No matter the size of your business, increasing sales revenue is always a priority. For B2B products and services, revenue growth can be particularly challenging due to traditionally long sales cycles, which can significantly impact an organization's financial health.
In fact, in 2023, nearly half of B2B sales leaders reported longer sales cycles, a trend that contributed to 91% of sales teams in the US and UK missing their quotas in the first quarter of the year. This highlights the importance of not just closing deals but doing so more efficiently.
To tackle these challenges, B2B sales leaders rely on key metrics like sales velocity, which measures how quickly deals move through your pipeline. Sales velocity is directly tied to time to close. By optimizing sales velocity, you can identify and eliminate bottlenecks in your sales process—and speed up your entire sales cycle.
Here are eight actionable ways to accelerate sales velocity and improve your time to close.
What is Sales Velocity and How to Calculate It
Sales velocity, sometimes called pipeline velocity, is a metric that indicates how quickly your leads progress through your sales funnel. Sales velocity measures the rate at which sales cycles come to completion based on four key metrics: number of opportunities, average deal size/value, win/close rate percentage, and the average length of your sales cycle.
The Number of Opportunities in Your Pipeline
The first variable in the sales velocity calculation is the number of valid sales opportunities you have in your pipeline at the time of measurement.
Your sales pipeline should always be filled with high-quality, sales-qualified leads (SQLs). A pipeline cluttered with low-quality leads that are unlikely to convert can negatively impact your revenue.
One effective way to ensure you’re filling your pipeline with the right opportunities is through thorough discovery calls. These initial conversations help qualify leads by uncovering their specific needs and challenges, ensuring that only those with genuine potential move forward in the sales process.
Average Deal Size / Value (or CLV)
The average deal size or value is the average sum of revenues you have generated from new clients over a period prior to the time of measurement.
To calculate your average deal value, divide the sum of your generated revenue by the number of deals closed over a specific period. For example, if your sales efforts in a quarter resulted in revenues valued at $100,000 via 50 deals closed, then your average deal value would be $2,000. ($100,000/50 = $2,000).
For subscription-based products and services (like SaaS), you can use the average customer lifetime value (CLV) instead of the average deal value variable when calculating your sales velocity.
Since CLV accounts for long-term and recurring revenues to your business, it can be a better indication of the total contribution of every closed deal to the revenues of a subscription-based product or service throughout the ongoing relationship with the customer.
Win Rate Percentage
Your average win rate or conversion rate is a measurement of your sales teams' ability to successfully convert SQLs into paying customers. To calculate your average win rate, simply divide the total amount of deals won by the total amount of opportunities.
Next, calculate your win rate percentage with this formula:
The Average Length of Your Sales Cycle
The last variable in the sales velocity formula is the one you never want to see grow. Also called pipeline length, the average length of your sales cycle is a measurement of the time taken to convert a qualified lead into a paying customer. This variable must account for the entirety of the prospect journey and, with B2B sales, can take months to complete.
To calculate your average sales cycle length, sum up the number of days it took to close each sale in the period measured. Then, divide that sum by the number of closed deals in that same period.
The formula for calculating sales cycle length is:
It's worth noting that most of these numbers should be available in your CRM platform.
How is Sales Velocity Calculated?
To calculate your sales velocity, multiply the number of opportunities by the average deal value and win rate, then divide the result by the average length of your sales cycle. [It's worth noting that most of these numbers should be available in your CRM platform.
Now that we’ve got all the sales velocity math sorted, let’s pivot to eight actionable strategies to increase it.
8 Ways to Improve Sales Velocity and Accelerate Time to Close
Sales velocity is a lot more than just a metric to quantify the rate at which your sales efforts bear fruit. It is also a strategic tool for finding the bottlenecks and issues that slow your sales cycle. This means tweaking and optimizing each of the variables in the equation, with the sorest spot for B2B sales cycles—the cycle length—as the focal point.
1. Optimize Lead Qualification
The quality of the leads in your pipeline is often reflected in your sales velocity rates. This is especially true when the number of opportunities is high and the win rate exceptionally low. To remedy this, review and revamp your lead qualification processes and declutter your sales pipeline.
Strategies and tactics to improve the quality of the opportunities in your pipeline include:
- Employ algorithmic or AI-enhanced lead scoring techniques to rank leads based on behaviors that indicate intent.
- Review and optimize your target audience and buyer persona definitions. Make sure your value proposition and messages are relevant to their needs and pains.
- Implement lead nurturing (and leverage automation to do so effectively) to keep warm prospects engaged with your sales process.
- Focus your lead generation efforts on sources proven to deliver high-quality and high-value leads.
