How to boost sales velocity with RevOps in HubSpot (Guide 2023)

What is sales velocity?

Sales velocity refers to the speed at which a company negotiates and finalizes a contract to close a transaction.

Suffice it to say, it's crucial for a business's cash flow. 

This is why optimizing this metric should be a north star for any sales leader.

How to calculate sales velocity?

Sales velocity is a critical metric to measure and monitor the performance of your business.

Here's the simple formula to calculate it.

Example:

Your sales team handles 10 opportunities per month. Each with an average contract value of $50k and a win rate of 75%. They typically spend 27 days on each deal before it's finalized.

Sales velocity = $13.888 per day

Key issues with sales velocity

• Bottlenecks at certain stages cause conversion issues
• Inefficient and unclear processes slow down sales
• Lack of automation and a lot of repetitive manual tasks
• Deals quality and strategy problems

How to boost sales velocity?

You need to improve at least one part of the formula:

• Increase the number of opportunities
• Increase win rate
• Shorten the sales cycle
• Increase average deal value

But, to improve these metrics, you first need to know how to measure and analyze them. And here's where HubSpot comes in. 

Let's dive deep into dashboards for actionable insights to coach reps and boost sales velocity.

What are your conversion rates?

First, you want to gain a general overview of your sales' success in converting opportunities into customers.

To do that, you look at the top-level funnel report with the conversion ratios of the lifecycle stages.

While it gives you an insight into the overall health of the pipeline, it doesn't tell you how exactly you can increase win rates. 

To do that, you need to understand what your reps' deal management looks like.

Deal stage conversion rates

By looking at where the deals are dropping off or getting stuck, you can quickly identify bottlenecks in the sales process.

From the perspective of sales velocity, you're looking primarily at:

1. Go/No-Go - contract sent to the client with time for iterations
2. Pending signature - the time it takes to sign a final version of the contract

Understand why buyers are dropping off

To gain a full picture of your sales process efficiency, look also at the reasons why buyers drop off.

Do that globally for the whole sales process:

As well as for individual reps:

Thanks to that, you know exactly in which part of the deal management your reps need enablement and coaching to increase win rates. 

Monitor trends in deal velocity

To monitor whether deal velocity improves or decreases, keep tracking the pipeline's historical data.

As a result, you see if improvements in the sales process bring results.

You also have an overview of your sales team's capability to hit revenue targets and can act proactively to make that happen.

What is your sales cycle length?

To shorten your sales cycle, you need to answer the basic questions:

1. What is the velocity over time?
2. Is the velocity bigger or lower in comparison to previous months?
3. What is the number of deals in a given month vs the time it took to close them?

Then, dive deeper into the sales cycle length by individual reps to see who is the fastest closer and who is at the bottom of the pile.

Now, look at the average time in the deal stage to understand how long it takes to advance a client from one deal stage to another.

You can see where deals get stuck and spend most of the time (e.g. contract negotiation).

As a result, you can spot which part of the sales process needs optimization to close deals faster.

Example of shortening the sales cycle with automation:

Carl Seller handles 10 opportunities per month. Each with an average contract value of $50k and a win rate of 75%. He typically spends 27 days on each deal before it's finalized.

This results in a calculation of $13.888 per day

By reducing the time in the "Pending Signature" stage from 15 days to 7 days with the automated contracting tool, he increases sales velocity to $ 19,736 per day.

What is your average deal size?

To increase the average deal size, you first need to understand:

1. How much revenue did we close this month vs the previous ones?
2. How many deals did we close this month vs the previous ones?
3. What is the average deal size this month vs the previous ones?

In the next step, you should go more granular to see the average deal size by rep.

Here you can see how much revenue brings every rep in any given month and how many deals on average he's closing.

Consequently, you can spot top performers and use their best practices in enablement for the rest of the reps.

Analyze revenue distribution across ICP

This analysis will give you insights into which ICP Tiers are most profitable.

Quick wins:

• Prioritize accounts with a higher win rate
• Identify which ICP Tier brings the most profit
• Improve targeting to focus on the Tiers /w highest ACV

Summary

Sales velocity is a crucial metric for business performance. Optimizing it should be a north star for every sales leader. To do that you should improve at least one part of its formula:

• Increase the number of opportunities
• Increase win rate
• Shorten the sales cycle
• Increase average deal value

As you could see, HubSpot is a great tool that gives you insights into how to enable reps and streamline a sales process.

Want to see how boosting sales velocity with RevOps in HubSpot can look at your case? Let's chat about how MAN Digital can help with that.