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Sales Velocity: The Key to Growing Your Business

Published on September 29, 2021
Last modified on February 1, 2023

Are you interested in growing your business?

Then, are you aware of how your sales velocity can affect your business growth?

Sales velocity is a very important metric for any business. As such, it is important for your business to keep a close eye on it.

Closing deals quickly enables you to generate revenue from those transactions as early as possible. If you can hit a higher sales velocity, it’ll give you a more competitive advantage over your competitors.

Let’s take a look at what sales velocity is and why tracking your sales velocity is important.

What Is Sales Velocity?

What Is Sales Velocity l NeoDove

Business success is directly related to how quickly you convert leads into paying customers. The measure that reveals how fast your business is making money is called sales velocity. 

The faster you close deals, the better your sales velocity will be. As a result, your business performance will greatly improve

The Importance of Tracking Sales Velocity

You and your team could be killing it and not even know it. You might be thinking that everything is working just fine, but the numbers may say otherwise. 

Even worse, you might even find out too late that your sales velocity has been steadily decreasing. And, that your business is shrinking.

Your sales velocity can spell the difference between success and failure. It’s not as simple as the number of sales. 

The less time taken for prospects to move through your pipeline, the faster you can close more deals. So, a higher sales velocity means you’re bringing in more revenue in less time. 

By tracking sales velocity over time, you can benchmark your own sales velocity against that of other teams. Moreover, you can compare the efficacy of specific representatives or regions. This allows you to see how changes to the sales process impact your business for good or for bad. 

Furthermore, understanding sales velocity can also help you forecast with more precision. More importantly, you can identify what factors to optimize to increase sales.

4 Key Variables that Impact Sales Velocity

Sales velocity is influenced primarily by four factors. Together, these factors can help you track how sales velocity changes over time. Hence, you can optimize your operations accordingly. 

Those four variables are:

1) Number of Opportunities

It focuses on how many leads your sales team can generate in a given period of time. To compare sales velocity internally, you can also break down opportunities by sales rep, region, or product.

2) Average Deal Size

Many businesses out there consider this simply the value of an average sale they make. A company’s average customer lifetime value is more relevant for SaaS companies or subscription-based products.

3) Win Rate or Conversion Rate

This variable represents the number of leads that convert into paying customers during a given period. 

For example, say you start off with 100 leads. If 40 of them become paying customers, you have a win rate of 40%.

4) Pipeline or Sales Cycle Length

It measures how long it takes for prospects to progress through your sales pipeline. Your sales cycle length determines how long this period will be. 

The complexity of your product and the price will also impact the decision of the prospect. 

 How to Calculate Sales Velocity

The best way to determine your sales velocity is to analyze three main elements. These are your sales pipeline, lead nurturing process, and average sales deal size.

In order to calculate the velocity, the following information is required:

  • The total number of opportunities in your sales pipeline
  • The monetary value of your average sales deal size
  • The customer conversion rate as a percentage of wins vs. losses
  • The average sales cycle in a number of days or months

Sales Velocity Formula l NeoDove


Your sales velocity can be easily calculated. First, multiply the number of opportunities by the dollar/monetary value of your average deal size and win rate. 

After that, divide the result by the number of days in your typical sales cycle.


Let’s say your business has 180 opportunities and has an average win rate of 27%. It has an average deal size of ₹53,000, and a sales cycle that likely lasts 60 days. 

With the formula discussed above, you can calculate sales velocity as follows:

Sales velocity = (180 x .27 x 53,000) / 60

= ₹25,75,800 / 60

= ₹42,930

After calculations using the sales velocity formula, the sales velocity of your business is ₹42,930. This means that your business is roughly bringing in that much revenue each day. 

After knowing this, you can either strive to increase the numerator (in this case, ₹25,75,800). Alternatively, you can try to decrease the denominator (60 days) – or both, if possible.

Sales velocity has real value when it is tracked regularly. Utilize it to compare the short and long-term effects of adjustments in your sales process.

 How to Boost Your Sales Velocity

To increase your sales velocity there are a variety of approaches you could take. 

Some of these include increasing opportunities, converting more leads, and increasing average deal size for your business. In addition to these, you can also decrease the time it takes prospects to move through your sales pipeline.

You can also:

Improve Your Conversion Rate

You will need to find, target, and nurture sales-ready leads if you want to increase conversion rates. Moreover, your lead qualification process will need to be refined and improved.

Take the time to identify leaks in your sales pipeline that need fixing. Find out if conversions are dropping off or stalling at certain steps.

Optimize Your Average Deal Size

Getting high-value deals brings a number of benefits to your business. However, you should bear in mind that bigger sales are typically slower to close. Therefore, improving your sales velocity comes down to balancing high-value and low-value opportunities.

This helps your sales reps manage their time effectively. By using a combination of strategic discounts, tiered offerings, and cross-selling, they can increase deal value.

Shorten Your Sales Cycle

For closing deals more quickly, it is important to break down your sales process step by step. 

Watch out for bottlenecks to speed up your sales process. Examine whether any particular stage is taking too long or slowing down the process. Lastly, consider using automation software to streamline the process. 


Overall, sales velocity is a vital metric that can and will impact your business.  

If you disregard sales velocity and simply focus on keeping a full pipeline, you will have tons of leads. However, you’ll also not have enough resources to manage the pipeline, negotiate high-value deals, or convert prospects into customers. 

As such, optimizing your sales process from start to finish is possible only if you start measuring sales velocity. So, start tracking and managing your business’ sales velocity today and watch your business grow!

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