In sales, there is a lot of complexity. A lot of moving parts, a lot of scenarios, a lot of things to measure. If you can’t measure, you can’t manage, so how to make sense of the data onslaught and focus on the really important stuff?

I used to work with a company called The TAS Group, who invented something called The Sales Velocity Equation to help with the problem. In this equation, anyone in charge of sales needs to focus on – and measure – just four things to get a sense of how successful their sales efforts are, and whether they are improving or not.

The four levers are the number of qualified opportunities your team works in a given period, the average deal size of the deals you win during that period, your win percentage, and the length of the sales cycle of all qualified deals before you win or lose them.

Your sales velocity – which is a measure of how effectively you sell – is a function of the top three levers multiplied by each other, divided by the all-important factor below the line, the sales cycle length. This gives you a dollars per week, month – however you measure your sales cycle – for a given period.

Consistency is the name of the game with this. You may know that I’m a big fan of consistency. You must be consistent in how you define the period (I recommend looking over at least a quarter) and in how you measure a qualified opportunity, otherwise you’re comparing apples and oranges. If your sales velocity increases from period to period, you’re selling more effectively. If it decreases, less effectively.

The key is to have an iron grip on your sales process and your sales cycles, because time is a killer and that factor below the line can kill all your good work elsewhere.

You can read more about this important topic here and here.

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