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Quantifying your sales process is valuable for your team - from salespeople to leadership. Putting a number to how quickly you transact helps you identify clearly what is and isn’t working in your sales funnel.
One such metric is sales velocity. Sales velocity indicates how fast your team is closing deals. Sales velocity measures how quickly you move, and it highlights why using digital-first contracting solutions built for speed, like text messages, could revolutionize the way your sales organization works.
The formula for sales velocity is simple: multiply your average deal size by the number of qualified opportunities you have and the win rate of those opportunities. Then, divide that number by the length of your sales cycle in days and you get sales velocity per day.
Keeping tabs on your sales velocity can help you pinpoint the rate of your growth and diagnose the health of your pipeline. It can also assist in forecasting future revenue, which can allow you to make adjustments to your sales strategy.
One of the best ways to improve your sales velocity is to shrink the length of your sales cycle. While changing your average deal size, number of qualified opportunities, and win rate on those opportunities can also affect your sales velocity, shrinking the length of your sales cycle can be done with the right set of digital tools.
Using traditional contracting methods can gum up the wheels of an otherwise smooth sales process. However, when using innovative, digital-first contracting, deals can be processed and finalized with a few clicks of a button. Why not use SMS messages for your contracting?
The short answer is yes. The longer answer is yes, as long as you know what you’re doing.
SMS contracting works under the same protections as other contracting processes like clickwrap. Under the ESIGN Act of 2000, digital contracts are legally just as binding as pen-and-paper contracts, but they must meet a certain set of criteria. They must provide a clear method of assent (such as typing “I agree” or checking a box) and actual notice (such as a link to the terms and agreements).
Related: Accept Contracts With SMS
For example, in 2016, St. John’s Holdings, while buying a real estate property from Two Electronics in Massachusetts, received a text message from Two Electronics containing a Letter of Intent (LOI). That text clearly stated the terms of the contract and the names of the brokers who conducted the transaction. St. John’s signed the contract and cut the check, only for Two Electronics to refuse to honor the agreement.
The Massachusetts Land Court ruled that the documents in the text message and the LOI were enough to satisfy the writing requirement of the Statute of Frauds. In doing so, it set a precedent that a text message is every bit as binding as any other kind of digital contract.
Related: Is A Text Message A Legal Document?
Using text messages to deliver contracts can have a drastic effect on the efficiency of your organization.
Text messages connect you to your customer directly. Viber reports that 95% of all text messages will be read within 3 minutes of being delivered. Compared to an email, that’s a lightning-quick response.
This comes especially in handy when your customers are on the go. If your customers work in industries that do not keep them chained to a desk or have them on the go, delivering a contract to their mobile devices is the best way to ensure that they sign it in a timely manner. Your customers can finalize deals from their cell phone with a few taps of their thumb, all while your contract remain secure and you can track acceptance.
When you find a partner who is experienced in providing enforceable SMS contracts, you can move beyond the PDF digital contract that invites redlining and negotiation and track and manage your contracts securely using clickwrap.
Improving any single part of the sales velocity equation by 5% can increase your overall sales velocity by 22%. Using text messages can help you reduce the length of the sales cycle, since contracts will be signed faster.
Take a look at how your sales cycle is functioning. With sales velocity, you can highlight exactly what your sales funnel needs to work at peak performance. If your sales are taking too long to close, you should accelerate the ways your contracts are presented, reviewed, and signed. SMS contracts are built on legally established precedent. Finding a partner who can walk you through how that can be a solution for your organization could help you make key improvements to your sales velocity.
For more on how to use contracts to your advantage in the sales process, download our eBook: A Salesperson's Guide to Beating Growth Goals: Contracts that Close Faster.