Sales velocity explained: The what, the why, and the how

Things move quickly in sales, and as the saying goes: time is money. We all want the ball to roll faster so that we can close more deals in less time. This is why getting to grips with sales velocity — the speed at which you move prospects through your sales process and drive revenue — is so important. 

In this article, we’re breaking down exactly what sales velocity is and why mastering this one key metric could be the game-changer your revenue team needs. We’ll show you how to calculate it, where your bottlenecks might be hiding, and — most importantly — how to boost your sales velocity to fuel some serious growth.

Let’s set the scene: Why everyone’s talking about sales velocity

Sales cycles are getting longer. 

According to a survey by RevOps, 49% of SaaS companies have seen the length of their sales cycles increase. Of those, 52% saw them increase by 10%, and 6.3% saw their cycles stretch by 30% or more. This is also supported by research from RAIN group, which shows that 43% of sales enablement leaders have reported that their sales cycle has increased.

When sales cycles drag on in this way, businesses face several challenges:

1. Stalled revenue growth
   Extended sales cycles slow down revenue generation. Instead of quickly turning leads into paying customers, your company waits longer to receive payment, slowing down overall business growth. In industries like SaaS, where recurring revenue is key, delays can lead to significant losses over time.
   
   
2. Increased cost of sales
   The longer it takes to close a deal, the more resources your team is using up. Reps spend extra time nurturing leads, taking more meetings, and conducting additional follow-ups. All of this can really drive up the cost of acquiring a customer.
   
   
3. More lost deals
   Lengthy sales cycles lead to a loss of momentum, which can cause prospects to lose interest. Buyers expect a seamless, fast experience across multiple touchpoints, and 65% are likely to switch suppliers if they encounter any roadblocks during their purchase journey​.
   
   
4. Declining customer satisfaction
   Prolonged sales interactions can frustrate buyers, ultimately reducing satisfaction and retention rates. Studies show that slow and complex sales processes can cause dissatisfaction, with delayed customer onboarding negatively impacting overall customer experience. This makes it harder to build and maintain long-term relationships​.

In short, longer sales cycles mean higher costs, slower growth, and greater risks of losing business to competitors — critical issues that demand attention from any sales-driven organization.

Why are sales cycles getting longer?

As sales cycles continue to stretch, it's important to understand what's driving this shift. Several factors are contributing to longer sales processes, from changes in buyer behavior to increased internal complexity. Here's a breakdown of a few leading reasons:

Increased solution complexity

As technology and business solutions become more advanced, the products and services on offer are often more complex. Whether it's software, specialized equipment, or consulting services, modern solutions require a deeper understanding and more detailed discussions between vendors and buyers. This leads to extended discovery, customization, and implementation conversations, which naturally elongate the sales cycle. 

Buying committees are growing

One of the primary reasons for longer sales cycles is the increasing size of buying committees. Companies are involving more stakeholders in purchasing decisions than ever before, especially from different departments like finance, IT, and operations. With more people involved, the decision-making process becomes slower and more complex as each stakeholder may have different priorities or concerns that need to be addressed.

More rigorous evaluation processes

Buyers today spend more time researching products, comparing alternatives, and seeking third-party reviews before making a decision. They’re more cautious and methodical in their approach. This results in a longer evaluation phase, where prospects take extra time to vet solutions and ensure they’re making the best choice. This trend is compounded by the fact that businesses often face higher stakes with large purchases, making them more risk-averse and extending the sales cycle even more. 

There’s a growing shift towards consensus-based decision making

Many organizations are moving toward a more consensus-driven approach to buying, where final decisions need to align with multiple departments. This often means lengthier internal discussions and additional rounds of approval, particularly for big-ticket purchases. As each department has its own priorities, reaching consensus can take time, further delaying the sales process​.

How to calculate sales velocity

Now that we know what sales velocity is, how do you calculate yours?

The sales velocity formula is straightforward and involves four key components: 

1. The number of opportunities
2. Your average deal value
3. Your win rate
4. Your sales cycle length

Here’s a step-by-step guide to calculating your sales velocity. This formula will give you a monetary amount that reflects your sales velocity, helping you gauge how efficiently your sales team is performing and where improvements can be made.

1. To begin, count the number of qualified opportunities in your sales pipeline over a specific period.
2. Next, determine the average deal value by dividing the total revenue generated from closed deals by the number of deals closed.
3. Then, calculate your win rate by dividing the number of won deals by the total number of opportunities. Write this as a percentage.
4. Finally, measure the sales cycle length by calculating the average time it takes to close a deal, typically in days.

Now you’re ready to put all of these figures into the sales velocity formula.

How to increase sales velocity

To increase sales velocity, your revenue team needs to focus on strategies that speed up the sales process without sacrificing quality. Here are a few key ways to make that happen:

1. Ruthless lead qualification
   
   Not all leads are created equal. By focusing on high-quality prospects, you can reduce the time wasted on leads that are unlikely to convert. Use data-driven tools like CRM systems or lead scoring software to prioritize leads that show a strong intent to buy. This helps your sales team spend more time on leads that are more likely to close, speeding up the overall sales process.
   
   
2. Find ways to shorten your sales cycle
   
   One of the biggest factors in sales velocity is how long it takes to close a deal. To shorten this time, streamline your processes. Focus on reducing unnecessary steps, automating tasks where possible, and giving your team the tools they need to close deals faster. For example, using pre-approved proposal templates or e-signature software can cut down on back-and-forth during negotiations and contract finalization.
   
   
3. Increase your win rate
   
   Improving win rates means closing more deals with the leads you already have. This can be achieved by refining your sales pitch, providing better product education to your prospects, or offering customized solutions that directly address their pain points. Regular training sessions and performance feedback for your sales team can also boost their ability to close deals. Easier said than done, we know.
   
   
4. Boost sales productivity
   
   Help your team be more productive by giving them the right tools and training. CRM systems, email automation, and AI-driven insights will allow your reps to focus more on selling and less on administrative tasks. Streamlining communications and simplifying internal processes allows your team to move faster, close deals quicker, and ultimately increase sales velocity.
   
   
5. Focus on deal size
   
   Larger deals can significantly boost sales velocity without requiring more leads. By offering upsell opportunities, bundling products, or encouraging larger contracts, revenue teams can close fewer deals but still drive significant revenue. Focusing on improving average deal size is a smart way to accelerate revenue growth.

The wrap up

Sales velocity is more than just a buzzword — it’s a critical metric for revenue teams looking to grow faster and more efficiently.

By understanding and tracking sales velocity, you and your team can gain valuable insights into how your sales process is performing and identify areas for improvement.

Whether it’s qualifying better leads, shortening the sales cycle, or improving win rates, boosting sales velocity can lead to faster revenue generation and a more streamlined sales process.