SaaS Talk™ with the Metrics Brothers - Strategies, Insights, & Metrics for B2B SaaS Executive Leaders
Sales Velocity
Feb 19, 2025
Sales Velocity is a game-changing metric that reveals how much new business a sales team can generate daily. The hosts break down its calculation and explore its role in measuring sales capacity, effectiveness, and efficiency. They discuss various strategies to boost Sales Velocity and the importance of focusing on key variables like win rates and average contract values. Practical insights are shared on optimizing sales performance without distorting data, making this a must-listen for sales leaders eager to enhance their strategies.
24:17
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Quick takeaways
- Sales Velocity, calculated through specific inputs, is crucial for understanding a sales team's capacity to generate daily bookings.
- Balancing effectiveness and efficiency metrics is essential for sales leaders to improve overall performance and make informed decisions.
Deep dives
Understanding Sales Velocity
Sales velocity is calculated by the formula that multiplies the number of opportunities, the average contract value, and the win rate, then divides this product by the average sales cycle. This formula helps determine the daily bookings a company can generate based on these variables. An important detail is the time frame used for the sales cycle, which can affect whether the calculation reflects business days or calendar days. The metric serves as a key indicator of sales performance, helping organizations understand how efficiently they can convert opportunities into revenue.
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