What is Pipeline Velocity and How to Optimize It?

Author's avatar Sales Dec 29, 2020 16 minutes read

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    Peter Caputa

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    There are a whole host of sales metrics you need to identify, track, and optimize to understand your sales process, which ultimately leads to consistently increasing conversions and closing more deals.

    Customer lifetime value, customer acquisition cost, average deal size, NPS, total revenue, to name a few.

    However, one sales metric that is very important, but often underlooked by sales teams is Pipeline velocity.

    Pipeline velocity is a key metric that can help you understand the overall health of your sales pipeline. By optimizing your pipeline velocity rate, you can bring targeted changes to your sales process and build a more efficient, cohesive sales team.

    Excited? Let’s dig in.


    What is Pipeline Velocity?

    What comes to your mind when you think about pipeline velocity?

    Speed? You’re right. Pipeline velocity is related to speed, but not in terms of tracking it, but also in terms of understanding it.

    Pipeline velocity refers to the speed with which leads move through the sales pipeline. Think of it as a pipeline that carries water. If the pipeline is clear, the water will flow fast. However, if it’s clogged, the water will flow significantly slower.

    Similarly, the fewer barriers there are in your sales pipeline, the faster your leads will convert. 

    As Haris Bacic of PriceListo explains, “Pipeline velocity measures how long it takes a business to move a customer through the sales funnel, or pipeline, from expressed need to conversion. As sales velocity grows in the form of more customers making conversions faster, for instance, sales objectives are met, and exceeded earlier.”

    Measuring your pipeline velocity can help you with sales forecasting. While there are multiple ways to do sales forecasting, forecasting based on your pipeline velocity rate should be significantly more accurate, since the forecast is also based on live sales data and not just sales rep estimates.

    Editor’s Note: Want to keep a close eye on your sales funnel? This HubSpot Sales Activity dashboard template tracks every stage of your sales funnel and watches for leaks. Download this dashboard template to track top of funnel activity for each sales rep.

    HubSpot sales activity dashboard template

    Related Content: 11 Expert Tips for Driving More Sales Qualified Leads

    How Do You Calculate Pipeline Velocity?

    In order to calculate pipeline velocity, you can apply the same principle as calculating velocity in physics. In physics, velocity is the rate of change of position with respect to time.

    Now how can you apply this idea to sales? You’ll need the following info:

    • The number of SQLs in your pipeline
    • Your sales team overall win rate percentage
    • Your sales team average deal size

    But wait, where is your time? That’s actually the average duration of your sales cycle.

    calculate pipeline velocity

    So, to calculate pipeline velocity, you need to multiple the qualified opportunities in your pipeline, the average deal size for your sales team, and the overall win rate of your sales team and divide the result by the average time of your sales cycle. 

    Sounds complex with all the mathematical jargon, but it’s really not.

    For example, let’s say a sales rep has 10 qualified leads, win rate is 20%, and average deal size is $1000. The current sales cycle is 45 days. 

    So, according to the given formula, their pipeline velocity of that sales rep is $45 per day, and $1350 a month. (see how easy it is for sales forecasting?)

    Even slight improvements in each of these areas can increase your overall pipeline velocity rate. For example, if you can qualify more leads or increase your average deal size with upsells, you can increase your sales velocity rate.

    Editor’s Note: Looking for an easy way to track all your sales reps? Use this Hubspot Sales Rep Performance Dashboard template to get a holistic view of all activities and tasks carried out by each sales representative and ensure your team members are hitting their goals.

    Hubspot sales rep performance dashboard template

    Related Content: 23 Foolproof Sales Presentation Tips to Help You Close More Deals

    14 Ways to Increase Your Pipeline Velocity Rate

    Now that we’ve learned that even tiny improvements in the sales cycle can increase your pipeline velocity rate, let’s discuss 14 ways sales experts are doing exactly that.

    1. Understand what causes leads to drop off
    2. Increase qualified leads
    3. Use podcast interviews
    4. Schedule the next step ASAP
    5. Use FOMO
    6. Leverage discounts and special deals
    7. Shorten the sales cycle
    8. Introduce product demos
    9. Follow up
    10. Inform future targeting
    11. Utilize remarketing
    12. Simplify the deal
    13. Understand your customer’s paint points
    14. Unify all departments

    1. Understand what causes leads to drop off

    Understand which steps in your pipeline are causing the most leads to drop off.

    As Gary Zhou of Colored Contacts says, “In most cases, the different parts of your pipeline are not all equally effective. Some do a great job of moving leads into the next stage of your pipeline, while others deter potential customers and cause them to leave your sales funnel altogether.

    You cannot improve your pipeline without thoroughly understanding it, so take the time to evaluate the key metrics and statistics associated with each section of your pipeline so you can identify and improve the weakest links.”

    Related Content: 16 Essential SaaS Sales Metrics You Should be Tracking

    2. Increase qualified leads

    Amir Yazdan of GroMD explains, “Many leads that come in are unqualified, which don’t add any value to your marketing strategy. Therefore, it becomes increasingly important to validate your leads before you put too much effort into pursuing them. Think along the lines of utilizing gated content, implementing more targeted marketing campaigns, or closing in on tighter demographics for your social media ads.”

