Unless you’re crawling the web as a small company executive, trying to teach yourself sales science, you likely aren’t super intimate with your sales velocity. You may have even entrusted your sales leader to know what’s going on. They might. But, their role in addition to hitting the number, is to present the most rosy-colored picture of the sales opportunities they can. How many of you have heard some version of the following in an internal review meeting?
The reality is that the two extremely direct questions you should be asking are “How much are we getting committed per day on average” and “does the forward looking pipeline tell that same story, or a different one?” Enter: sales velocity. I’ll credit G2 with this image, as they are universally understood and trusted - but there’s 1,000 different resources on the web which give their opinions on the matter. I’m here to break down some of the succinct insights around this for you. Definitions and Traps:
Velocity = I like to think of this as the average daily bookings rate your current pipeline is running at. Bookings become realizations, which become profit, which becomes cash. I can’t think of a more direct line towards success. # Opps = This is defined as the number of opportunities you have in the sales pipeline. I like to put a few criteria around this. How many are in the “proposal or better” stage? Don’t measure anything with a pulse. Also, don’t measure anything more than twice the average sales length that you couldn’t run though what I call “Honesty Friday” with your team $ Deal Value = This is defined by the average size deal, or ACV in your pipeline. What are we looking at, on average? % Win Rate = This one can be tricky. Focus not on wins versus losses, but wins divided by all total opportunities created in a given period. L Length of Sales Cycle = This is as clean as your team’s litter box. If they are sandbagging opportunity creation, slow rolling deals in, creating only deals with high probabilities to close What You Need to Know: In reality, you can pull any of these levers to impact your forward looking forecast, with knocking on more doors as the easiest to command and control. In reality, a savvy team looking to address a forecast knows how to drive the balance between all of the factors. #: Identifying strategies to direct team members towards responsible volume increases (not piling 1,000s of dead leads into outreach or HVS or my new favorite, Saleswhale) $ Value: Working with your team to segment ideal customer profiles and target higher value deals can have a fast and material impact on your forecast % Wins: This is all in coaching and development - sometimes with the coaching and development being to work with your sales leader to know when (and when not) to upgrade the team in general L Length: A huge driver to forecast recovery or scale can be working to control the deal process with customers. While they have their own timetable, effective question asking and mutual congruence can shave an average of 5-10 days off deals, on average. Don't Try It Alone: Looking for a health check on your pipeline, without your sales manager’s nightly news spin? Contact me, and I’ll let you know the data we need to take a fresh look at things. Comments are closed.
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