Your company is growing !! Awesome. But the key question to ask is – are you growing fast enough to take on a bigger market share? India is the second-biggest Fintech hub in the world with more than 2,000 companies operating currently in the ecosystem and the number of players will mushroom in the years to come.
Do you know? If a customer is applying for a loan on your website by filling up the form, it means he/she is parallely applying with at least 4 other competitors. Fintechs, particularly dealing in loans, money transfers, insurance are facing intense competition today.
In the Internet space, when the ecosystem gets heated up with a lot of players, Sales Volume alone is not enough, Sales Velocity is also critical for success.
To do that, you have to change the most crucial metric you use to measure your sales performance – the sales volume. It only tells you about the sales made within a stipulated period. It does not give you a holistic picture of the velocity of the leads converted or lost in the process. If you want to be the leading player in the fintech space, you need to know how your team converts the leads into sales and how quickly they do that.
That’s where sales velocity comes to play.
- What is sales velocity?
Time is money. Sales velocity measures exactly that. Unlike sales volume, sales velocity tells you how quickly your leads move through the sales pipeline. It tells you how fast your team has been able to close a deal. By measuring the sales velocity, you get a clear perspective on what’s working and what are the potential bottlenecks that your team faces while converting the leads into sales opportunities. These insights help in optimizing the sales process, so your team can make sales faster and bring in more revenue quickly.
- How to measure sales velocity?
To calculate the sales velocity, you must consider four variables: Once done, the QA team should start analysis of sample data sets and rate the interactions based on the agreed upon parameters and weightages.
- The number of opportunities(or deals): How many leads does your team have in a particular period.
- Deal size: It can either be the value of an average sale or in case of a subscription service, it could be the average customer lifetime value.
- Conversion rate: How many leads did your team convert within a stipulated time?
- Sales cycle length: How much time does it take for your prospect to move through the sales pipeline.
- Once you have the data for these variables, calculate the sales velocity in the following way:
Multiply the number of opportunities with deal size and conversion rate and divide the result by the sales cycle length.
The result that you get will tell you exactly how much revenue you generate each day. This will help you to identify the loopholes and close the gaps. Calculating sales velocity is not a one-off activity. You have to calculate it at regular intervals to sharpen and optimize your sales process continuously. It is an ongoing process.
How can reducing lead response time improve sales velocity?
While many factors can be improved to increase the sales velocity, the easiest one, to begin with, is the lead response time.
A study conducted by Drift reveals that only 7% of the surveyed companies have an average response time of 5 minutes and less and according to LeadConnect, 78% of the customers said that they buy from the first business that responds to their inquiry.
Put up the right technology and also spend time with your sales, inside sales and support teams to know how much time it takes for them to contact the leads when the lead fills in the form. If it takes more than five minutes for them to connect with the lead, there is a problem! You are losing out on a potential customer.
Need help in setting up a modern contact center to reduce lead response time and to improve sales velocity through customized modern contact center solutions? Contact us for a quick POC for measuring and improving your sales velocity.