    Eric Jones of Couture Candy is of the same opinion.

    According to Jones, one of the best ways to increase the pipeline velocity rate (without changing your pricing), is to “increase the number of quality leads in the pipeline.

    It might seem like adding as many leads as possible to our pipeline is best—but it can hurt us. We should focus on putting quality leads in the pipeline; otherwise, our reps are wasting time on leads that won’t convert to won deals.

    To improve the quality of the leads in our pipeline, we need to know our personas (if we’re B2C) or ideal company profiles (if we’re B2B).

    A persona is the profile of a qualified prospect. Their age, location, and title might all play into your persona.”

    Andrea Loubier of Mailbird agrees with the two and adds, “To increase your pipeline velocity rate, speak with your sales team and be very specific with what they will treat as a ‘qualified lead.’ 

    Too often, companies waste too much time on leads that should never be explored, much less deemed as qualified. Once you set strong guidelines regarding this, you’ll see more sales come through the pipeline.”

    Related: 15 Expert Tips for Driving More Marketing Qualified Leads

    3. Use podcast interviews

    In this age where consumer interest in audio is at an all time high, leveraging podcasts is a great way to increase pipeline velocity.

    David Ackert of Ackert, Inc explains, “For companies or firms that have a long typical sales cycle, or that have repeat clients, one of the most effective ways to increase pipeline velocity is to have a more substantive conversation with the prospect using a podcast mechanism.”

    How do podcast interviews help in increasing pipeline velocity?

    They’re “Ideal for developing a relationship with your prospect and adding value to the relationship. It advances you from a vague soliciting acquaintance to a cross-promoting strategic partner, at least in the context of the given episode.

    This soft-touch bolsters your connection and invariably advances along the deal, while also demonstrating your knowledge of (and value to) their business overall.” Adds Ackert.

    4. Schedule the next step ASAP

    “A way to increase pipeline velocity is scheduling the next step while in the meeting with the prospect.” Explains Kyle Vamvouris of Vouris

    “So many salespeople make the mistake of saying ‘I’ll send you over an email and we will find a time to meet.’ Instead, say ‘What time would work best for you next week?’ This will reduce the gap between steps in the sales process.”

    Alexandra Zamolo of Beekeeper is of the same mind and says, “Respond to your incoming leads faster. Many marketers wait until a potential lead was completely forgotten about their request for information on the gated content that they read. As with anything in business, there’s a small window of opportunity. Don’t let that window close on your potential sales from incoming leads.”

    5. Use FOMO

    Robert Cialdini, marketing expert and author of the immensely popular book Influence, views scarcity and urgency as one of the six principles of persuasion. He says that scarcity and urgency combined are a successful formula for increasing online sales. 

    To increase pipeline velocity, increase the opportunities to make sales. However, as Janice Wald of Mostly Blogging says, “You want to make those opportunities available for only a short span of time.” 

    This builds on people’s Fear of Missing Out, or FOMO.

    Wald further adds, “Phrases like ‘limited time offer’ let people know they have an opportunity but one that is short-lived. Consider rewarding the new customer with a loyalty program perk. This will entice them to get you a referral. These tips increase the speed of your funnel.”

    Brands are seeing excellent results after using Cialdini’s principle in their sales cycles. Creating a sense of scarcity helped Marcus Taylor increase his conversion rate from 2.5% to 10.8%.

    6. Leverage discounts and special offers

    Using tiered deals and strategic discounts is another great way of increasing your sales pipeline velocity and prompting prospects into taking action.

    As Jonathan Aufray of Growth Hackers Business explains, “Sometimes, your sales funnels can be very long. Often weeks for B2C and months for B2B. To speed up your sales process, proposing a discount/offer that is limited in time will help you make the sale and close the deal. For instance, that’s why promotions for Christmas, Valentine’s Day, Spring Break, Summer Holidays or Black Friday are working so well.”

    Even this year, amidst a global pandemic, Black Friday sales hit a new record with consumers spending $9 billion. That’s an increase of a whopping 21.6% over last year

    black Friday sales
    Source: Voguebusiness.com

    7. Shorten the sales cycle

    “By reducing the amount of time your SQLs move through the pipeline, you can increase the velocity.” Shares Mike Sadowski of Brand24.

    What does this involve?

    “Lots of small changes that, over time, add up. Making these changes doesn’t take that much money and resources, too. Improving areas such as communication, meetings, management, and prioritizing can shorten the sales cycle by a huge margin. It’s essential to start small, and you’ll see these changes compound to large improvements in a while.” Adds Sadowski.

    And as Sarah Graham of Quik Camo says, “Do not complicate it and avoid unnecessary requirements. Answer all inquiries fast. Make it as easy as possible and over time, your pipeline velocity rate will increase.”

    James Chong of Top Generator agrees with all and adds, “Perhaps your sales funnel requires two phone calls when you could really close with just one. Or perhaps your website funnel requires 3 clicks to get to the checkout page when just 2 would suffice. 

    Critically examine every single part of your funnels and cut out the pieces that are unnecessary in order to supercharge your pipeline velocity.”

