Sales and marketing team alignment is key to closing deals faster.
This is a well-established fact through tried and tested methods.
However, let’s consider this scenario:
- First Month: Aligned teams closed ten deals in 30 days.
Approach: They tracked KPIs, such as customer acquisition cost, lifetime value, average revenue per user, etc, to optimize their strategies at every stage.
- Second Month: They closed the same ten deals in just 20 days.
Approach: Besides the common KPIs, they used a lesser-known yet crucial metric to monitor and improve the overall health of the pipeline: pipeline velocity.
This highlights that closing deals takes more than just sales and marketing alignment and tracking basic metrics.
Tracking pipeline velocity should be your key point of focus.
In this post, we will share everything you must know about pipeline velocity for B2B SaaS.
What Is Pipeline Velocity?
Pipeline velocity is the speed at which deals move through the pipeline from initial contact to closed-won or closed-lost.
This is a crucial metric for B2B SaaS to evaluate how quickly leads are converted into customers or lost opportunities with precision.
Here’s how to calculate the pipeline velocity -
Where:
- Opportunities: Number of potential deals in the pipeline
- Average Deal Size: Average value of a closed deal. You can calculate it by analyzing the total revenue generated from closed deals and dividing it by the number of closed deals.
- Average Win Rate: Average percentage of opportunities your team successfully converts into closed deals.
- Length of Average Sales Cycle (in days): Average time for a deal to progress from initial contact to closing.
Let’s say you want to calculate the pipeline velocity for your company using the below-shared data.
- Opportunities: 100
- Average Deal Size: $10,000
- Average Win Rate: 30%
- Length of Average Sales Cycle: 60 days
Pipeline Velocity = (100 opportunities x $10,000 average deal size x 0.30 average win rate) ÷ 60 days
Pipeline Velocity = ($300,000) ÷ 60 days
Pipeline Velocity = $5,000 per day
This reflects, on average, that your B2B firm is generating $5,000 in revenue per day from closed deals.
Key Thing to Notice: For a good pipeline velocity, you’ll need to -
- Increase the number of opportunities.
- Increase average deal size.
- Increase win rate.
- Decrease the length of the sales cycle.
Why Is It Important?
Pipeline velocity offers insights into the efficiency and effectiveness of the marketing and sales process.
High pipeline velocity reflects the efficient flow of leads in the pipeline. On the other hand, low pipeline velocity suggests inefficiencies in the marketing and sales process that need to be addressed.
Tracking this metric helps analyze where deals get stuck while moving through the pipeline, which, in turn, can empower teams to streamline their strategy.
The longer it takes to close a deal, the greater the risk of losing your business to a competitor.
Hence, teams must monitor it to achieve high conversions and increased revenue.
Top Factors Influencing Pipeline Velocity
Here are the top factors that influence pipeline velocity.
1. Lead Quality
Lead quality allows you to gauge whether or not a lead might have the potential to become a paying customer and how likely they are to buy your SaaS product.
So, this is one of the most critical factors that can affect the value of your pipeline velocity.
Likely, most of the leads won’t be active buyers. So, if you fail to take the right approach, you could end up focusing on poor-quality leads. This will waste your team’s time, effort, and resources, slowing the sales cycle.
On the other hand, making efforts to convert high-quality leads can shorten the sales cycle and result in improved revenue.
2. Sales and Marketing Team Alignment
Marketing and sales departments working in silos can lead to inefficiencies in the process that hamper pipeline velocity.
For instance, if your marketing team launches a targeted campaign to generate leads, but sales isn’t aware of the campaign or doesn’t prioritize contacting those leads, it can lead to missed opportunities. This can decrease pipeline velocity.
This reflects seamless collaboration equals efficient pipeline flow.
So, ensure your marketing and sales teams are aligned well.
3. Sales Cycle Length
It refers to the time between the initial contact with a prospect and the deal closure.
Understanding sales cycle duration allows you to generate sales projections based on the leads in your pipeline. This can help you forecast future revenue and improve your overall marketing and sales strategy.
A lengthy sales cycle thus depicts a decrease in pipeline velocity, while a short cycle indicates an increase in pipeline velocity.
4. Deal Value
It refers to a SaaS product or service’s perceived quality and benefit rather than the price.
The focus is on what the salesperson and the customer get from the deal. Simply put, it reflects your SaaS product’s ability to address the target audience’s challenges and fulfill their requirements.
Deals with higher values typically require a longer duration to finalize because of the complexity of negotiations, the involvement of multiple stakeholders, and the need for additional time. This slows down the progression of deals through the pipeline, leading to poor pipeline velocity.
On the other hand, deals with lower values tend to close quickly, thereby leading to a high pipeline velocity.
However, focusing on low-value deals can increase churn and reduce your SaaS revenue in the long run. So, maintain a balance between high-value and low-value deals to optimize pipeline velocity and achieve a robust revenue stream.
5. Win Rate
It reflects the percentage of deals won from the deals pursued.
A higher win rate means the team closes deals more efficiently, leading to a higher pipeline velocity.
On the other hand, a lower win rate depicts that the team is struggling to close deals. This can occur due to distinct factors like poor lead generation, misaligned sales and marketing teams, and others.
However, improving lead quality can lead to high win rates and pipeline velocity.
Best Strategies to Accelerate Pipeline Velocity
Let’s understand the best strategies to accelerate pipeline velocity.
