Sales Velocity

Definition of Sales Velocity

The speed at which sales opportunities move through the sales pipeline and generate revenue.

Explanation of Sales Velocity

Sales velocity is a metric that measures the speed at which deals move through the sales pipeline and generate revenue. It is calculated by multiplying the number of qualified opportunities, average deal size, and win rate, then dividing by the length of the sales cycle. For example, if a company has 50 qualified opportunities, an average deal size of $10,000, a win rate of 20%, and a sales cycle of 30 days, its sales velocity would be $33,333 per day. Sales velocity provides insights into the efficiency and effectiveness of the sales process. Higher sales velocity indicates that the sales team is closing deals quickly and generating revenue faster. By tracking and optimizing sales velocity, businesses can improve their sales performance, forecast revenue more accurately, and identify areas for improvement in their sales process. This metric is essential for understanding how well the sales team is converting opportunities into revenue and driving business growth.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.