Sales Velocity is the time it takes for a new lead to become a closed deal. As with many things, faster is better when it comes to Sales Velocity. But with so many variables contributing to a complex sales cycle, it helps to understand the factors that are proven to increase velocity.
In this equation, there are four levers to sales velocity:
- Increased number of opportunities
- Increased average deal value
- Increased win rate
- Reduced sales cycle
Most sales managers tend to focus on the first lever - filling the pipeline and increasing the number of opportunities. Management reinforces this by asking the sales team questions like “How many calls did you make?” or “How much did you add to your pipeline last month?” This is also when sales leaders tend to increase up the pressure on marketing to deliver more qualified leads as well.
Unfortunately, this solution is only one part of the equation - average deal value, increased win rates, and reduced sales cycles are equally as important. The question then becomes how to drive selling behavior and ensure sales teams are optimizing each new business opportunity. Aberdeen recently noted that:
“As top-performing selling teams continue searching for ways to reduce their sales cycles and increase their win/loss “batting average,” the use of contemporary technology tools holds significant promise for better sales team performance in 2012,” Aberdeen Group*
Driving Sales Behavior with Guided Selling
CPQ (Configure, Price, Quote) is one tool designed specifically to increase sales velocity. Traditionally, it has been known to reduce errors and speed up sales cycles but more recently companies are utilizing configuration as a way to guide the selling process.
By creating an automated guided selling process with CPQ, sales managers gain complete control over up-selling, cross-selling and pricing presented to customers. Rather than investing time in constant training of their sales staff on what products or bundles go together, they can focus on what makes sense to offer clients at the right time in the sales process, maximizing deal sizes and protecting margins. Training is then reduced to simply getting sales up to speed with the process and how to use the tools available.
Going back to the Sales Velocity Equation – you've now addressed at least 2 of the key factors in increasing velocity. Stay tuned, next week we’ll address the last piece of the puzzle “Increasing Win Rate.”
*Aberdeen Group 2012 Analyst insight paper – Lead-To-Win 2012: Managing People, Process and Technology to Optimize the Last Mile of the Sales Cycle.