Understanding Sales Velocity In Agent Reporting

Understanding Sales Velocity In Agent Reporting

Modified on: Wed, 12 Oct, 2022 at 4:12 AM

 

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 that 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

 

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