Assessing the sales pipeline is what gives out an idea to the sales representatives about how much revenue can be generated. And rightly so. Your sales pipeline is the one that lets you know how many deals you have waiting for you in there.
The more deals in the pipeline, the higher the chances of conversion and revenue generation. However, isn’t time a bigger factor that must also be accounted for? This is probably the factor almost everyone tends to miss out on.
How much time each of these deals will take and what would be an average deal size are some of the other essential elements that also need your attention. For perspective, you may need to sweat it out for closing $1 million before the quarter ends which would further enhance your performance for the entire year. Yet, you must be quick to figure out how you shall achieve that. So, time is a crucial element here, undeniably.
Here is what we learn in this post:
- What is Sales Velocity?
- Sales Velocity Equation
- 4 Ways in which You can Enhance your Sales Velocity
- How does Sales Velocity impact your Sales process?
What is Sales Velocity?
Sales Velocity refers to the time you have taken to accomplish and generate revenue. It is the time taken by the leads to move from one station to the other in your sales pipeline and ultimately, contribute to revenue generation.
Sales Velocity Equation
Here’s the simple sales velocity equation that will help you reach the optimum figures you had aimed for.
# = Opportunities
$ = Deal Value
% = Win Rate
L = Sales Cycle Length
The equation aptly presents the estimation of how quickly you shall be able to bring in more money.
The numerator of the equation will give you the amount of revenue you could possibly generate and when you divide this number by the denominator, you shall know how soon will that be possible. A higher sales velocity will indicate a quicker pace of revenue generation.
4 Ways in which You can Enhance your Sales Velocity
Sales Velocity not only gives you better efficiency but also enables you to have a better roadmap towards success. There are people who would desperately pursue a bigger deal in view of making it big in a single shot. While this possibility cannot be ruled out, it is a risky thing. You may or may not make it.
Instead, if you follow a route that has things well planned and the details are chalked out, then there is little scope or failure. In this section, we see the 4 ways in which you can improve your sales velocity swiftly:
Create more sales opportunities
There is nothing wrong with working on too many deals, but be sure to only focus on prospects who are compatible with your product. As far as marketing and sales are concerned, filling the funnel is their responsibility, but what you do with qualified leads is entirely yours.
So, what should you do with qualified leads?
Lead quality is important: Bulging your pipeline with bad leads will only increase your workload down the line. Prioritizing prospects that are likely to turn into revenue begins with defining your qualification criteria.
Prospecting should be realistic: Do not try to achieve unrealistic deals. It would be wiser to look around and gauge the customer behavior and understand what would be the ideal solution for them.
Boost the size of your average deal
It can be difficult to increase the size of your average deal. You may encounter constraints as a result of the intentional choices your company has made. You cannot increase your deal size by charging $200 instead of $80 which is your public pricing.
You may also encounter soft skills challenges, such as establishing relationships with decision-makers. Would cross-selling more goods be possible with your prospects? When it comes to relating price to value, you need to do the following:
Consult like a professional: Your upsell pitches should be transparent and informative, as well as tailored to your prospects' pain points. It is imperative that you portray yourself during the buying process as a trusted advisor, especially when your prospects have hundreds of options to choose from.
Make the most of your time: Smaller deals shouldn't take long to close, so close them quickly. The bigger deals will need a lot of in-depth knowledge and smartness to tackle. You will have more time to work on larger, more complicated deals when you can close your smaller deals in real-time. When you work with big companies, you tend to find that there are more people, processes, and requirements. Therefore, it is critical that you get deeply involved in the business's use case.
Improve Your Conversion Rate
This can be achieved through the following:
Be respectful of your competitors: Rather than just trying to figure out how to make your prospect happy, find out why they choose your competitor's solution. Is it because they solve a particular business problem better? You can then demonstrate to your prospect how your product is superior, not just how it is better than someone else's.
Analyze your sales in depth: It's the initial discovery that results in most deals being lost, not the end of the sales cycle. In your role as the sales representative, it's your job to understand why the prospect wants a new solution. You must find out their pain and determine why they need to solve it as soon as possible. Moreover, you can use a few sales tactics to make your pitch.
Reduce the sales cycle length
As already mentioned, the smaller deals will take smaller time than the bigger ones as the bigger ones will require you to put in more effort and time. To begin with, we determine what segment the prospect belongs to. Then we can tailor our sales process accordingly.
In light of that, here are a few tips to get your time-to-close up:
Let your prospect know more about your product: There’s so much you can do with your blogs, articles, guides, testimonials about your products. You can use all of this information to your advantage and also let the prospects learn about the efficacy of your products. These will help them quickly retrieve pinpointed and precise information pertaining to your product instead of having to wait for a sales rep to turn around and help them out. So developing a content hub is a good step in cutting down the time of your sales cycle.
Offer Free Trials of Your product: Free trials are an effective and quick way for the prospects to take a quick walkthrough of your product’s usefulness. It gives them a hint of how the product works and will help them relieve off their pain points. Also, while they are at it, avoid being pushy or avoid taking updates from them as to how they liked your product. The end of the free trial would be a better time to let them speak and give feedback.
Let your product talk on your behalf and on completion of the trial, let them make a purchase.
Be quick to respond in real-time: A delay in contacting a lead decreases your chance of ever connecting with them. No sooner has the prospect contacted you, than you should be able to present a detailed explanation of your product. This is especially true if the prospect is awaiting your reply on a live chat or is surfing through your website.
How does Sales Velocity impact your Sales process?
Sales velocity can assist you and greatly boost your sales process apart from the following:
- Having estimated your sales velocity right at the start of a quarter will put you in a better position to take things forward.
- It also lets you optimize the available sales opportunities you have.
- Factors like your win rate and sales reporting can be leveraged and so can be the average deal size.
- Having worked through all the other components, the sales rep can also optimize the length of the sales cycle.
As you strive to improve on these four components, you'll become a higher-performing salesperson, quarter after quarter.
How can Deskera Help You?
Having a good Sales Velocity means you are taking lesser time to close the deals. This in turn throws light on how your background work is being done. When you have lesser homework to take care of, you can make a kill and generate great figures on the chart. Deskera CRM and Deskera CRM Plus are tools you need to make that world of a difference from the way you process your sales and orders.
Deskera CRM and CRM+ offer great advantages for business owners, which will ultimately lead to improvements in their income statement, profit and loss statement, and balance sheet, among others.
Using Deskera CRM, you can digitize customer service. You can also utilize this software to plan out your team's work to improve preciseness.
Run through this short video to learn more about Deskera CRM:
Now obtaining clarity on significant aspects of sales like outbound Emails is easy. Learn how to configure them in this video:
Quick rerun of the important points observed in the article:
- Sales Velocity refers to the time you have taken to accomplish and generate revenue. It is the time taken by the leads to move from one station to the other in your sales pipeline and ultimately, contribute to revenue generation.
- A higher sales velocity will indicate a quicker pace of revenue generation.
- Creating more sales opportunities, boosting the size of your average deal, improving conversion rates, and reducing the sales cycle length are the ways in which you can enhance your sales velocity.
- Apart from lifting your confidence, sales velocity can tremendously aid your sales.