Focus on Sales Velocity and Solve the 'Danger Points' in Your Sales Process
The sales process is one of infinite variables. You can use sales velocity to organize your efforts to improve overall performance.
By Nick Bennett
There’s wisdom in zooming out.
Sales reps — and even sales managers — can sometimes be so close to their organization’s sales process that they can miss the big picture. They don’t see the forest for the trees, so to speak.
But this can be a costly mistake.
It’s only when we zoom out and look at aggregate data that we can start to understand the flaws of our own sales process. The types of problems you miss when you look at individual salespeople and prospects.
Below, I’ll walk you through how we’ve used data to scrutinize our sales process, identify “danger ponts,” and improve our sales velocity, and how you can do the same.
Improving your sales process: Data prerequisites
Before we dive in, a bit of caution: You are only as good as your data.
To really undertake this process, you need to know that your team is using your CRM (or customer relationship management software) properly. This means moving deals from stage to stage, and logging meeting notes after each call. It means that all sales reps have their email accounts linked to the CRM so anyone can see their correspondence with prospects.
Incomplete data gives you an incomplete picture of what’s happening in your sales process — which leads to bad decisions.
Before you try in earnest to improve your sales process, double check your data.
Then, when you’re ready, start with Step one.
Step 1: Sort leads into two categories: Inbound and outbound
The first step of a sales process audit is organizing your data. There are a number of ways to do this. For us, it made the most sense to split it into two categories: inbound and outbound. In other words, did the leads come to us to book a meeting (inbound), or did we reach out and prospect them (outbound)?
If someone reaches out and books a meeting with us, we know they’re likely a pretty warm lead that has a good chance of closing.
- They came to us, not the other way around. Because they raised their hand, they tended to be more sincerely interested in what we sell.
- They likely know a good deal about who we are and what we do. This means there’s less need for education later on, which improves our chances to close.
- They’re giving up their time to meet with us. While there are plenty of professional time wasters out there, in general this is a sign of seriousness.
Now, this doesn’t mean we close everyone who comes to us.
There are plenty of inbound prospects who end up being bad fits and going nowhere. And, because we’re in the B2B space, sometimes we end up speaking with people who aren’t decision-makers, which slows things down. But our close rates are higher with inbound prospects than with our other category, which we’ll cover next.
For our definition, “outbound prospects” are anyone that our sales team reaches out to. But they’re not names on a list we bought somewhere. These could be website visitors, conference attendees, or ABM (account-based marketing) prospects.
In general, these ops are harder to close and the sales process takes longer, for all of the obvious reasons.
Because of this, we wanted to keep this data separate so that it didn’t skew our insights.
Overall inbound and outbound prospects were different enough that we could only really analyze them when they were separate. This split allowed us to draw more meaningful conclusions from the data.
Step 2: Focus on sales velocity
With our data organized, we could move on to step two: putting numbers in context.
The best measurement of sales process efficiency is sales velocity. A lot of businesses track sales velocity — but many don’t. So, let’s break down what it is and what it tells us.
What is sales velocity?
Also called “pipeline velocity,” sales velocity is a measurement of how quickly buyers (and money) move through your sales process.
To calculate it, use four metrics you’re probably already tracking:
- Number of ops in your pipeline (currently, or during a given period of time)
- Average deal size (in dollars)
- Win rate (in percentage)
- Average time to close (in days)
To calculate, multiply the first three numbers and divide it by the fourth.
In other words:
You can figure out your sales velocity as a whole or separated by different products, categories, or other criteria. For instance, in our case we kept our sales velocity for inbound leads and outbound leads independent of each other.
Here’s the spreadsheet we use to track both sales velocity and customer acquisition costs (CAC). It will run the basic calculations for you. I’ve left some fake numbers in there. Copy it and make it yours.
What does sales velocity tell you?
Sales velocity is a measurement of how quickly money moves through your sales pipeline.
For example, if you have 50 ops in your pipeline, an average deal size of $1,000, a close rate of 20%, and an average time to close of 12 days, you’ve got a sales velocity of $833.
This means you’re bringing in around $833 per day.
How do you make your sales velocity go up?
