This is the first post in a 3-part series about funnel velocity.
These days’ marketers are really good about measuring a lot of things. Most marketers could tell you their CPA (cost per acquisition) or CPL (cost per lead), their MQL (market qualified lead) conversion rate and a whole host of other metrics. However, very seldom do I hear about funnel velocity (how quickly you can turn an inquiry into a customer).
Velocity can have the greatest direct impact on closed deals. Consider the data reported in 2013 by Yahoo Small Business Advisor: t contacting a lead within five minutes yields a 78 percent close rate, compared with a 19 percent close rate when the response to a lead is within 5 to 30 minutes. Further, a pipeline moving 2x as fast can be 1/2 the value of a comparable pipeline. The essence is simple – move deals as fast as you can through the sales pipeline. Time is the enemy of every sale.
While understanding the average sales cycle is an important part of velocity, you cannot impact velocity without also understanding the break points that lead to your average sales cycle. Consider the basic lead flow:
As you can see there are 5 levers available that will impact velocity. I can tweak anyone of those breakpoints to increase my velocity. How many break points does your organization have? Further, by measuring these break points you can also see where your leads are getting hung up. Mapping out a process like the above is an important first step in understanding your organization's velocity.
In tomorrow's post, I will talk about some of the things you can do to increase velocity at each point.