What Is Funnel Velocity?

What Is Funnel Velocity?
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What is funnel velocity? Funnel velocity is the rate at which an individual moves through the marketing funnel, from awareness (top of funnel) to action (bottom of funnel). Understanding funnel velocity helps solidify what content might be effective along the customer’s journey, while pinpointing areas of improvement.

From a physics standpoint, one of the more common reasons for measuring velocity is to determine how quickly anything in motion arrives at a destination (point B) from the starting line (point A).

And, from a marketing standpoint, applying velocity to the marketing or sales funnel does the same thing. Funnel velocity is the rate of speed at which people move from point A (product or service awareness) to point B (product or service specific action).

Specifically, the analysis takes into account the time it takes to move prospects from:

  • Cold leads (a large group of people); to
  • Hot leads (a closer-to-action group); to
  • Final action (clicking a link, downloading, or purchase)

Funnel velocity variables

The basic funnel velocity formula is as follows:

(Number of Opportunities) x (Average Deal Size/Cost) x (Conversion Rate) ÷ (Sales Cycle Length)

In which the:

  • Number of opportunities is defined as how many leads enter that funnel
  • Average deal size represents a specific metric, such as a dollar value or customer lifetime value figure
  • Conversion rate denotes how many leads turn into paying customers, over a certain period of time
  • Sales cycle length specifies how much time (days, weeks or months) it takes for prospects to move through the sales process.

Why funnel velocity is important

Even if physics isn’t your strong suit, understanding funnel velocity is important for the following reasons:

  • It can boost conversion rates, by pinpointing bottlenecks and challenges.
  • It can help you develop a content plan to move prospects more quickly through the funnel.
What is funnel velocity? Learn why the rate of speed at which a prospect becomes a hot lead, and then a full-blown customer, is important to your #content and #marketing efforts. Click To Tweet

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About the author

Amy Sorter

Amy Sorter is an award-winning journalist, copywriter, and principal of The WordSorters. Her work has been published in regional and national business and consumer publications. Amy's focus is on creating customized, highly engageable content in a variety of formats for non-profit organizations, small businesses, and Fortune 500 companies.