How to Calculate Sales Velocity

How to Calculate Sales Velocity
September 18, 2018
Sales velocity measures the expected output you would get from a sales rep or team in a given period of time.

This blog post was originally published by Rekener, a Brainshark company.

Sales velocity measures the expected output you would get from a sales rep or team in a given period of time.  

To calculate sales velocity, you multiply your opportunities created in a period, by your ASP and close rate, and then divide all that by your sales cycle, measured over the same duration that you are measuring.

Sales velocity measures the expected output you would get from a sales rep or team in a given period of time.

For example, if you are creating 20 opportunities per month, your ASP is $10,000, your close rate is 35%, and your sales cycle is 3 months, then your sales velocity would be (20 * $10,000 * 35%) / 3 months = $23,333 per month.  This means you would expect to close $23,333 per month from the opps that are being produced.

To measure sales velocity with Salesforce data, you first need to calculate opps created, close rate, ASP, and sales cycle from your Salesforce data.  

  • To measure opps created with Salesforce data, you just need to count the number of opportunities that have a created date in the period you are measuring.
  • To measure closed funnel close rate with Salesforce data, count the number of opportunities won that have a close date in the period, then count the number of opportunities lost that have a close date in the period.  Then divide the opportunities won by the sum of the opportunities won plus lost.
  • To measure ASP with Salesforce data, take the sum of the Amount from closed won opportunities that have a close date in the period you are looking at, and divide by the number of opportunities won that have a close date in the period you are looking at.
  • To measure sales cycle with Salesforce data, you need to run a report of opportunities won in the period you want to measure.  Count how many opps that is. Then, for each opp, calculate the number of days between Created Date and Close Date. Sum up that total number of days.  Divide that by 30 to make it monthly. Then divide the number of months by number of opps you won.

Once you have opps created, close rate, ASP and sales cycle from your Salesforce data, you need to multiply (Opps created * close rate * ASP) and divide by sales cycle.

To measure sales velocity with HubSpot CRM data, you first need to calculate deals created, close rate, ASP and sales cycle from your HubSpot CRM data.  

  • To measure deals created with HubSpot CRM data, just count the number of deals that have a created date in the period you are measuring.
  • To measure closed funnel close rate with HubSpot CRM data, count the number of deals won that have a close date in the period, then count the number of deals lost that have a close date in the period.  Then divide the deals won by the sum of the deals won plus lost.
  • To measure ASP with HubSpot CRM data, take the sum of the Amount from closed won deals that have a close date in the period you are looking at, and divide by the number of deals won that have a close date in the period you are looking at.
  • To measure sales cycle with HubSpot CRM data, you need to run a report of deals won in the period you want to measure.  Count how many deals that is. Then, for each deal, calculate the number of days between Created Date and Close Date. Sum up that total number of days and then divide by 30 to make it monthly.  Then divide the number of months by number of deals you won.

Once you’ve calculated deals created, close rate, ASP and sales cycle with your HubSpot CRM data, you need to multiply (deals created * close rate * ASP) and divide by sales cycle.

Sales scorecards can automate sales velocity calculations, and can break this down by sales rep, opportunity type, industry, product, or any other dimension.  Schedule a meeting with our team to learn how scorecards help managers provide better data-driven sales coaching.

Looking for more sales metrics know-how? Our comprehensive Sales Metrics Glossary will show you how to calculate 30 critical KPIs using CRM data.