Why are Closing Rates so Important?
When it comes to moving a sales opportunity through the funnel one of the most important steps is actually closing on a sale. Your closing rate is the ratio of deals that you have been able to close, compared the total number of presentations or demos you make.
Some examples of deal closing remarks you'll hear reps saying are:
“Ready to move forward? I can send over the contract right now.”
"Why don't you give it/us a try?"
“So when should we get started on implementation?”
The key is to constantly be narrowing the gap between the number of demos you're giving and the number of Close Wins you have.
Closing rates can be organized into three different groups.
1. Repeat sales to a current customer
2. New product sales to a current customer
3. New product sales to new customers
Repeat Sales - > Current Customer
Repeat sales to a current customer is typically a huge part of the sales you will make. Your brand has already been proven worthy enough for them to try and, if you have been on top of maintaining customer service, that client should be happy enough with your brand to renew your service or repeat a purchase. This sales rate is not always the best indicator of how a sales rep is doing because the client has already bought into the brand. This is a better representation of how the company and the company’s customer service skills are doing.
New Product - > Current Customer
Similar to repeat sales, selling a new product to a current customer is another category that is typically easier than a new product to a new customer. This category plays off of the connections and the bonds you have created with your customer base. Rather than having to make cold calls to a lead, you are reaching out to a potential customer that you already know the needs of. Knowing your customer gives you an advantage on how you target them with a new product. Additionally, your team should be keeping a tab on their continued needs in order to maintain a high customer satisfaction rating. It is easier to sell a new product to a customer that already has a positive view on your company and your products.
New Product - > New Customer
Selling new products to new customers are typically the hardest sales to close on because your brand has not yet been established to this prospect. Essentially this is where cold calling and cold emails come into play. This is a category where you can begin to form connections once you get your lead to close. The difficulty of closing on this type of deal challenges sales reps to test and build their skills. The close rates on these deals can indicate how strong a sales rep’s skills are. Because this category is more difficult, you can expect closing rates for this type of deal to be lower than the other two types.
No matter what type of sales your team is focused on, increasing your Close Win Rate is key. You can use Leadtime as an effective coaching tool to help get your reps to reach their closing number goals. Get more information about our app here.