How it's worked out
Sales velocity = (opportunities x average deal size x win rate) / sales cycle length in days.
Use the same period and the same definitions every time. Opportunities are the qualified ones open now. Deal size and win rate come from deals closed, won or lost, over the last few months. Cycle length is the average days from opportunity to close on the deals you won.
Worked example, with made-up figures: 40 opportunities, a $5,000 average deal, a 25% win rate and a 60-day cycle. 40 x $5,000 x 0.25 is $50,000, and $50,000 / 60 is about $833 a day.
- Cut the cycle to 45 days: about $1,111 a day.
- Raise the win rate to 30%: $1,000 a day.
- Add 8 opportunities: $1,000 a day.
That's what the formula is for. It shows which of the four moves the total most for the effort it takes you.
Velocity is built from averages, and averages hide things. One very large deal can lift the average deal size for a whole quarter. If your small and large deals differ a lot, work it out for each separately.
Where it shows up in your week
Each of the four is made of weekly counts. The sales activity metrics guide covers which counts predict revenue, the rates between them, and how to work back from a target to this week's calls. The sales velocity calculator works it out from your own four numbers, and shows what a 10% change to each adds.