Sales Velocity Explained: The Metric Most Teams Don’t Track
For sales leaders drowning in a sea of metrics like MQLs, SQLs, and activity counts, this article offers a lifeline. Sales Velocity is the single, holistic metric that measures the speed at which your team is generating revenue. We provide the formula and explain how it gives you four distinct levers to pull—Opportunities, Deal Size, Win Rate, and Sales Cycle Length—to build a truly predictable growth engine.
A dashboard UI element that looks like a speedometer, with the needle pointing to a specific '$ per day' 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. That's why we often argue that more leads is rarely the answer.
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. As we've explored, deal velocity often matters more than deal size. This could involve creating a Mutual Action Plan with prospects or improving your contract negotiation process.
The Takeaway: Use Sales Velocity to Make Data-Driven Decisions
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.