As a salesperson, you have probably been asked severally what your sales closing ratio is. A closing ratio is a key performance metric that sales reps are always working towards improving. This metric takes into consideration the number of prospects you have converted into buying customers. Sales representatives can enhance the size of their sales closing ratio by looking for ways to increase their chances of closing a deal.
What is a closing ratio?
A closing ration is the number of deals you have successfully closed compared to the number of presentations you make. For instance, if at the end of the month you conducted ten presentations, and out of all of them you only closed two deals, then your closing ration is 20% or 2/10ths of your potential sales.
The key factor in measuring your closing ratio is benchmarking your performance against past or historical trends and business targets.
The closing ratio is designed to analyze the effectiveness of your sales funnel. Even so, when taken alone, in perspective, the closing ratio provides little info into a sales rep’s effectiveness. However, when it is computed within the organization, it shows how a particular rep measures
How to improve your closing ratio
Choose your prospects
A sales representative is only as good as their leads. Hence, the first step to improving your closing ratio is to put in a considerable amount of effort into bringing better quality leads. Start by evaluating your best customers and create a profile called my ideal client. In this list, include the key characteristics that you want in an ideal prospect to create focus. Then, use these characteristics to choose leads that best fit your profile.
Qualify your leads
For you to improve your sales ratio, you need to focus on qualified leads. You do not want to waste your time on leads that will not buy whereas you could use the same time to close more deals with qualified leads. Hence, make lead qualification a top priority in your quest to close more sales.
Know your product
It is appalling how many sales reps make a presentation, but don’t know their product. Even if you have a great product or a portfolio that catches the customer’s attention without even trying, do not let this make you lazy, hoping that it will continue selling itself. In a tough economy, no one can get away with that. So take the time to analyze your product’s strong points. You can do this by;
• Determining all the reasons why a prospect would not want to work with your company
• What your competitors say when making a counter offer to your prospects
Once you have an answer to both questions, determine a counter argument to each objection or concern the prospect raises against your product or service. Also, make sure to answer all their objections or try to work any presumed objections into your presentation so that they do not even come up. Even if you get a complicated question that you cannot handle, do not ignore it. Make sure you get the right answer. This will give your company authority in the marketplace and
improve your closing ratio.
Get market intelligence
One of the great ways of improving your closing ratio is by revisiting previous failed sales and trying to figure out why they did not work. Remember, these prospects made the decision not to buy for a reason. Hence, you need to find out what this reason is, and try to work your way around it, or solve it so that it does not affect your future prospect’s buying decision. When gathering this information, look into why it did not work for a competitor.
If your company has built a good rapport and trust with its clients, then it should be easy to talk with them to find out why they did not purchase from a competitor. This information can be an eye-opener and can help you close more sales, improving your closing ratio. Use this information to deliver to your prospects what they need and not what you are trying to sell to them.
Work a referral system
In sales, referrals are some of the best prospects. However, most salespeople do not proactively help their customers to produce more references for them. Hence, it is crucial that you create a referral system, be it through a reward system or discounts for any referrals made. Hopefully, these steps will give you the push you need to close more sales and improve your overall closing ratio. Try incorporating different tips into your sales strategy to see which one works best for you.