Sales Velocity

Just as velocity is the speed at which something moves in a given direction, sales velocity measures how quickly a sales team can move prospects and deals from the discovery phase through to closure. It is a highly valuable metric for any sales team because it enables better revenue forecasting and process evaluations, and gives teams an idea of their productivity.

Sales velocity is calculated using the sales velocity equation, which uses key metrics—(i) number of opportunities, (ii) average deal value, (iii) win rate, and (iv) sales cycle length—to determine how much revenue a sales team can expect to generate over a fixed period.

V = Opportunities x Deal Value x Win Rate / Sales Cycle Length

A high sales velocity figure (V) corresponds to high revenues in a fixed period whereas a low sales velocity figure corresponds to low revenues.