Key takeaways
- Sales velocity combines opportunities, deal value, win rate and cycle length.
- Improving any one input raises velocity, so pick the easiest lever first.
- Compare velocity within one segment over time, not across different markets.
What is the sales velocity formula
The sales velocity formula is the number of opportunities, times the average deal value, times the win rate, divided by the length of the sales cycle. Write the win rate as a fraction, so one deal won in four is 0.25.
- Opportunities: qualified deals open in the period you are measuring.
- Average deal value: what a won deal is typically worth.
- Win rate: the share of closed deals that you won.
- Sales cycle: the average number of days from opportunity to close.
What is an example of a sales velocity calculation
An example of a sales velocity calculation uses an invented team with 40 open opportunities, an average deal value of £12,000, a win rate of one in four and a sales cycle of 60 days. Multiply 40 by £12,000 to get £480,000, multiply by 0.25 to get £120,000, then divide by 60 days.
The team's sales velocity is £2,000 a day. If it shortens the cycle to 50 days with everything else unchanged, velocity rises to £2,400 a day without a single extra opportunity.
How do you increase sales velocity
You increase sales velocity by improving one of its four inputs without hurting the others. More opportunities help only if they are as well qualified as the rest, and bigger deals help only if they do not stretch the cycle too far.
- More opportunities: tighten targeting so outreach reaches buyers who fit.
- Larger deals: sell to the full need, such as more teams or a longer term.
- Higher win rate: qualify harder early and drop poor fits sooner.
- Shorter cycle: involve the person who signs and start contract review early.
What are the limits of sales velocity
Sales velocity is an average, so it hides differences between deal types. A team selling both small and large deals should calculate velocity for each, because one blended figure describes neither.
It also depends on clean data. If close dates are guesses and lost deals stay open, the win rate and cycle length are wrong, and so is the velocity.
Where Pebbles Ai fits
Common questions
What is a good sales velocity?
There is no universal figure, because it depends on deal size and market. A good velocity is one that rises over time for the same segment and covers your revenue target.
How often should you calculate sales velocity?
Monthly or quarterly is common. Use a period long enough to include a meaningful number of closed deals, or the win rate will swing on a handful of results.
Is sales velocity the same as sales cycle length?
No. Cycle length is one input to sales velocity. Velocity also accounts for how many deals you work, how big they are and how many you win.
About this page. Written by the Pebbles Ai team for people who run sales, marketing and growth. Last updated .
