# What is the Sales Velocity Equation and How can You Use It to Drive More Sales Today?

In the briefest of terms, sales velocity represents how fast you are able to sell your product and how much you sell in that period. A much more in-depth way to understand sales velocity and to get an idea of how it can benefit your business directly is to examine the sales velocity equation.

## What is the sales velocity equation?

The sales velocity equation is this:

Sales Velocity = (# x \$ x %) / L

# = Number of sale opportunities (leads)

\$ = Individual deal value

% = Win rate

L = Length of your sales cycle

Your sales velocity is a function of the number of leads you have to sell to, the value of a closed deal, the percentage of deals you win, all divided by the length of time it takes to close a deal. In the grand scheme of most businesses, this formula can be applied to create a very simple calculation of your sales velocity and the general strength of the sales funnel in your business. It can then be used to quickly get an idea of what you should improve upon and, if by improving certain things, how much your business velocity is expected to increase.

From the equation, there are four straightforward ways to increase your sales velocity: get more leads, increase the value of the deals you close, win more deals and decrease the length of the sales cycle. In very straightforward maths, if you increase the first three of those by 10% each and then decrease the fourth by 10%, you will increase your sales velocity by almost 48%:

Taking a base rate of one for each component and then increasing/decreasing by 0.1:

Velocity = (1.1×1.1×1.1)/0.9

Velocity = 1.47888888

This represents roughly a 48% increase in your sales velocity by merely improving each factor by just 10%.