Sales velocity is the measurement of how quickly Opportunities become "Won" and generate revenue.
Sales velocity = Total Sales (in USD) / Average Sales Cycle (in month)
Where,
Total Sales Value = total sum of value of won opportunities (in the selected time range)
Average Sales Cycle = Total Sales Duration / Length of opportunities won
Total Sales Duration = Sum of the sales duration of all (won) opportunities
Length of opportunities won =
Individual sales duration = Difference between the time creation of opportunity & time when opportunity is marked won
In other words,
Sales Velocity = Monthly Sales Value, (V * L) = Total Sales Value / Normalised Average Sales Cycle (in months)
For Example:
Let's say a User had 3 Opportunities were marked WON in the time period of 1 week.
- Opportunity #1 was created on Dec. 1st and was marked WON on Dec. 20th (open for 20 Days) and had a sales value of $30
- Opportunity #2 was created on Dec. 15th and was marked WON on Dec. 21st (open for 5 Days) and had a sales value of $50
- Opportunity #3 was created on Dec. 21st and was marked WON on Dec. 22nd (Open for 2 Day) and had a sales value of $70
In this case,
Total Sales Value = $150
Total Sales Duration = (20 days from Opportunity #1 + 5 days from Op #2 + 2 days from Op #3) = 27 d
Average Sales Cycle = 27 days / 3 won opportunities = 9 days
Average Daily Sales Value = $150 / 9 days = $16.67 / day
Monthly Sales Value = ($150 / 9 days) * 30 days = $500/month
Sales Velocity = $500/month