Sales velocity (or speed of sales)  

Sales Revenue Management

It's the numbers game in sales. Revenue management is analyzing the targets v/s actuals.


Sales velocity (or speed of sales)


Typically the sales force productivity has a direct relationship with the sales velocity. However, it is technically possible to have a low sales velocity, but still having high sales productivity. This is because some product or market conditions inherently extend the time it takes to close a sale.

Typically the sales productivity has a direct relationship with the sales velocity. However, it is technically possible to have a low sales velocity, but still having high sales productivity. This is because some product OR market conditions inherently extend the time it takes to close a sale. A good example of this is life insurance products, whereby a person takes his own time to take a decision on a product, which involves the welfare of his family and his retirement life.

Sales velocity (or sales speed) is an important indicator on the health of your sales capabilities. A higher sales velocity (assuming other factors as constant), helps in the following manner:

  • Interest of a prospect OR a lead is a highly perishable material.
  • Making the best use of seasonality OR sales campaign.
  • Faster return on sales expenses.
  • More predictability of sales.

One of the typical phenomenon, which is linked to the sales velocity is the month-end OR period-end peak of sales numbers. Companies have struggled to smoothen out the month-end/period-end peak syndrome, which places undue pressure on the sales infrastructure. A sales person let the sales leads drag for initial part of a sales period (say a month) and wake-up around the last week of the month and do a rush job of converting the leads. This results in a lower average velocity though the sales productivity for the month may still show out to be positive.

Following are the success drivers for improving the sales velocity:

Effective leads tracking and follow-up

With performance reporting, alerts and escalations one can maintain pressure on the owners of a given lead/group of leads to ensure a faster closure.

Sales collateral and material.

Sales collateral and material is expected to support the sales effort and help/push a customer to make a faster and favorable decision. Collatoral and material, which can attract a customer and also provides the answers which a customer is seeking, will help close a sale faster.

Quotation management and decisioning on deals

If you are quick to generate a quotation along with the commitment towards the delivery timelines, you can get a faster response. A high proportion of buying decisions are at the spur of the moment OR in a state of urgency. If you are able to leverage that 'moment of need', you can increase your velocity. This also includes the ability for faster decision within the sales hierarchy, for any special deals OR for discounts to the customers.

Product information

A sales person should be having a good understanding of the products and comparison across the products to understand the customer needs and offer a product, which can satisfy the customer. Alternatively, he should be having a ready help available in case he does not know the answer.

Operations support

Operations support in terms of delivery of product, where the sales closure is not linked to the placing of purchase order. The sales closure in this case is effected by simple delivering the product OR usage of the product. For example- life insurance policy, where a customer can cancel a policy before it is issued OR for a credit card, where a customer can send back the card without using it. Overall a good and timely delivery helps in getting more references and for repeat purchase.

Customer Touch

Even if it takes time for a customer to take a decision, maintain touch with the customer in terms, as the memory span is short for a first time purchase by a customer. This is that traditional sales push for the customer to take a decision fast.

Measures linked to the speed of sales

  • Sales numbers
  • Sales units
  • Number of days/periods taken for sale

Metrics linked to the sales speed

  • Average turnaround time for end-to-end sales initiation to sales
  • Average turnaround time for interim steps within sales follow-up and closure.
  • % of units sold within the given sale turnaround standard
  • % of sales value sold within the given sale turnaround standard.

Dimensions/attributes on which you can analyze velocity of sales

  • Product
  • Location
  • Business unit
  • Sale size category
  • Customer type (new, existing..)
  • Sale Lead source
  • Sale level of confidence
  • Sales channel
  • Time period
  • Sales campaign

Key business decisions to be taken for sales velocity

How much to invest into infrastructure for sales velocity? In other words, how much cost of speed one is ready to bear.