MTI Selling

Reaching an optimal sales pipeline velocity is comparable to taking advantage of the force of velocity, a phenomenon that can be truly understood by Flash, the fastest superhero.

What is Pipeline Velocity?

Pipeline velocity is an indicator that shows how fast sales opportunities move through the sales funnel, from the initial search for prospects until they are converted into paying customers.

This indicator can be obtained using the pipeline velocity formula:

Let’s see a practical example 👇

A company selling software as a service (SaaS) estimates its sales pipeline velocity using the following data for four months:

Number of opportunities: 200

Average customer lifetime value: $10,000

Average sales cycle length: 80 days

Profit margin percentage 30%

Therefore:

Sales pipeline velocity = (Number of offers × Average customer lifetime value × Profit margin percentage) ÷ (Sales cycle length) Sales pipeline velocity = (200 offers × $10,000 × 30%) ÷ 80 days Sales pipeline velocity = ($600,000) ÷ 80 days Sales pipeline Velocity = $7,500 per day

Why is Pipeline Velocity Important?

Pipeline velocity is like the pulse of your sales process. A quickly moving pipeline shows a healthy and efficient sales process. On the contrary, a slow pipeline may be a sign of troubles, such as low-quality leads or ineffective sales tactics.

¿How to increase pipeline velocity to obtain efficient results?

1. Optimize the sales process:

Redefine and simplify the sales funnel to eliminate hurdles and speed up the process.

Rely on sales automation technologies in order to speed up manual tasks and enable teams to focus on high-value activities.

2. Segment the audience:

Redefine the market segmentation to better customize your marketing and sales strategies. Create specific campaigns for the different customer segments, addressing their particular challenges and needs.

3. Create specific content about the purchase cycle:

Develop content adapted to every stage of the purchase cycle, from the awareness to the decision stage. Use your success stories, testimonials and demos to speed up the decision-making stage.

4. Optimize your lead scoring:

Optimize and adjust your lead scoring criteria to more accurately identify prospects that are ready to be converted into customers. You can implement automatic tracking based on the scoring in order to prioritize focusing on sales.

5. Align the Marketing and the Sales teams:

This facilitates constant communication between the marketing and sales teams in order to share information about leads and market feedback. It’s important to establish service level agreements (SLAs) to ensure a rapid response to leads and an efficient transfer between marketing and sales.

6. Create Referral and Loyalty programs:

Develop referral programs that foster current customers to recommend the company to their colleagues. Offer loyalty programs that reward customers for recurring purchases or successful referrals.

7. Perform a continuous analysis and adjust:

Implement a continuous analysis process to assess the effectiveness of strategies.

Make adjustments based on the collected data, constantly adapting the tactics to enhance the pipeline efficiency.

These are some of the tactics that may help you increase the sales pipeline velocity. However, remember that what matters most is to have the right sales pipeline management since this is the first step of the staircase.

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