By distilling the sales process down into four metrics — four numbers in a formula — you reduce the number of variables you can manipulate.
This is a good thing.
Sales is a fickle enterprise. Trying to track down every nuance and microdecision that made someone decide not to buy is an exercise in futility.
Instead, sales velocity gives you four levers to pull:
- You can increase your number of ops.
- You can increase your close rate.
- You can shorten your sales cycle.
- You can increase your average deal size.
While there are dozens of ways to do any one of these, it’s still a more orderly and trackable process than it would be to just haphazardly try to improve your entire sales process.
Step 3: Identify the ‘danger points’ of the sales process
Sales velocity is like a shorthand pulse check of our sales process. Each quarter, it gives us a sense of how things are trending and how healthy our pipeline is. (We track other numbers, too.)
With a multi-stage sales process like ours, every step is a place where prospects can fall off, or a danger point. They choose not to move ahead, they go with a competitor instead of us.
Let’s say 100 leads enter our sales process by booking a call with our team.
Maybe 90 show up to the discovery call meetings.
Of those, maybe 50 move on to meet their coach and learn more about the program.
Of the 50 who met the coaches, about 20 will close and become customers.
100 ops become 20 sales.
Each one of these steps is a touchpoint and an opportunity, but also a danger point.
If you can improve any one of these numbers, the results for your business would be immense.
How can you improve at each stage? How can you have one or two more people move on in any given step in the sales process?
This will look different for every business, but a few things you can try:
- Watch sales calls to identify the questions, worries, and concerns your buyers are facing.
Think: How can we address these more effectively?
- Read through emails in your CRM to evaluate communication practices.
Think: How can we communicate better?
- Talk to customers and see what made them move forward.
Think: What factors led them to buy?
- Talk to people who didn’t buy from you to learn why they chose another option.
Think: Did they choose a competitor or did they choose not to buy at all? How can we solve for both?
- Evaluate sales enablement materials — everything from “book a meeting” page copy to buyer’s guides, research reports, and more. Use data to see what customers are engaging with.
Think: Do the words and videos convey that we can solve the buyer’s challenges?
As you gather data, start to think about the next step — testing and improving your sales velocity. Remember, a small improvement can have big consequences for your organization.
Step 4: Test and improve sales velocity
There are a million details in any sales process. It’s an endlessly complex equation that always comes down to one of two answers: Yes or no.
As a sales leader, it’s easy to get lost in the infinite playground of variables. Instead of getting paralyzed by complexity, use the data you collect to make calculated, measurable choices.
- Want to increase your number of ops? This is likely a marketing initiative that involves audience research and market analysis. It is the job of your marketing team to create and capture demand for your solution. In other words, make the problems you solve highly visible for those who experience them so they see you as the solution. This means better content that’s distributed to the places your buyers spend time.
- Want to increase your close rate? Meet your prospects where they are and adapt the sales process to them. Listen to their problems and build trust so you can prompt self-discovery. At the same time, be sure you’re keeping bad-fit prospects from entering the sales process in the first place.
- Want to shorten your sales cycle? Work with your marketing team to create trustworthy sales enablement materials you can use with your customers. Instead of spending time in every call answering the same questions, send an article or a video ahead of time to get those questions out of the way. Then, you’ll have more productive sales conversations that are tailored to the needs of each buyer.
- Want to increase your average deal size? Are there ways to bundle what you sell? Are there natural upselling opportunities that would serve your customers? Are your prices in line with industry standards, or is it time to raise them?
Your needs will be unique, so start testing and see what you learn.
Improve your sales process, grow your business
Sales is the lifeblood of your organization. Without a steady influx of revenue, you can’t make payroll and pay overhead — let alone invest in research and development and other costly pursuits.
To keep your sales process humming along, always think of it on both the aggregate and the individual levels.
On the wide-lens, zoomed-out scale, use the tips above to pull the right levers and improve your velocity.
But you can’t ignore the coaching and mentorship that individual sales reps need to be the best they can be. The greatest sales process in the world is only as good as the sales pros who implement it. Teaching your team to listen well, build trust, and truly serve their buyers is the critical countermeasure to sales process improvement.
When you’ve got both, your business is ready to take off.
Wondering where to begin?