Deal velocity is the rate at which your sales team can convert a sales opportunity into a closed-won deal.
It is an essential metric for all SaaS firms, regardless of size. This is due to the fact that it enables sales management to evaluate their sales process, estimate income, shorten the sales cycle, and allocate better resources to sales personnel.
The SaaS velocity formula estimates the revenue your sales team will likely generate during a given sales cycle.
To calculate deal velocity number, multiply the number of sales opportunities by the deal value and the win rate, then divide the result by the sales cycle length.
After segmenting your market, calculate the deal velocity for each segment.
Sales Velocity = Number of Opportunities x Deal Value x Win Rate / Length of Sales Cycle
The best practice is to measure the deal velocity number regularly and then compare the historical values to the current ones. This enables you to adapt your sales and marketing strategies to promote revenue growth.