This tool helps businesses understand the rate at which they generate revenue. It combines key metrics the number of opportunities, their average deal value, the win rate, and the length of the sales cycle to provide a snapshot of sales performance. For example, a business with 100 opportunities, an average deal size of $10,000, a 20% win rate, and a 90-day sales cycle would have a specific velocity calculated using these figures.
Analyzing this metric offers valuable insights into sales pipeline health and overall revenue generation efficiency. Tracking this figure over time helps identify trends, bottlenecks, and areas for improvement. Historically, revenue forecasting relied on simpler methods, but the increasing complexity of sales processes led to the development of more sophisticated tools like this one, allowing for data-driven decision-making and strategic resource allocation.