#1: Ungated High-Value Content
Improving the quality of leads you generate is crucial to enhancing pipeline velocity.
Creating high-quality ungated content is the best way to do it.
However, most companies don’t pay attention and share average-quality pieces of gated content, forcing users to fill out forms to access the material.
While this approach might benefit the readers, it has no value for the target audience.
As a result, companies lose their prospects to competitors in the long term.
On the other hand, ungated content might decrease your lead volume, but it will increase the lead quality. This eventually can help generate revenue.
Notice how Revlitix offers freely accessible, high-quality content to its target market without requiring them to provide personal information.
No wonder, it has become one of the fastest-growing B2B SaaS companies internationally.
#2: Guided Demos to Reduce Sales Cycle Length
Guided demos allow your target audience to understand your SaaS product better. An interactive guided demo helps them analyze the value you bring to them in a personalized manner.
Producing guided demos thus speeds up the sales cycle and enhances your pipeline velocity.
Observe how our B2B SaaS company, Revlitix, leverages this approach to generate leads and close more deals.
We set clear expectations beforehand by sharing our agenda like this-
- 5 Min - Who We Are
The journey and the problem we are passionate about solving.
- 10 Min - Understanding You and Your Business
Understand what you do, your main pain points, and what it takes to get where you want to be.
- 20 Min - Product Walkthrough
See how we can solve your problems and help you reach your goals faster.
- 10 Min - Next Steps
Share success stories and discuss pricing and next steps.
This approach has helped us increase pipeline velocity and achieve high revenue for our B2B SaaS business.
#3: Minimize Data Silos
Data silos increase the chances of inaccuracies in the data, which can slow down your pipeline velocity.
So, ensure your marketing, sales, and product development teams can access accurate data. This can improve collaboration and help the teams gain a holistic view of the lead’s pain points and intent.
Implementing a centralized dashboard can save your hassles and eliminate data silos. Lesser the data silos, more the pipeline velocity.
#4: Leverage Retargeting
Retargeting ads can attract leads who have previously engaged with your content or are in your customer database.
Leveraging retargeting ads can help you tailor your marketing and sales messages to individual preferences.
This ensures that prospects understand how your SaaS product addresses their challenges and pain points and thus increases pipeline velocity.
#5: Streamlining Marketing and Sales Processes
Ensure a seamless coordination between your marketing and sales teams.
For this, establish standardized criteria for leads that you pass from marketing to sales. This ensures that sales reps focus their efforts on marketing qualified leads or MQLs with the highest likelihood of conversion.
Besides, leverage marketing automation tools to automate repetitive tasks like email campaigns, lead scoring, and nurturing workflows. Moreover, integrate your customer relationship management (CRM) system with your marketing platforms to ensure seamless data flow between teams.
This allows your teams to track leads, identify bottlenecks and inefficiencies, and improve lead management for maximum effectiveness.
Key Performance Indicators (KPIs) Affecting the Pipeline Velocity
Here are the KPIs that can affect the pipeline velocity. Monitoring these KPIs and creating the right strategies can help improve pipeline velocity.
How Can Revlitix Help Monitor and Improve Pipeline Velocity?
Our AI and ML-powered platform, Revlitix, offers state-of-the-art features that ensure your marketing and sales efforts are finely tuned. This can help improve your pipeline velocity and revenue in the long term.
Here’s what Revlitix offers -
- Real-time Pipeline Monitoring
Revitix Pipelines offers real-time pipeline monitoring, allowing you to track the progress of leads through every stage of the sales funnel. It provides 360-degree visibility into your prospect’s status, helping you identify bottlenecks in the pipeline.
Further, you can promptly act and address issues to keep deals moving forward.
What’s more? It offers predictive analytics capabilities that help forecast future pipeline performance based on historical data and market trends. It empowers you to identify emerging opportunities and predict leads most likely to convert.
This can enable you to optimize your marketing and sales strategies, allocate resources more effectively, and prioritize high-value opportunities.
The outcome? High pipeline velocity.
- KPI Signals and Automated Audits
Revitix Alerts send AI signals to help you identify pipeline leaks and fill gaps.
Besides, this feature can help streamline your marketing and sales processes. Its automated workflows eliminate manual tasks and streamline repetitive processes, such as lead scoring, email nurturing, and task assignments.
This can reduce administrative overhead, allowing your teams to focus on crucial tasks.
Efficient workflows mean fewer delays and improved response times that can keep your prospects moving smoothly through the pipeline.
- Integrated Reporting
Revitix Reports provides integrated reporting capabilities that compile data across your marketing and sales channels into a unified dashboard.
This centralized reporting feature gives you comprehensive visibility into pipeline performance, conversion metrics, and revenue attribution.
Leveraging these insights can help identify opportunities and underperforming segments, thus accelerating data-driven decisions to optimize your pipeline for maximum efficiency and effectiveness.
Connect with team Revlitix for a free demo today!
Conclusion
Pipeline velocity can significantly impact your B2B SaaS business’s efficiency and revenue.
Optimizing this crucial metric can help analyze where deals get stuck while moving through the pipeline. This can help you identify and address inefficiencies and streamline your marketing and sales strategy.
Moreover, leveraging Revlitix can speed up your pipeline and streamline processes to close deals.
The result? High pipeline velocity, shorter sales cycle, and improved revenue.
So, connect with Team Revlitix today to optimize pipeline velocity for your B2B SaaS!
