Sales velocity measures how quickly you can convert prospects into customers and begin to generate revenue for your business. It's a meaningful metric that helps forecast future sales, while providing a health snapshot of your current funnel.
If you want to improve sales velocity and increase revenues, a key place to start is with your sales process or sales workflow.
So what is a sales workflow, why is it so important, and how do you structure it to get the maximum number of sales, efficiently?
In this post, we’ll help you identify the ideal sales workflow for your team to promote productivity and performance in order to increase sales velocity.
Calculating Sales Velocity
Sales velocity is based on 4 things:
- Number of opportunities in your pipeline - How many leads or deals are being worked?
- Average deal size - What is the average closed deal worth to your business over the lifetime of the customer?
- Win rate - What percentage of opportunities convert into sales?
- Length of sales cycle - How long, on average, does it take for a new lead in your pipeline to close?
To calculate your sales velocity, multiply 1 x 2 x 3, then divide by 4.
Essentially, you're dividing the expected lifetime value of all opportunities in your current pipeline, by the amount of time it will take to secure that value.
Your sales velocity is impacted by each of these 4 levers. Specifically, to increase sales velocity you can either increase the number of opportunities in your funnel, the average value of a closed deal, or your conversion rate. Alternatively, decrease the amount of time it's taking on average to close those deals.
The challenge, of course, is that these elements don't move independently. Move one lever in the desired direction and you may just move another in the wrong one.
This is the lens in which you should design and refine your workflows and sales process.
What is a Sales Process
As the adage goes, "your input predicts your output". Creating a sales process gives you a baseline, desirable outcome that you can iterate on and improve to generate positive turns repeatedly. Figure out what works, test improvements to the workflows, and turn it into your own patented formula for success.
In a nutshell, this is what the sales process is — a series of steps that transforms the prospect into a customer. And a valuable one at that. The sales process is also sometimes known as the sales workflow or sales playbook.
This should not be confused with a sales funnel, however.
While “sales funnel” is sometimes used interchangeably with “sales process,” here’s the difference: A sales funnel is the set of steps that a prospect takes to become a customer. A sales process is the set of steps that your sales team takes to convert the prospect into a customer.
It’s important to understand how the two work together.
Your sales funnel isn’t just an abstract marketing concept that you and your prospective customers passively experience. Instead, think of your sales funnel as a series of opportunities for you to influence your prospective customers.
Sales Funnel Stages
A sales process moves leads through your sales funnel. A sales funnel commonly has the following stages (and opportunities):
- Awareness - Your prospect becomes aware of the problem and seeks out information about it.
How to take advantage of your opportunity: Target prospects with a pain point that your product or service solves. Be where they are searching, or create value or content around the problem or challenges related to your offering.
2. Interest - In the process of exploring their need or problem, your prospect is introduced to your solution. They become aware that a possible solution exists and explore it.
How to take advantage of your opportunity: Get in front of your prospects through marketing and/or sales outreach, and help them connect the dots between their pain point and your solution. Educate, and provide value and credibility.
3. Consideration - They are engaged enough in that they have identified that they have a problem they want solved, and they are actively exploring your product as a, or one of many, solutions.
How to take advantage of your opportunity: Offer the prospect a chance to learn more about your product through demos, free trials, and case studies.
4. Purchase - Hooray! The prospect has made the purchase, but your job isn’t over yet.
How to take advantage of your opportunity: Invest in onboarding and training. Introduce customers to your product and help them understand how to get the most value out of it.
5. Advocacy - After a customer is using their product, they can making additional purchases, stay longer, and/or increase their value by referring others to you.
How to take advantage of your opportunity: Focus on customer satisfaction by nurturing your relationship, supporting their ongoing needs, and expanding the value you can provide.
The sales process or workflow is essentially the steps you or your sales team takes to guide the prospect through this funnel.
The Importance of Predictable Sales Workflows
There are several benefits to developing your own sales process with predictable workflows. They include:
Understanding Your Prospects - Knowing how customers go from awareness to purchase helps you predict their journey and plan accordingly. You'll know who target in the first place, and you'll be able to develop the resources you need to generate awareness and move deals forward.
Educating Your Prospects - A good sales process supports leads by offering educational content throughout their journey. Gain their trust by helping them determine whether (or not!) your product is a viable solution for their problem.
Improving Your Productivity - Once you create a sales process, you can refine and improve its elements to make it more effective and more efficient. Eliminate or automate redundant tasks, and help your team spend more time engaged in high-value activities.
