What is lead velocity rate?
Lead velocity rate is a metric that measures the real-time growth in the number of qualified leads generated by your business month over month.
How to calculate lead velocity rate?
To calculate the lead velocity rate, first, subtract the ‘number of previous month’s qualified leads’ from the ‘current month’s qualified leads’. Then, divide this number by the ‘number of previous month’s qualified leads’ and multiply by 100.
Formula for calculating lead velocity rate
Real-life example of lead velocity rate
Let’s assume your business had 216 qualified leads last month. In the current month, your business has 250 qualified leads in your pipeline.
Then, your lead velocity rate will be: (250 - 216) / 216 x 100 = 15.7%
What’s an average lead velocity rate? (benchmark)
There’s no set benchmark for lead velocity rate. LVR can be affected by seasonality, type of product, target market, and many more elements. While a high lead velocity rate is undoubtedly a positive signal but it doesn’t convey how many of those leads will ultimately be converted to paying customers for your company.
So, it’s suggested to begin with your MRR Growth Rate target and then calculate how many qualified leads you’ll need in order to achieve that revenue.
Tom Tunguz, Partner at Redpoint Ventures, says:
“Does the company have 6x+ the amount of pipeline to their bookings plan (target revenue)? If so, you can be confident they will achieve the next period’s plan.”
Ways to improve your lead velocity rate
- Brush up your follow-up strategy: By having a good follow-up strategy in place, you can maintain a dependable base of leads. Make sure you nurture the leads you have right now, or else your LVR will suffer. Read: 36 Practical Tips for Writing A Great Sales Follow-Up Email
- Level up your lead nurturing strategy: If your leads start to leak from your pipeline, your LVR will start dropping too. You need to implement a strong lead nurturing strategy using various channels to keep your LVR growing every month.
- Leave no room for objections and concerns: If you want to close deals faster, you’ll need to address your prospect's objections and concerns before they even pop. You can schedule a call or meeting with them to ensure everything’s sorted right away. User-generated content is also a great way to convince your prospects.