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Over the last ten weeks, we've built the whole picture: how to set a marketing goal, how to choose a channel, how to map the funnel, and how to track metrics from awareness all the way through to closed-lost data. This week, we're putting it all together into a single number.
That number is pipeline velocity. It's the closest thing to a north star metric that a startup marketer or founder can have.
LET’S GO →
What Pipeline Velocity Tells You
What Pipeline Velocity Tells You
Pipeline velocity measures how much revenue your pipeline generates per day. The formula is:
Pipeline Velocity = (Number of Leads x Win Rate % x Average Deal Size) / Sales Cycle Length in Days
What makes this formula useful isn't the number itself–it's what happens when you change any of the inputs. If you double your lead volume and nothing else changes, velocity doubles. If you cut your sales cycle in half, velocity doubles. If you improve your win rate from 20% to 30%, velocity jumps by 50%.
Every marketing activity you run should be traceable to one of these four levers. If it isn't, it's worth asking whether it belongs in the plan at all.
How to Use It Week to Week
I recommend calculating your pipeline velocity once a month. I like tracking it in a simple spreadsheet alongside each of the four inputs. When velocity drops, look at which input changed, and you’ll find where the problem is. When velocity rises, look at which input improved—that's what you should be doing more of.
It won't always be obvious at first. But after three months of tracking, the patterns typically become unmistakable.
Continuing Education
Everything we read and loved this week.
Action of the Week
Calculate your current pipeline velocity using the formula above. If you don't have all four inputs yet, use your best estimates. An approximate velocity is more useful than no velocity, because it gives you a baseline to improve upon.
Until next time!