Boosting Team Morale - Take uncertainty out of the equation and give your team the tools they need to succeed. A good sales process ensures a focused, confident, and effective team.
Workflows are needed at each point of contact to keep the lead moving from one step of the sales process to the next. They are the building blocks of your process.
What are Popular Types of Sales Processes?
Different sales teams adopt different sales processes. The resources and messaging needed at each step or stage will vary depending on what is being sold, and is beyond the scope of this article. But it's very helpful to identify the broader stages of your process. Let's take a look at some common sales processes.
The 4-step sales process
- Approach - Find your ideal prospects and get in front of them or make contact.
- Present - After setting up an appointment, win your contact over by a demonstrated understanding of their pain points and thorough explanation of your solution.
- Close - With an identified need and a solution that fits, seal the deal with a call to action.
- Follow Up - Continue to invest in your relationship for customer success, even after the sale.
The 5 stage sales process
- Prospecting - Prospecting is the process of finding potential customers, called prospects.
- Preparation - Prepare yourself for a meeting with potential customers by understanding their pain and how your product can solve it.
- Presentation - Demonstrate your product’s unique value through a demo or a trial.
- Handle Objections - Plan for questions and hesitations.
- Follow Up - Continue following up until you close the deal, and then support them post-buy.
7 step sales process
- Get leads - Find leads for your sales funnel.
- Qualify leads - Ask questions of your leads to ensure that they’re the right ones for your funnel.
- Capture leads - Add new leads into your customer relationship management software (CRM).
- Confirm appointment - Send emails to confirm your upcoming appointment.
- Prepare for the appointment - Learn all you can about a prospect ahead of an appointment.
- Present - Answer the question, “Why choose Us?” Prepare to answer any objections.
- Follow Up - Your prospect may not be ready now, but that doesn't mean they'll never be ready. Continue following up until they are, and then support them increase satisfaction and value.
8 step sales process
- Prospect - Find leads for your funnel.
- Connect - Reach out to those leads.
- Qualify - Make sure those leads are the right customers for your product.
- Show value - Show them why they need your product.
- Plan for hesitations - Ease their hesitations with data and facts.
- Close the deal - Have a specific call to action and get the lead to take the next step.
- Onboard the new customer - Help the customer get familiar with your product.
- Follow up - Continue nurturing your customer post-purchase.
Which Sales Process Should You Choose?
None of the above. And all of the above.
The steps needed to create an opportunity and advance it to a sale vary wildly by company and product (and can even change over time). "Presenting" may mean a brochure or website to one company, an in-person meeting to another, and a free trial to a third.
Instead of following someone else’s pattern, break down your process into a set of steps or stages that make the most sense for you. Borrow key elements from the above processes but don’t be afraid to make your own path. Some complex enterprise sales processes might have 20 or 30 steps. Selling an automobile might only have 4 steps. Choose the elements that are necessary for your solution.
The above processes emphasize different aspects of the sales workflow. Some are more concerned with lead qualifications, others on addressing objections. However, they all emphasize the importance of following up after a prospect has become a customer. This is a step you do not want to miss since it can sometimes take anywhere between 7 to 10 follow ups to get a sale.
Once you do, it's a lot less expensive to keep a customer and increase their value than it is to find a new one.
Adapting Processes to Boost Velocity
It's vital to consider sales velocity at every step of sales process planning.
Adding an additional step, for example, may increase conversions, but lengthen the sales cycle. Increasing the number of opportunities in the funnel, may stretch the sales team thin and lead to a lower win rate and lifetime value. Heck, adding a step to your sales process may even shorten your sales cycle, by reducing issues or friction at other stages.
The bottom line is that developing and refining a winning sales process hinges on an ability to weigh all 4 elements of the velocity equation, and then test to see how each is impacted.
Generally speaking, the more time sales reps are engaged in high value activities, the greater sales velocity will be. Leverage sales workflow automation whenever possible so reps stay focused on high-value sales activities, not repetitive tasks.
There are a lot of important metrics that sales teams measure.
The reality is that the ultimate goal is to maximize the efficiency of your revenue production.
Sales velocity provides such a formula.
As such, it's a fantastic lens by which to build and refine a sales process, and the workflows that make up each step. Sales teams need a plan to follow and resources and messaging to support them. Tweak your process to create value and pave the way to more and bigger opportunities closing. Just keep an eye on how long it takes you to do it.