Software-as-a-Service (SaaS) companies live and die by the effectiveness of their sales teams. 

In the start-up phase, success is largely a matter of product knowledge, basic pipeline management, and personal connections. Scaling past that initial phase requires a refined, data-driven approach focused on accelerating sales velocity through targeted optimization.

But what does that involve and how can you increase sales velocity at your organization? 

What Is Sales Velocity? 

Sales velocity, also known as pipeline velocity, measures how quickly the average lead converts and begins generating revenue for your company. It’s a measure of both your sales team’s productivity and the overall health of your sales funnel. Sales velocity is usually expressed as a dollar value, representing the amount of revenue your team can reliably and predictably generate in a day. 

In addition to calculating sales velocity on an organization-wide basis, you can also narrow the metric down to a specific rep, department, or team. 

How to Calculate Sales Velocity

This is surprisingly simple, provided you have access to the following sales velocity metrics: 

• Average deal value/size (A): calculated by dividing the total value of deals in a specified period by the number of deals in that period
• Total number of opportunities (O): the number of qualified opps in a specified period 
• Win rate (W): A percentage value calculated by dividing closed deals by total opportunities
• Average length of your sales cycle (L): calculated by adding together the number of days it took to close each sale in a specified period, then dividing by the total number of deals closed in that period 

All you need to do is multiply your total number of opportunities by your average deal value and win rate, then divide that number by the length of your sales cycle. 

Consider the following example. The average sales cycle length for software companies is roughly 90 days — so with that in mind, imagine a theoretical mid-sized B2B SaaS company with the following metrics: 

• A=$3,042
• W=15%
• O=500

Now for the formula:

SV=(500x$3,042×0.15)/90

SV=$2,535

Based on the numbers above, this SaaS company can reliably generate around $2,500 a day. That’s decent revenue for a startup. Not so much for a mid-sized company. 

Here’s where the real value of sales velocity comes in. Each of its key metrics represents a cornerstone of your sales funnel. Consequently, examining each metric can provide clues as to where your team may be falling short. 

For instance, our notional company’s win rate is arguably a bit low for a B2B SaaS company, meaning there may be an issue with lead quality. 

How to Increase Sales Velocity

So, what can our little company do to improve its B2B sales velocity — and what can you do to improve yours?  

Identify Your Best Leads

On average, only 3% of your top-of-funnel prospects are sales-qualified leads (SQLs). Another 7% intend to make a purchase at some point, but are still in the early stages of their journey. The remaining prospects fall into two groups.

Warm leads who are interested but not ready to act make up around 30% of all prospects. Nurture them with additional content, but don’t dedicate too much energy to them. The remaining 60% aren’t interested and aren’t ever likely to be interested. 

To help your team differentiate: 

• Review your ideal customer profile. Look for common characteristics and behaviors shared by existing customers.
• Consider employing AI-powered lead scoring. 
• Nurture warm leads with occasional personalized outreach to keep them in your funnel. 

Personalize Your Outreach Efforts

Nearly 50% of all emails go directly to spam. If the majority of your outreach consists of cold emails, there’s a strong chance you’re part of that statistic. But what can you do to avoid the dreaded spam filter? 

How can you ensure your emails not only reach prospects, but that they’re compelling enough to open? 

The short answer is personalization. Leverage a combination of customer relationship management (CRM) data, website tracking details, generative AI, and the old-fashioned human touch both to personalize your outreach emails and ensure your mailing list remains free of invalid addresses. 

Focus on Sales Enablement

Even the best salesperson will have trouble closing deals if you haven’t equipped them with the necessary tools and skills. Start by talking to your sales reps to find out what they need. Then start looking into a sales enablement strategy that includes: 

• Training to develop both product knowledge and soft skills 
• Performance measurement and management 
• Sales collateral such as a knowledge base and promotional materials 
• Sales enablement tools such as hands-on product demos and workflow automation

Align Your Sales and Marketing Teams

Marketing and sales teams are two sides of the same coin, but in many organizations, they operate almost in isolation from one another. Take an active interest in supporting collaboration and communication between the two departments. Doing so will help your organization to develop more accurate buyer personas and better, more targeting marketing material. 

Integrate Your Tech Stack

Connect your CRM platform to your sales enablement, marketing, and advertising tools to establish a single source of truth for customer data. This will allow you to enrich your lead data with additional context and more effectively uncover bottlenecks in your funnel. More importantly, it will help to ensure a more cohesive, personalized experience for prospects. 

Host Better Demos & POCs

An interactive, personalized product demo will always perform better than a passive presentation. Instead of sitting through a  slide deck, prospects will see a hands-on demo within a simulation of a real production environment. After the demo, you can hand over that environment to the prospect, allowing them to interact with your software themselves. The only thing better than showing them how you can solve their problems is to let them experience it firsthand. 

Improve Your Follow-Up

Lay out a concrete process for following up with leads and prospects, including both automatic and manual outreach. Establish clear timelines with templates for common scenarios like quotes and post-demo messaging. And of course, log everything in your CRM. 

Drill Down Into The Data

You can’t optimize what you can’t see. And where your sales funnel is concerned, that lack of visibility means leaving money on the table. You need to measure every aspect of your process, from first contact to final sale.

Use those measurements both to identify blockages and uncover potential opportunities. 

Learn How You Can Build Better Sales Demos

You should now have a decent idea of how to improve your sales velocity. Next, you need to consider arguably the most important part of the sales process: the demo. 

Discover the sales best practices you need to accelerate your sales velocity with 7 Sales Demo Best Practices to Close Prospects. Then read the best product demo platforms of 2024 to find the perfect platform for putting these tactics into action.

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