As marketers the job entails doing more of something less expensively and faster than it could be done by merely putting more “feet on the street.” Faster is the basis behind incorporating the concept of velocity into your your Marketing measures and metrics. Velocity is defined as the time rate of linear motion in a given direction. There are several ways to apply the concept of measuring velocity in your Marketing.

Two Ways You Can Use Velocity

Measure Velocity, metrics — Measure Velocity

There are two customer-centric ways to apply velocity as a measure for your Marketing. First, you can use the notion to understand the speed with which customers are moving towards incrementally profitable or unprofitable behaviors. Second, you can employ velocity in reference to the buying pipeline. Let’s quickly explore both of these.

Customer Velocity. To use customer velocity you will need a customer segmentation approach. Most customer segmentation approaches place customers into one of several segments based on how they score on four dimensions: current value, potential value, attrition risk and segment mobility. Once you have segmented your customers you can add velocity to your segmentation model. The allows you to monitor which customers are moving in a positive or negative direction and the rate of change- slowly or quickly on against the four dimensions.

Applying velocity allows you to distinguish between those customers trending toward risk slowly versus quickly. This metric can be especially important for companies who have frequent repurchase cycles, such as in the publishing and maintenance/repair industries. Add velocity to your customer segmentation model to monitor your high value customers. This allows you to develop processes that address each of these four dimension and offset defection. Additionally customer velocity helps with deciding how much should be invested in that specific customer. More profitable and valuable customers warrant additional investment.

Pipeline Velocity. Pipeline Velocity measures the rate of change within your pipeline both in speed and direction. Four elements are used to calculate pipeline velocity:

Pipeline Volume
Sales cycle movement
Length of the sales cycle
Average dollars/sale

By taking these four variables, sometimes metrics in and of themselves, and summing them into a single number, you can assess whether your sales are accelerating, decelerating, or remaining status quo.

Want a more sophisticated measure of Pipeline Velocity? Consider weaving these into your algorithm.

Annual Revenue Goal ($)
Avg. Length of Sale (days)
ales Stage Probability (%)
Opportunities per Stage (#)
Sales Booked To Date ($)
Stage Conversions Made (#)
Months Remaining In Fiscal Year

Pipeline velocity requires a formal process for tracking the number of opportunities and conversion rates.

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FAQ:

Q1: What is velocity in the context of Marketing metrics?
A: Velocity measures the speed and direction of customer or pipeline movement toward profitable or unprofitable behaviors. It reflects how quickly changes occur, enabling more dynamic and timely management decisions.

Q2: How can customer velocity be applied?
A: By integrating velocity into customer segmentation models—based on current value, potential value, attrition risk, and segment mobility—you can monitor how fast customers move toward risk or opportunity, allowing tailored investment and retention strategies.

Q3: Why is customer velocity important?
A: It differentiates customers trending toward defection slowly versus rapidly, critical for businesses with frequent repurchase cycles. This insight helps prioritize resources toward high-value, high-velocity customers to maximize profitability and reduce churn.

Q4: What is pipeline velocity and how is it measured?
A: Pipeline velocity quantifies the rate of change in your sales pipeline—considering volume, sales cycle movement, cycle length, and average deal size—to assess whether sales are accelerating, decelerating, or stable.

Q5: What advanced factors can refine pipeline velocity measurement?
A: Incorporate variables such as annual revenue goals, average sales length, stage probabilities, opportunities per stage, booked sales to date, stage conversions, and remaining fiscal months for a more sophisticated and predictive pipeline velocity model.

Q6: What operational processes support effective pipeline velocity tracking?
A: Establish formal tracking of opportunity counts and conversion rates at each sales stage to ensure accurate velocity calculations and actionable insights.

Q7: How does using velocity metrics improve Marketing and Sales performance?
A: Velocity metrics enable proactive management of customer risk and sales momentum, optimizing resource allocation, accelerating revenue growth, and improving forecasting accuracy.

Q8: Where can I get expert help to implement velocity metrics?
A: VisionEdge Marketing provides advisory services to integrate velocity into customer segmentation and pipeline management, enhancing your Marketing and Sales effectiveness.