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The B2B SaaS CEO’s and CFO’s primary mission is stakeholder value, which immediately translates to financial performance and revenue growth. Gaining the confidence of the Board and shareholders requires managing their company with control and predictability – simply put, they need to set strong growth goals and hit them consistently.

We often hear about the challenge of forecast accuracy, but managing quarterly results is actually reasonably straight forward for a seasoned CRO. Getting to annual projections and year-over-year growth planning is a different beast. Sales velocity underpins a mature revenue operations (RevOps) function, which supports and impacts longer-term revenue growth and resource optimization (which translates to margin). Sales velocity matters because it is a great predictor of future performance, and, if managed well, allows the CEO and CFO to make strategic decisions that can change outcomes.

Sales velocity is the measure of how fast deals are moving through your pipeline. It tells us much more than whether we’re on track to meet quarterly forecasts. It provides CEOs and CFOs with a powerful window into the effectiveness of the entire revenue engine and enables them to manage revenue growth as a predictable, measurable process.

What is Sales Velocity?

Simply put, sales velocity is how many dollars the company should expect from sales per day (or per period) given their current pipeline performance. Sales velocity is calculated by four critical factors:

1. Number of Opportunities: How many active opportunities are progressing through the pipeline.
2. Average Deal Size: The average revenue (or annual contract value) amount per deal.
3. Sales Stage Conversion Rates: The percentage of deals progressing from one stage to the next.
4. Sales Stage Length: The time it takes to move from one sales stage to the next

Often you will see Sales Stage Conversion Rates as “Win Rate” and Sales Stage Length as “Sales Cycle Length.” These are simply aggregate metrics across all the sales stages. Mature RevOps models achieve greater accuracy by using more detailed data. But CRMs struggle to provide precise measures across stages, especially with conversion rates.

The formula is: (# of Opps in pipeline)*(average deal size)*(total conversion rate)/(total length of sales cycle). Often this is calculated by Revenue Stream, or type of opportunity. Calculation may use last-12-months metrics to account for seasonality.

At first glance, these may seem like straightforward metrics. But when analyzed together, they reveal deeper insights into how quickly (or slowly) the company is converting leads into revenue. For CEOs and CFOs, understanding this pace is crucial to setting realistic growth targets and making proactive adjustments that directly impact revenue predictability.

Moving Beyond Forecast Accuracy to True Growth Predictability

Traditional forecasts are often too rigid to account for the full spectrum of factors influencing growth. They may tell us what’s likely to happen if all conditions remain the same but rarely account for the levers within our control that can change outcomes.

Sales velocity, when used in combination with RevOps models, reveals where these levers lie.

• If a sales stage length is significantly over the RevOps model target, it signals inefficiencies in this part of the sales process. Delays in earlier stages suggest inspecting your qualification criteria, as well as your process for sales follow up on new opportunities.
• If a sales stage conversion rate is low, it signals either a misalignment between the product/value proposition and market need or a requirement for better sales training and enablement.
• If deal sizes are shrinking, it might signal pricing pressures or a change in buyer expectations, indicating a need for more tailored pricing strategies.

By monitoring changes in sales velocity, CEOs and CFOs can identify exactly where to focus their efforts—on accelerating sales stage duration, improving conversion rates, or boosting average deal sizes—directly impacting growth outcomes.

In my experience, I’ve often heard a CEO say something like, “I see that our lead generation is ramping up, but I’m not seeing more deals closing. I don’t know where we are falling down in the sales process.” This question can only be answered by having granular sales velocity data.

An actual dramatic example I’ve seen at ayeQ was with a customer where we turned on our RevOps models and analytics; which revealed that their proposal stage conversion rate was 35%. This was halfway through their sales process – so they were taking a huge hit on sales productivity when 65% of their deals were falling out after a lot of sales efforts in early stages.

The CEO had no idea that they were struggling in the proposal stage. He focused a tiger team on the issue and found errors in their pricing calculations. Within a quarter, they had improved their proposal stage conversion rate by 20 points. This is the power of sales velocity visibility.

The Impact of Sales Velocity and RevOps Models on Strategic Growth

Once CEOs and CFOs are aligned on sales velocity as a core metric, they can work to optimize it continuously. This transforms growth from a reactive, forecast-dependent measure to a proactive, controllable one. Here are the typical areas of impact:

1. Predictability and Revenue Stability: Sales velocity helps leaders understand the pace at which revenue is likely to materialize. Instead of simply looking at periodic forecasts, it allows CEOs and CFOs to manage the consistency of revenue streams, leading to more reliable cash flow and financial planning.
2. Resource Optimization: For a CEO or CFO, knowing where sales are slowing down or accelerating means they can allocate resources more effectively. This might mean adjusting budgets for marketing, realigning sales team efforts, or identifying potential bottlenecks in the sales process.
3. Target Setting and Growth Management: Sales velocity provides a way to gauge what’s achievable within a specific time frame, helping leadership set realistic, data-backed growth targets. It clarifies how many opportunities need to be generated, the ideal sales cycle, and the expected win rate to meet revenue goals, allowing for more informed and accurate goal setting.
4. Early Warning Signals: CEOs and CFOs need early indicators to make proactive adjustments. Sales velocity can reveal trends—such as slowing deal cycles or decreasing win rates—early enough to address issues before they affect revenue.
5. Value Creation and Investor Confidence: Investors prioritize predictable, scalable growth. By monitoring and improving sales velocity, B2B SaaS CEOs and CFOs can demonstrate to investors that they’re actively managing revenue growth in a controlled, efficient manner.

Making Sales Velocity a Part of Your Growth DNA

For B2B SaaS CEOs and CFOs, embedding sales velocity into growth strategy is about more than just improving numbers—it’s about making growth predictable, scalable, and resilient. In today’s fast-paced SaaS market, companies that merely focus on forecast accuracy are only halfway there. By leveraging sales velocity, CEOs and CFOs can transform how they view, drive, and predict revenue.

Find out how to model and optimize sales velocity from the experts. Schedule a complimentary consultation.