / Sales Cycle Length = Sales Velocity
The result is a dollar amount per day (or month), representing how much revenue your pipeline is generating over time. It is the speedometer for your sales team.
The Four Levers of Growth
The power of the sales velocity formula is that it gives you four distinct levers you can pull to increase your revenue. Instead of just shouting "sell more!", you can take a strategic approach.
1. Increase the Number of Opportunities
This is the most common lever teams pull. It involves increasing top-of-funnel activity, whether through marketing, outbound, or partnerships. It is a valid lever, but often the most expensive and least efficient if the rest of your funnel is leaky.
2. Increase Your Average Deal Size
Can you upsell or cross-sell more effectively? Are you discounting too heavily? Can you move upmarket to larger customers? Increasing your average deal size by just 10% can have a massive impact on your overall velocity.
3. Improve Your Win Rate
This is about conversion. Better qualification, improved demo skills, stronger objection handling, and a more disciplined follow-up process can all increase the percentage of opportunities that turn into closed-won deals.
4. Decrease Your Sales Cycle Length
How can you remove friction and delays from your sales process? A faster sales cycle means you realize revenue sooner and your reps can handle more deals per quarter. This could involve creating a Mutual Action Plan with prospects or improving your contract negotiation process.
How to Use Sales Velocity
Track your Sales Velocity month over month. When it goes up, you know your strategic initiatives are working. When it goes down, you can use the four levers to diagnose the problem. Is your win rate dropping? Is your deal size shrinking? The formula gives you a framework for making data-driven decisions instead of gut-feel ones. It turns the art of sales into a science.