How Sales Managers Utilize Closing Percentages
Closing percentage is an important key performance indicator (KPI) for sales managers to consider. The best way to figure closing percentage is to take the number of sales and divide it by the number of presentations.
Just like every other KPI, closing percentage is designed to provide you with some insight on where your salesperson is either strong or someplace he needs help.
Don’t get too caught up in what someone’s closing percentage (also referred to as closing ratio) is or isn’t. If your job is to increase sales, you certainly have to monitor this, but no more than any of the other KPIs.
A high closing percentage doesn’t necessarily equal success. If a salesperson is making just two presentations a month and closing one, he has a 50 percent closing percentage, which is outstanding! If that were the only thing he was judged on, he’d be considered a superstar. Yet, he made only one sale that month. Is that all you want?
Everyone wants to be a better closer, but that only matters if you get the prospect to that point in the process.
If one salesperson, call him Sean, is making twice as many presentations as Bridget, but closing only half as much, Sean has a noticeable issues in asking for the sale and overcoming objections.
Have your sales team tell you what they feel is a good closing percentage. Find out what they think they should be closing. Is it one out of three? One out of ten? Whatever it is, compare what they tell you to the actual numbers. The results could be surprising.
Unless they track the numbers themselves, most salespeople think their closing percentage is higher than it actually is. They tend to discount certain presentations or throw out certain data that doesn’t favor them. Don’t let this happen.
A professional salesperson will never become truly the best he can be until he can look in the mirror and know he did not do his job if the prospect doesn’t buy after a presentation.
Now, let’s back up that bold statement. If you do your job at every step along the way — build a relationship and good rapport, qualify the prospect, ask good questions, uncover the customer’s needs, find a way to solve his problem, make a great presentation, overcome any objections, and so on — If you do everything and the customer doesn’t buy, it’s your fault, all the way.
Before you shout, “What if they can’t afford it?” If that’s the case, then you didn’t really do a very good job of qualifying, did I? You should’ve found out there was going to be a money problem long before you ever got that deep into the sales process.
Don’t let your sales team play the blame game every time they don’t close a sale.