Sales velocity is a metric typically used by sales leaders to understand the overall performance of their sales process. It’s a measure of productivity, i.e. amount of money being generated over time.
While sales velocity typically focuses on sales opportunities, full-funnel visibility with Bizible's Data Warehouse makes it possible to measure sales velocity for marketing qualified accounts.
It’s valuable when marketers can show their impact on two fundamental components of value: time and money. Marketing leaders who are investing in demand generation can now measure sales velocity over a larger part of the customer journey.
In this post we’ll show how to use our data warehouse to build a dashboard showing full-funnel sales velocity.
What is Sales Velocity? And Why Does It Matter To B2B Marketers?
With complete tracking of the customer journey, looking at velocity is a way to measure marketing performance in a consistent way. For example, it’s difficult to compare $50K in revenue in January with $60K in revenue in February. Sure, we generated more money in February, but the more important question is, how did we generate it?
We want to understanding why performance is the way it is in order to identify problems. In this scenario, although February performed well in terms of revenue generated, relying on this number alone masks important information which could affect future performance.
For example, February performance may have outpaced January but it could have been due to having one large deal come through, while win-rates declined, opportunity volume declined, and sales cycle length increased. All of which would be bad news for the sustainability of a business.
This is why we want a measure of performance that takes into account important factors like sales cycle length, win-rates, average deal size, and opportunity volume. When we can take these factors into account, we can better compare performance over time in a way that helps us see the greater context. This is why sales leaders use sales velocity and marketers should too.
Sales Velocity is measured as follows:
This is the typical way to measure sales velocity but in this article we’ll take a slightly different approach that’s more relevant to B2B marketers, focusing on marketing qualified accounts, and velocity between first-touch and deal closed.
How to Measure Sales Velocity As A B2B Marketer
While sales leaders who measure sales velocity typically are measuring bottom-funnel velocity, Bizible Data Warehouse offers the ability to look at full-funnel velocity, so we aren’t limited to opportunity win-rates.
Using Bizible’s Data Warehouse, you can create a dashboard that displays full-funnel sales velocity and the input variables used for sales velocity calculations, like sales cycle length, average deal size, win-rate, and lead volume. We update our data daily so you can monitor and report these metrics on demand.
You’ll want to decide on a few things before pulling your data.
What time period do you want to use? For example, will you measure average deal size over the last year, or the last quarter? Will you measure leads generated over the last month or quarter? Whichever you choose, it should be consistent.
Are you measuring marketing qualified accounts or opportunities?Because we are measuring full-funnel velocity, you can choose to look at marketing qualified accounts (not just opportunities). You should avoid measuring the number of leads, i.e. people, since people get rolled up into accounts and people don’t convert into customers, accounts do. You can measure lead velocity, or the velocity between first-touch and lead create touch, but that is beyond the scope of this article.
What time scale are you using to measure sales cycle? For example, in days, weeks or months? For simplicity, we’ll measure sales cycle in months. But again, having a data warehouse with your marketing data allows you to choose how you look at your data. If you are a marketing executive, you may care about larger time scales, such as annual rates.
As long as you stay consistent you can calculate velocity the way that is most relevant to you.
Using PowerBI To Generate Full-Funnel Sales Velocity Data
You’ll want to connect PowerBI to your data warehouse. We use PowerBI for this example, but the same principles should apply if you are using a different business intelligence tool.
Pull in several tables required to calculate win-rate, average deal size and etc. Pull in the leads table (called biz_leads) and the opportunities table (called biz_opportunities).
To calculate marketing qualified account (MQA) win-rate, use Edit Query to combine the biz_leads and biz_opportunities table, matching by Account ID. Account ID is essentially the account name. It’s an index or unique ID variable.
Next, you’ll use a date filter to filter for only accounts generated within your chosen time frame. Then you’ll filter further, choosing accounts that are either closed won or closed lost, and filtering out accounts that are actively in the selling process.
You’ll arrive at your MQA win-rate by visualizing the percentage of closed-won accounts to closed-lost accounts in your chosen time period.
Average Deal Size
Let’s move to average deal size. The biz_opportunities table has all the information you need. Each opportunity has a deal size amount and a close-won date. Filter based on the time period you’ve chosen, group by deal size amount, and then find the average deal size in the visualization menu.
You’ll be able to see how many customers pay you how much in ARR. You can take the average of this and you have your average deal size.
Sales Cycle Length
Let’s move on to sales cycle length. Here, our objective is to hone in on touchpoint dates. We want to look at first-touch and the closed-touch. The first-touch refers to the first anonymous touch or point of brand discovery. The close-touch is the last touchpoint before the account/opportunity became closed. We want to filter for (select) closed-touch where the deal was won.
To get this touchpoints data we pull in the biz_attribution_touchpoints table and merge it with biz_opportunities table. We do this because we want to select close-won touchpoints, and this information on whether an account is closed won or not is stored in the biz_opportunities table, under the variable: Stage. This is how our current database schema is defined.
After gathering closed-won touchpoint date and first-touch date, we can created a Calculated Column that counts the number of days, or months, between these touchpoint dates for each account. You take the average of this and you have your average sales cycle length.
Lead Volume or Marketing Qualified Accounts
The last variable we need is “lead” volume, i.e. the number of marketing qualified accounts generated over our chosen time period. We do this using the biz_opportunities table, which has information on what stage in the sales cycle an account is in, including accounts that are qualified and don’t have opportunities yet. With this table we filter/select accounts that are in the earliest stage of the selling process. We call this stage “Qualified-Discovery” but your organization may call it something else. Nonetheless, you will select these accounts and you will have your current MQA volume.
Note that you will need to report this monthly since accounts are dynamic, moving through different stages. Bizible Data Warehouse creates timestamps for when leads get converted, so you may be able to limit your query to only accounts that converted during a certain month, but this is beyond the scope of this article.
If you are interested in total accounts, ones that have not been qualified yet, you can use the biz_leads table.
Now you have everything you need to calculate sales velocity. Create a new calculated column to calculate sales velocity. After generating these metrics, your dashboard should look like this.
The great part of working in Tableau, Domo, or PowerBI (along with Bizible data) is that you can monitor these metrics and see how marketing actions are translating into measurable improvements.
While you may be interested in the velocity of the entire funnel, having a data warehouse for your marketing data creates a lot of options around reporting different metrics. Once you have the process down, you can start looking at sales velocity by segment, geographic region, or product line. You can use different filters for time periods, or examine velocity between different touchpoints or stages (e.g. first-touch to lead-create touch). You can examine velocity for accounts and opportunities that were included in a specific marketing campaign. There’s a lot you can do here.
Sales velocity is a useful metric because it captures trending information around time and money, two basic but fundamental measures of performance. Are you generating business faster by decreasing the sales cycle? Are you generating more business while maintaining a good win-rate and short sales cycle? These are questions that get answered with full-funnel sales velocity.
It’s tremendously helpful when marketers can correlate the output of their activity to the speed of revenue generation, the amount of revenue generated, or both. Bizible’s Data Warehouse helps you do just that.