No, don’t worry—this isn’t one of those generic “how to close more deals” articles, where the author is pretty much just channeling their sales tips straight from Alec Baldwin circa 1992.
If you’re already leading a sales team, you already know what a close rate is and how to sell.
However, if your team isn’t closing as much as they could, it might be a question of looking beyond the surface-level sales conversation, and getting into the nitty-gritty processes that close more deals.
We’re going to focus on six practical process improvements that can dramatically increase close rates for your sales team.
No tough-guy monologues required.
What is a close rate?
Sales close rate or close ratio is a sales metric that tracks how many deals you close out of the total number of sales-qualified leads (SQLs) you receive.
OK, we said we weren’t going to be obvious about this—but there’s actually a fair amount of disagreement about the definition of a sales close rate.
Close rate vs. win rate
For instance, some salespeople confuse close rate with win rate, but they’re somewhat different:
- Close rate is the number of opportunities that you won, as a percentage of all the opportunities created during the same period of time.
For instance, let’s say you’re looking at your sales numbers in the CRM for last month. You had 100 sales leads and won 4 deals. Your close rate would be 4/100 = 4%.
- Win rate is the number of closed-won opportunities, as a percentage of all closed opportunities during the same period of time.
In the same example, let’s say that of those 100 opportunities, you closed 40 (4 closed-won, 36 gone for good, a.k.a. closed-lost). Your win rate is 4/40 = 10%.
Close rate vs. conversion rate
If that’s not confusing enough, many sales professionals also seem to use the terms close rate and conversion rate interchangeably.
To clear that up:
- Close rate measures only the number of opportunities or SQLs that resulted in a sale.
- Conversion rate can be for any type of conversion, at any point in the sales funnel. Conversion just means that someone moved to the next stage in the funnel.
For instance, if your marketing team is tracking web conversion rates, then they’ll likely be looking at how many website visitors converted to new leads (rather than the number of deals).
How to calculate your close rate
To calculate close rate, just divide your closed deals by total opportunities:
Close rate = Closed deals / Total SQLs x 100%
If you want to calculate your close ratio, just leave it as a ratio and don't multiply by 100%.
Of course, not all companies define sales-qualified leads the same way—and the number of leads can easily skew your close rate artificially.
Figuring that out will likely come down to effectively collaborating with Marketing on lead generation and qualification.
There’s also the option to use the monetary value of each deal to calculate your sales close rate. For instance, if you have $100,000 in your pipeline, and you close $10,000 in deals, then your close rate would be 10%.
What is a good closing rate?
Close rates vary widely from company to company, so finding useful benchmarks can be tricky.
As a general rule of thumb, a close rate of about 20% seems to be average, and 30% is classified as outstanding.
But what we can tell you: industry makes a difference. Recent figures from Hubspot give the following average sales close ratios:
- Biotech: 15%
- Software: 22%
- Finance: 19%
Gartner’s research suggests that a good close rate will also vary depending on the cost of your product:
How to improve your sales closing rate
We’re going to assume here that your team is already doing the obvious—using a measurable, repeatable sales process, receiving training on the product and the customers, personalizing outreach, nailing your sales calls, and so on. (If not, we got you.)
To go beyond the basics, here are six small tweaks to your sales process that can help you hit those quotas:
1. Improve your qualification process
It’s easier to close high-quality leads. Using a standardized sales lead qualification system can significantly boost your close rate. For example:
- The Sandler Selling System: An oldie but goodie, the Sandler method focuses on helping you identify buyers who are highly motivated to buy.
Here’s a guide on how to apply the Sandler Selling System.
- The MEDDIC sales methodology: MEDDIC is a great tool for business-to-business (B2B) lead qualification. It helps you develop a sales script that will help separate your ideal buyer from the rest and make sure you have all the information you need to close the deal.
Learn more about the MEDDIC sales approach.
2. Enable your buyer champion
When it comes to B2B sales, in particular, the secret of a high close rate is to make it easier for your buyer to buy—buyer enablement.
Buyer enablement is about giving your buyer the tools and knowledge needed to make an informed purchase.
Key to this process is the buyer champion—the person in the organization most convinced by your solution. If you give them the right support, they can become your sales rep—advocating for your product internally, overcoming roadblocks, and telling you who you should be talking to.
Your job is to provide them with all the information they need to convince the rest of the buyer team—sales collateral like product guides, data sheets, ROI calculators, or details on how you compare with the competition.
Here’s a more detailed guide on how to empower your buyer champion.
3. Use a multithreaded approach
To increase your total close rates, don’t just stop with your buyer champion. Try sales multithreading—building relationships with multiple people across your buyer's organization, instead of just one decision-maker.
This is a good idea in many sales scenarios, but especially in B2B sales and enterprise deals with multiple stakeholders and long sales cycles.
The secret to a multithreaded approach is to overinvest in discovery. Make it your mission to uncover:
- The key players involved in decisions
- How the buyer organization makes decisions
- Which relationships helped you out in previous deals
Read more in our guide to sales multithreading.
4. Elevate your follow up
No matter how stellar your pitch, if you don’t nail the follow-up, you risk your close rate.
Even if they seem excited at the time, potential clients get busy, and without a solid strategy to lock them down, the deal will end up on hold indefinitely.
Instead of leaving the ball in the prospect’s court, try using Dock to create a digital sales room.
Dock gives you an online workspace where you can easily communicate with your prospect, share information, and track progress toward key milestones in the buying journey—all from a single link.
Digital sales rooms make it far easier for your buyer to reach a final purchasing decision. You can embed relevant content, such as recordings of demo meetings, case studies, and data sheets that relate to the prospect’s specific use case.
It also keeps all the information in one place, so you aren’t relying on your prospect to forward emails to other stakeholders.
For instance, when employee recognition software company Nectar started using Dock to create digital sales rooms, they increased their year-over-year win rates by 31%.
Andrew Hollis, Director of Sales at Nectar, puts this down to becoming easier to buy from than the competition:
“Our competitors were sending just these snippets. They were like, ‘Here's your price quote’ in the email.
Whereas for us, Dock has become this vehicle where we’re sending cohesive, curated documents that have our G2 reviews in it, really nice headshots we had done up for everybody, and all these additional tools. The follow-up is just streamlined.”
5. Use a mutual action plan
Another way to avoid a stalled deal is to use a mutual action plan.
This is a customer-friendly sales roadmap shared between a sales account team and a buyer team, and you can start by introducing it to your client during your sales call or demo to keep the momentum going.
By laying out responsibilities, dates, and what a successful deal looks like, you avoid any uncertainty that might hold up the final close.
6. Prioritize your most engaged buyers
One of the issues facing many sales teams is that, after the call, they’re left in the dark. The client may be considering your proposal—or they may have forgotten all about you. Dock makes it much easier to figure out which buyers are most engaged, so you can follow up at key moments.
Because Dock lets you monitor whenever your prospect engages with your sales content, you can see how interested they are and what collateral interests them most.
Andrew at Nectar told us that this helped enormously with forecasting:
“As a personal Dock user, if I had a prospect go over 12 views on my Dock, they had like a 97% chance of closing. It was ridiculous.”
Increase your close rates with Dock
If you’re hitting 20% close rates, and you’d like to get that number up to 30% or more, you’d be well served to take a closer look at your follow-up game.
By making it easier for your buyer to buy, you’ll close more deals, more quickly.