2. Enhance Sales Training and Enablement
To successfully close deals and turn prospects into happy customers, your sales teams need the skills, tools, and in-depth understanding of your product and the buyer. Here's how to do it:
- Start by getting feedback from your reps to understand their needs and knowledge gaps. Next, you can apply one or more of the following:
- Create a proactive coaching plan to enhance and improve the performance of your teams, rather than a responsive plan that provides training and tools only when performance drops.
- Measure sales reps' individual and group performance in a repeatable and scalable process with pre-set KPIs.
- Collaborate with marketing and development teams to provide your sales team with a comprehensive but accessible sales knowledge base with FAQs, brochures, and other sales material and resources consolidated in one place.
- With SaaS products, you can use demo platforms like Demostack to let your sales team 'play' with a realistic demo of your product to understand it better and explain its value.
- Equip your teams with sales enablement tools that automate tasks and let reps focus on what they do best—move deals toward closing.
3. Implement Effective CRM Strategies
Your CRM is the primary tool your sales reps use throughout their sales cycles. Most modern CRM tools offer many features and capabilities aimed at accelerating sales cycles and uncovering bottlenecks in your pipeline. Take advantage of them by:
- Organizing, maintaining, and enriching the lead data in your CRM systems to pinpoint high-value opportunities.
- Aiming for collaboration with a CRM implementation that promotes communication and information sharing between teams and team members.
- Connecting your CRM to your sales enablement tools to enrich prospect data and centralize sales and marketing activities in one platform.
4. Leverage Sales Automation Tools
Sales automation tools encompass a wide range of software solutions designed to streamline and optimize your sales process by eliminating the time your salespeople spend on repetitive, mundane tasks.
Implementing sales automation makes tasks like lead nurturing, scheduling, and responding to prospects become faster and more efficient. For example, you can use demo automation to instantly create and deliver personalized, interactive product demonstrations tailored to each prospect's needs. This not only enhances the quality of your sales interactions but also significantly reduces the time your team spends preparing demos, allowing them to focus on closing deals.
5. Improve Sales and Marketing Alignment
The role of marketing is to make sales a breeze and reduce the role of sales teams in the process to a negotiation and customization dialogue. With that in mind, it's vital that you continuously align sales and marketing operations, and invest in improving communication and collaboration between the teams.
- Collaboratively determine the best sources and characteristics for high-quality leads and, if needed, revisit your buyer persona definitions and targeting.
- Develop materials and resources according to sales representatives' requirements and feedback across the stages of the sales cycle, ensuring they can instantly access relevant information when they need it.
6. Personalize Sales Presentations and Demos
Customization and personalization in B2B sales cycles have become an expected part of the process. Your prospects don't want to flip through lengthy solution pages or slide decks to understand how a specific feature in your SaaS solution provides value to their business.
Instead, try using personalized demos—a proven tool for increasing sales velocity.
With Demostack's ability to quickly create and share personalized demos, you can deliver a demo experience that directly resonates with your prospect's pain points and needs.
7.Optimize Follow-Up Processes
Up to 80% of all sales require at least five follow up touchpoints to close a deal. At the same time, just under half of all sales reps give up after only one follow up attempt—leaving money on the proverbial table. The best way to look at follow up processes is as relationship nurturing.
To follow up more effectively:
- Set concrete timelines for automatic and manual follow-up activities.
- Log all follow-ups and attempts in your CRM, along with relevant contact notes.
- Create templates for common scenarios in follow-up processes like quote requests, certifications, and other deliverables that are appropriate to your industry.
8. Leverage Data-Driven Insights
Finally, it's essential to have comprehensive, data-driven visibility into your sales pipeline. This entails setting and monitoring critical metrics and then applying data analytics to pinpoint the bottlenecks in your pipeline.
In addition to sales velocity, you should monitor and analyze metrics like step-based conversion rates, win/rate losses by campaign, and any other KPIs that are relevant to your business.
Reduce Your Time to Close with Demostack
Sales velocity is a crucial metric in B2B sales, demanding continuous attention and optimization. By focusing on improving this metric and leveraging effective sales enablement tools, you can benchmark performance, forecast future revenue, and, most importantly, reduce Time to Close. As a result, deals move through your pipeline faster, accelerating growth and improving overall efficiency.
Hands-on product demonstrations are often crucial to shortening lengthy sales cycles, reducing time-to-close, and accelerating sales velocity. With Demostack, your sales reps don't need to wait for engineering to make a demo environment available. Instead, you can use automation to create interactive, customized, and data-driven demonstrations of your SaaS products and their features.
Contact Demostack to discover just how easy it is to deliver no-code, on-demand demos for your sales teams.
