Sales velocity variables

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Below are the four variables currently measured by your CRM that are used in the sales velocity formula:

number of possibilities;

average transaction cost;

Win/conversion ratio value;

sales cycle length.

To learn how to use each hong kong email list of these sales velocity variables to guide your organization's planning and goal setting, let's take a closer look at them:

Number of possibilities

There are always a certain number of opportunities in your organization's pipeline. You need to make sure that they are real. Profits can suffer if the sales funnel is clogged with invalid leads, and only a few have a chance to close.

Cost (average size) of a transaction

Each party must spend one of the most important resources on a transaction – time. You need to make sure that this indicator is used with maximum benefit for you and for the potential client. This is achieved by providing such offers and additions that will make their life easier, and will increase your average transaction cost and sales speed.

Sales velocity variables

Win/Conversion Rate

It shows the average percentage of wins, which should be directly proportional to the number of leads you generate. And correct and high-quality. To determine the percentage of wins, you need to divide the number of sales won by the total number of opportunities.

Sales cycle length (measured in months)

Cycle length is about making your sales process more efficient. This involves revising your sales plan and increasing your sales force from time to time. These strategies help shorten your average sales cycle and close more quality deals faster.

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Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
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Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer

9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals

How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers

Checklist of 12 main indicators for website promotion
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Example of calculating sales speed
It never happens on the market that all goods are sold at the same speed. Some things are always sold faster, and some products are delayed on the shelves or in the warehouse. A completely logical solution is to order a smaller order of slow-moving goods for the next month. But it can also happen that a smaller quantity is ordered, and it may not be enough. To avoid this, it is necessary to calculate the turnover rate of goods.

The most important thing to know about this parameter:

Inventory turnover determines how quickly inventory can be converted into revenue.

This indicator makes it possible to identify “weak” goods and optimize warehouse balances. To do this, you need to:

analyze product sales by periods – months, quarters, etc.;

compare the volume of sales of goods during this period with the average for a similar period;

compare products of the same category according to this characteristic, for example, chips with chips, cookies with cookies, beer with beer.

If the turnover rate deteriorates, you should analyze the reasons for this. For example, the goods may be misplaced, employees are not working conscientiously, the product is too expensive for your customers or is outdated.

The main factors influencing the parameter: suppliers, logistics, traffic, demand.

There are no specific standardized turnover indicators: they are individual for each region and business sector.

A good entrepreneur, a store owner always knows what from the product range sells like hot cakes and what doesn't. Therefore, he can plan a certain quantity of goods at a glance, knows what can be discounted so that stale products are sold out faster. But if the store's product range is impressive, then such planning can sometimes fail.

Large retailers regularly calculate the turnover of their products, track seasonal fluctuations in demand and other parameters. Small retail outlets can do the same, as a result they can free up warehouse space.

Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow
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Example of calculating the speed of sales of goods
We will study how to calculate the speed of product sales from the first report to the finished table using the example of a retail store.

Initial data:

Format: economy.

Traffic: 250 people/day.

Average daily revenue: 70,000 ₽.

After six months of work of the new calendar year, the senior seller made a report on groceries for the period. Looking at it, it becomes clear that the types of crackers are in different demand. Since their cost fluctuates from 40 to 50 rubles per pack, and they take up a lot of space on the shelves, the store owner decided to review the range of these products in order to understand what to refuse and what to buy in larger quantities.

It is necessary to calculate and analyze the turnover, which shows the speed of getting the product from the store warehouse into the hands of the consumer. The faster the product is sold, the sooner the money will return to the entrepreneur to purchase a new batch. This is the turnover of products. If sales of goods are going very badly, this means inefficient use of funds, since there are no free funds, the warehouse is full, and there is no revenue or profit.

The calculation of product turnover is carried out:

in days – how long the product is sold for;

in times – how many times per month the product turns over and repays the investment.

Below are the formulas for calculating the indicator:

Product turnover in times = Sales volume / Average inventory.

Inventory turnover in days = Average inventory * (Number of days / Sales volume).

Average inventory for the period = ((TI1 / 2) + TI2 + ... + (TIn / 2) / (n – 1),

Where:

ТЗ – average inventory for the period, rub.;

ТЗ1, ТЗ2, ... ТЗn – the amount of inventory on individual dates of the period, rubles;

n – the number of dates used in the calculation.

How to calculate the speed of sales of a product? To do this, you need to go through all the steps listed below.

Recommended articles on this topic:
Marketing Department KPI: 11 indicators and calculation example

How to get contacts from a client: the most effective methods

Sales Triggers That Have Never Failed.

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