Lead Velocity Rate (LVR) is a crucial metric for startups, especially when seeking investment, for several reasons:
- ๐๐ซ๐๐๐ข๐๐ญ๐ฌ ๐ ๐ฎ๐ญ๐ฎ๐ซ๐ ๐๐๐ฏ๐๐ง๐ฎ๐: LVR calculates the real-time growth of qualified leads month over month. Itโs often considered the best predictor of future revenue and can be unaffected by seasonality or team quality.
- ๐๐ฌ๐ฌ๐๐ฌ๐ฌ๐๐ฌ ๐๐จ๐ง๐ -๐๐๐ซ๐ฆ ๐๐ซ๐จ๐ฐ๐ญ๐ก ๐๐จ๐ญ๐๐ง๐ญ๐ข๐๐ฅ: LVR assesses a startupโs potential for long-term growth by measuring the month-to-month percentage change in the number of qualified leads. This allows startups to forecast sales from one month to the next.
- ๐๐๐๐ฅ-๐๐ข๐ฆ๐, ๐๐จ๐ญ ๐๐๐ ๐ ๐ข๐ง๐ : Unlike sales numbers, which are lagging indicators defining what happened in the past, LVR is real-time and clearly predicts future revenues and growth. This makes it a more strategically important metric than revenue growth.
- ๐๐๐๐ง๐ญ๐ข๐๐ข๐๐ฌ ๐๐ฌ๐ฌ๐ฎ๐๐ฌ ๐๐๐ซ๐ฅ๐ฒ: If sales rates are out of sync with your LVR, it indicates a problem with either the sales team or the product that is preventing sales from being as robust as expected.
Investors are interested in these aspects as they provide insights into the startupโs future performance and growth potential. Therefore, maintaining a healthy LVR can be a strong indicator for investors that the startup has a promising future.
