What is Sales Velocity?
A formula that measures how quickly your sales team generates revenue, combining deal count, win rate, average deal size, and sales cycle length.
Definition
Sales velocity = (Number of Opportunities x Win Rate x Average Deal Size) / Sales Cycle Length in Days. The result tells you how much revenue you generate per day. It's a composite metric that captures the health of your entire pipeline in one number. Improving any of the four variables increases velocity, but the highest-leverage move varies by company. Early-stage startups usually benefit most from increasing deal count; mature companies from improving win rate or deal size.
Why It Matters
Sales velocity gives you a single number to benchmark your pipeline efficiency. If velocity is increasing quarter over quarter, your revenue engine is getting more efficient. If it's flat or declining despite more pipeline, you have a conversion or cycle-time problem. RevOps teams use sales velocity to forecast more accurately and identify which stage of the funnel needs attention.
Example
A team has 100 qualified opportunities, a 25% win rate, $40K average deal size, and a 60-day sales cycle. Their velocity is (100 x 0.25 x $40,000) / 60 = $16,667 per day. If they can shorten the cycle to 45 days with the same inputs, velocity jumps to $22,222 per day.