    8. Introduce product demos

    If you have a high-quality product, leverage product demos as much as possible. They can easily be your best sales tool. 96% of customers find video helpful when making purchasing decisions online.

    “There are numerous tactics a seasoned sales professional can add to their internal process to increase pipeline velocity. The best method I’ve found is to introduce a product demo”. Shares Eric Melillo of COFORGE.

    “So, I take what I’ve learned in the earlier sales stages and customize a demo to solve the prospect’s biggest challenges. The hyper focused demo helps to reduce sales friction, serves as a solution to their pain points and a vehicle to help them grow. After the demo, the sale process can more quickly advance without restriction.”

    Some tips to optimize your product demos,

    • Keep your videos short and sweet. Remember consumers have dwindling attention spans and a long-winded video won’t get their attention as much as a short and interesting one will.
    • Make your product demos valuable. Instead of going on about your product and its features, talk about how you can solve your consumers’ problems. Show your consumers why they NEED your product.
    • Show your product from multiple angles. 
    • Try to answer as many FAQs as possible. 

    9. Follow up

    Bruce Harpham of SaaS Marketing Services aptly says, “Take a proactive approach and use habits to maintain engagement.” 

    What most people do wrong is send a quote or proposal to a customer and then sit back to wait for a response. 

    Harpham suggests businesses to, “Make it a habit to keep following up.”

    10. Inform future targeting

    Sasha Matviienko of Growth360 shares, “One of the main variables that go into the Pipeline Velocity metric is the Number of Leads and Closing Ratio. The higher the quality of Leads, the higher the chance to close them. This is clearly a marketing function. 

    While many companies measure Leads from online marketing, only few use the quality of Leads to inform future marketing efforts. Using advanced tracking and feeding offline Sales or CRM data into Google Analytics and Adobe Analytics is a proven way to inform future targeting.

    For example, out of 100 Leads, 45 converted into paying customers. Let Google or other marketing platforms know which ones. There are many ways to do this – connect Salesforce to Google Analytics, upload offline Sales data, upload Emails or IDs, and create new audiences. This will improve the quality of Leads and as a result – improve Pipeline Velocity.”

    11. Utilize remarketing

    Remarketing works. Research shows that it consistently outperforms other marketing strategies. 

    “Finding new customers is a lot more difficult and more expensive than retaining existing ones so improving your pipeline velocity is very important. With remarketing, we manage to keep our agency top of mind when our prospects or leads are browsing the internet. We also utilize a sales CRM to ensure our leads are kept in one place, so we don’t lose track of them. This way we can consistently stay in touch and try to be as helpful as possible. 

    That could be through sending over helpful resources or even just a friendly Christmas card. Either way, keeping your business top of mind for your customer is key in ensuring they don’t fall out of your sales funnel.” Irene Lopez of Online Optimism shares.

    12. Simplify the deal

    Overcomplicating your sales processes, products, and deals can clog your sales pipeline. Make it easy for prospects to understand your product and go through the sales funnel. 

    As Josh Skinner of TINYpulse explains, “More often than not, sales representatives will attempt to pile on value by over-complicating the deal (AND the product). People like to buy things that are simple and just make sense.”

    Skinner recommends, “Clear and effective communication that won’t add more yellow lights to slow down the deal. Be precise and communicate the value that you are delivering to your customers – it’s this that will drive a sale home and increase your pipeline velocity.”

    13. Understand your customers’ pain points

    Identifying and solving your customer’s pain points through your product copy and videos can boost your conversions. 

    “Prioritize asking timeline and pain oriented questions early in your sales process”. Explains Russell Morgan. 

    “Ask multiple follow up questions around this pain, and when they’re looking to solve it by. Most people hear a company say they have X issue that needs to be solved, and use that as their queue to start discussing their service / product and how it solves that pain. Elevating a sales conversation from a prospect having X issue, to wanting to achieve Y goal is a commonly missed opportunity in many sales cycles.

    When you understand not only a prospect’s pain, but their desired future state (the company’s desired future, and the contact’s desired future) your solution will become much more powerful and appealing in a prospect’s eyes. This shift in positioning your solution helps to prevent deals dragging in the pipeline.” 

    14. Unify all departments

    As Kevin Mercier aptly says, “Uniting all departments to work as a single unit can be extremely effective in order to increase your pipeline velocity.”

    So for example, “If communication between the marketing and sales department is poor, it may lead to poor decision making which can clog up the pipeline.” Explains Mercier.

    Tiffany Lewis of More Meaningful Marketing aptly concludes and says, “If you have clarity on your prospect’s buying journey, you can explore the top, middle, and bottom of the marketing funnel to more efficiently and accurately speak their language + convert them with relevant content for their current state of the journey.”


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    Article by
    Maham S. Chappal

    Maham S. Chappal is a content writer for SaaS and marketing brands in B2B. She’s been published in several leading publications including Social Media Examiner. She loves writing in-depth, research-backed content that drives traffic, increases brand awareness, and boosts ROI. When she’s not writing, you’ll find her engrossed in the latest John Grisham novel. You can find her on LinkedIn or on mahamschappal.com

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