Library > Pipeline velocity

Pipeline velocity

Written By Maria del Mar Vázquez Rodríguez

If you have a B2B business, you know that closing deals efficiently and effectively is key to driving revenue growth. This is where pipeline velocity comes in. Pipeline velocity measures how quickly potential customers move through the sales pipeline, providing insights into how well your sales processes are working and where you can make improvements. By tracking pipeline velocity, you can optimize your sales strategies, make data-driven decisions, and close deals faster.

In this article, we’ll delve into the following topics:

What is pipeline velocity?

Pipeline velocity is the speed at which potential customers progress through the sales pipeline, from initial contact to contract closure. It is an important statistic for companies to understand their sales process and track the performance of their sales activities.

Synonyms

  • Sales velocity 

  • Deal velocity

10 ways to increase pipeline velocity

Improving pipeline velocity requires a combination of tactics, from optimizing sales processes to leveraging data insights.

  1. Improve lead generation: Ensure your lead generation efforts are targeting the right audience and delivering qualified leads to your sales team.

  2. Streamline sales processes: Reduce the time it takes for deals to move through the sales process by eliminating unnecessary steps and automating where possible.

  3. Focus on high-priority deals: Prioritize the deals that have the most potential and require the least amount of effort to close.

  4. Optimize your sales team: Make sure your sales team is well-trained and equipped with the right tools and resources to close deals quickly.

  5. Use data-driven insights: Analyze your sales data to identify areas for improvement and optimize your sales strategies accordingly.

  6. Provide exceptional customer experiences: Ensure your customers have a positive experience throughout the sales process, from initial contact to closing the deal and beyond.

  7. Nurture leads: Develop a nurturing program to keep potential customers engaged and build trust over time.

  8. Implement a CRM system: Use a CRM system to track and manage leads, streamline communication, and improve collaboration between sales and marketing teams.

  9. Use sales analytics: Leverage sales analytics to measure and track key performance indicators (KPIs) and identify areas for improvement.

  10. Continuously iterate and improve: Regularly review your sales processes, identify areas for improvement, and make iterative changes to optimize your pipeline velocity.

Why is pipeline velocity important for B2B business?

Pipeline velocity offers important insights into a B2B sales team's effectiveness, allowing them to detect bottlenecks in the sales process and enhance conversion rates. Businesses which monitor pipeline velocity can better understand their clients' needs and change their sales techniques accordingly, resulting in higher revenue and growth.

How do you calculate pipeline velocity?

To calculate pipeline velocity, you need to multiply the number of deals in your pipeline by the average deal value and your conversion rate, then divide that number by the length of your sales cycle. The formula is as follows:


Pipeline Velocity = (Number of Deals x Average Deal Value x Conversion Rate) ÷ Sales Cycle Length


For example, if you have 50 deals in your pipeline with an average deal value of $10,000 and a conversion rate of 20%, and your sales cycle length is 60 days, your pipeline velocity would be:


Pipeline Velocity = (50 x $10,000 x 20%) ÷ 60 = $16,667

FAQs

Q: Why is it important to segment customers into different personas?

A: Segmenting customers into different personas helps businesses understand their unique needs and preferences. This allows businesses to tailor their customer journey maps to each persona, leading to a better customer experience and higher customer satisfaction.

Q: How can businesses use customer journey maps to improve customer satisfaction?

A: By analyzing the customer journey, businesses can identify pain points and areas of friction in the purchasing process. By making changes to these areas, businesses can improve the customer experience, leading to higher customer satisfaction.

Q: Is it necessary to update the customer journey map regularly?

A: Yes, it is essential to update the customer journey map regularly to ensure it remains relevant and reflects any changes in the business or the customer's needs. Regular updates will ensure the map remains an effective tool for improving the customer experience.

https://dreamdata.io/blog/increasing-pipeline-velocity

https://dreamdata.io/blog/sales-intelligence-b2b