Sales Velocity is a vital metric in sales and marketing, including Account-Based Marketing (ABM), that measures the speed at which opportunities move through the sales pipeline from initial contact to closed deal. It is a multi-dimensional metric that assesses the efficiency and effectiveness of an organization’s sales processes. The components of Sales Velocity include:
Sales Velocity is calculated using the formula:
[Sales Velocity = (Number of Opportunities) x (Average Deal Value) x (Win Rate) / (Sales Cycle Length)]
A higher Sales Velocity indicates a more efficient sales operation, as it signifies that deals are progressing quickly and generating revenue at an accelerated rate. Conversely, a lower Sales Velocity may indicate bottlenecks or inefficiencies in the sales process.
In ABM, Sales Velocity is a crucial metric for assessing the effectiveness of targeted engagement efforts with high-value accounts. It helps organizations understand how quickly they can turn their ABM strategies into revenue and guides them in making improvements to optimize the speed and efficiency of their sales processes.