By Brian Hansford, VP of Client Services at Heinz Marketing
What is Sales Pipeline Velocity?
Sales Pipeline Velocity measures the speed at which prospects and qualified opportunities move from one end of the funnel to the other. Measuring Sales Pipeline Velocity is one of the best methods for B2B marketers to measure the health of revenue operations. Sales Pipeline Velocity is a great starting point for any B2B org that wants to build out a Marketing Performance Management strategy. It’s commonly listed as one of the top B2B marketing and sales KPIs.
Using our calculator helps identify potential problem areas and also provides visibility to how sales can increase in the future. Measuring velocity also helps align marketing and sales together for a common revenue goal.
Why is Pipeline Velocity Important?
The velocity formula uses 4 attributes which each have a significant material impact on sales performance and pipeline velocity:
- The number of active qualified opportunities
- The monthly average closed deal value
- Monthly deal win rate percentage
- The average length of sales cycle as a % of a 12 month period
Each of the four attributes can reveal areas that need optimization. Opportunity creation, win rates, sales cycle time, and average deal value can likely all be improved with your organization. Slight improvements in each area can increase overall pipeline velocity.
Metrics are important when they are used in the right context. Activity metrics aren’t usually the best to use when trying to show revenue performance. Show me one CEO that doesn’t want reliable facts and data that shows how much their marketing team drives revenue. Email performance and site visits are all well and good as long as they are presented in the right context and not as strategic measures of success. Pipeline velocity will help you identify cause and effect information that directly impacts revenue.
You can download your own free copy here. We provide detailed instructions on how to use the calculator to determine your company’s sales pipeline velocity. Enter the performance from the last few months and see what reveals itself as areas to focus on and improve. Let us know how this works for you!