What it means
Pipeline velocity measures how fast revenue moves through your sales pipeline, usually as revenue per day. The standard formula multiplies the number of qualified opportunities by the win rate and the average deal size. It then divides the result by the length of the sales cycle in days.
Raising any of the top three, or shortening the cycle, raises velocity. The formula is useful because it shows which lever is weakest. A team with plenty of opportunities but a long cycle has a different problem from one with a short cycle and too few deals. It is often worked out per segment, since one blended number hides the differences.
How we use it
Velocity is only as good as the dates behind it. That is why stage timestamps are one of the five build steps in every CRM we set up. Without them, cycle length is a guess and so is the formula.
With them, you can see how long each stage takes and where deals stall.