What is Lead Velocity Rate (LVR)?

Lead Velocity Rate (LVR) is a sales SaaS metric that calculates the percentage growth in the number of qualified sales opportunities acquired each month.

By monitoring LVR, SaaS companies can monitor how much revenue can potentially be made in the upcoming periods and then adopt strategies relevant to sales. However, LVR should not be analyzed in isolation, as it is just one of the key performance indicators of a company’s sales activity.

A key indicator of the growth of qualified leads in your sales funnel month over month is the Lead Velocity Rate (LVR). Compared to focusing solely on revenue, it offers a more reliable and leading predictor of future revenue growth.

The following formula can be used to determine LVR:

LVR is calculated by dividing the difference between this month’s qualified leads and last month’s qualified leads by the number of qualified leads from the previous month. The result is then multiplied by 100.

Let’s dissect it using this example:

• This month’s qualified leads: 100 
• Last month’s eligible leads: 80 

LVR calculation: 

• Take the qualified leads from this month and subtract last month’s: 100 minus 80 equals 20. 
• Divide the outcome by the qualified leads from the previous month: 20 / 80 = 0.25 
• To express as a percentage, multiply by 100: 0.25 * 100 = 25%

Consequently, in this case, the LVR is 25%.

The monthly increase in qualified leads is monitored by the Lead Velocity Rate (LVR). Here is how you can make use of it:

• Estimated income: Future revenue is typically higher when LVR is higher. 
• Establish objectives: Try to surpass your sales targets with an LVR growth rate. 
• Sync up marketing and sales: Determine pipeline problems and improve advertising. 
• Make decisions based on data: For further in-depth insights, segment and regularly track LVR. 
• Take the initiative: Adapt tactics in response to seasonal variations and LVR trends.

For optimal outcomes, concentrate on reliable data and qualified leads.

Also, for a more holistic view of your sales, connect LVR with conversion rates and financial sales statistics. This provides quality measurements on the health of your entire sales pipeline and assists you in leadgeneratie and sales optimization efforts based on analytics.

It is vital that the lead qualification and lead scoring criteria be revisited after some time to maintain relevance to the ever-changing nature of the business environment and business strategies.

Using LVR, future sales volume can be estimated by determining the relationship between the amount of investment capital and sales that result.

More so, LVR extends to marketing, where it enables organizations to determine the amount of revenue earned from the dollars spent on promoting the business.

However, it is important to note that this ratio looks forward, but it has a limitation and provides an estimate of future sales revenue to some extent only.

Here are some ways you can improve LVR: 

• Refine targeting to attract more qualified leads and enhance lead qualification processes to ensure you’re focusing on the most promising prospects. 
• Be more proactive in areas like sales and marketing to perfect your strategy. For instance, analyze a database of all existing customers and establish common features that define the best ones to create marketing strategies to attract the same or more such consumers. 
• You could also develop a lead scoring system to prioritize your sales efforts on the most qualified leads. 

With the use of these strategies, you can capture more qualified leads quicker and more effectively, increasing your LVR and attaining your business objectives.