Hi community members,

I am trying to come up with actionable reports for our SaaS sales team. One metric I came across a few times (also in this Hubspot blog article) is sales velocity. It is usually calculated based on the number of opportunities, the win rate, the average deal size, and the average conversion time for a qualified lead.

The first three metrics define how much revenue a sales rep brings in a given time period. As an example, if someone gets 20 new opportunities per month, wins 25% of them and they have an average deal size of 1000 MRR ... this leads to 5000 new MRR per month.

My question: What does the sales velocity specifically measure, then? I realize that it's an efficiency metric, but I don't really know how to explain it to my team. If Tom has a sales velocity of 100 MRR and Lisa has a sales velocity of 150 MRR, what's the implication?

How can you use the sales velocity for forecasting? Does it make sense to align this with any kind of sales target?

Thanks in advance!

Best,

Jonathan