Lead Velocity Rate (LVR)

Definition

Lead Velocity Rate or LVR is a metric that measures a brand’s lead generation rate over a specific period. In simple words, LVR focuses on tracking the growth in your sales leads month over month. The calculation of LVR is pretty straightforward – it’s the percentage increase or decrease in the number of leads generated each month. A positive LVR indicates growth, while a negative LVR suggests a decline in lead generation.

Measuring LVR can be done effectively by utilizing specific marketing automation tools. For instance, Eloqua, Marketo, and HubSpot provide detailed analytics and can help track LVR and enable a more accurate assessment of how lead data is being captured, nurtured, and converted into customers.

How to calculate Lead Velocity Rate (LVR)

To calculate LVR, you can use the following formula:

LVR = (Number of Leads Generated – Number of Leads Lost) / (Number of Leads Generated – Number of Leads Won)

Where:

  • Number of Leads Generated is the total number of leads generated during a given period, such as a month or a quarter.
  • Number of Leads Lost is the total number of leads that were not qualified or did not meet the desired criteria, and were therefore disqualified or rejected.
  • Number of Leads Won is the total number of leads that were qualified and met the desired criteria, and weretherefore accepted as sales-ready leads.

By using this formula, you can calculate the LVR for your sales funnel by tracking the number of leads generated, the number of leads lost, and the number of leads won over a given period of time. The resulting ratio will give you a measure of how efficiently your sales funnel is converting leads into sales-ready leads, and help you identify areas for improvement in your sales process.For example, let’s say you have the following data for a given month:

  • Number of Leads Generated: 100
  • Number of Leads Lost: 20
  • Number of Leads Won: 80

Using the formula above, we can calculate the LVR as follows:

LVR = (100 – 20) / (1000 – 80) = 0.9 or 9%

This means that for every 100 leads generated, 900 were successfully converted into sales-ready leads, while 100 were lost. By tracking this metric over time, you can gain valuable insights into the performance of your sales funnel, and make adjustments to optimize the conversion rate of your leads into sales-ready leads.

Benefits of tracking LVR

One of the essential components of LVR is its potential to offer early indicators of sales growth, which can be critical in determining specific marketing efforts’ success. When the LVR trend is positive, it implies that the sales pipeline is growing, indicating steady revenue growth. Tracking LVR helps you identify when your marketing efforts are effectively generating leads and helps to foresee future growth prospects.

LVR is also beneficial for focusing your resources on specific initiatives for growth. It helps to identify areas that require more attention and allows you to adjust your marketing plan for better results. By identifying the areas that require your focus and utilizing LVR as your guiding metric, you can steadily grow your business.

Another benefit of tracking LVR is that it can provide insight into the quality of leads you are currently generating. A sharp increase in leads in a given period may look good on paper, but if those leads are not likely to convert into customers, it may not be worth the investment. In contrast, a slow and steady growth in leads may indicate that your marketing tactics are improving the quality of leads, making your sales efforts more efficient.

LVR is a vital metric that should be tracked by every marketer. It indicates whether your marketing investment is contributing to lead generation, providing insight into the effectiveness of past campaigns, and identifying areas of potential growth. Utilize specific marketing automation tools to measure LVR accurately, analyze trends, and make informed business decisions.

Resources

The Agile Brand Guide: Marketing Measurement & Analytics by Greg Kihlström is available in print and digital.