This SaaS Metric Is Underrated & Misunderstood

Sales velocity measures the efficiency at which you generate revenue from your pipe each day.

(Because, unlike a baker selling bread, SaaS companies do not close deals every day.)

A common confusion: velocity is NOT the same as your sales cycle––the time it takes to close an opp.

To calculate velocity (V), you need:

→ No. of Opps (#)
→ Ø deal size ($)
→ Win rate (%)
→ Sales cycle (L)

Two examples:

🟩 98 Opps x €210K average deal size x 24% win rate / cycle (72 days) = €64,800 per day

🟥 127 Opps x €160K average deal size x 14% win rate / cycle (58 days) = €49,972 per day

With that, sales velocity gives you a quick, easy-to-grasp, and holistic snapshot of values, that are otherwise isolated from each other.

Like a blood sample. 🩸

Because it is daily, you can make adjustments quicker (per value, but now in an interconnected way).

Is there an industry standard?

Not really, since it's mostly an internal metric to compare today's performance to yesterday's.

Are you tracking your sales velocity already?