Closing ratio is a term used in marketing to describe the ratio of sales opportunities that you have closed to the total number of sales opportunities that have been presented. It is a useful measure of the effectiveness of your sales process and should be closely monitored to ensure you are consistently closing deals and improving your performance.
The closer your ratio, the better it is for your business. It is typically expressed as a percentage – for every hundred leads you have, how many sales did you make?
Unfortunately, closing ratios can be difficult to accurately measure without a clear sales process, and this is why having one in place is so important for a successful business.
Without it, it's impossible to analyse what factors are helping or hindering your ability to close deals.
To accurately measure your closing ratio, there are three key steps you should follow:
1. Set clear sales goals
First, set clear and measurable sales goals. These should be tailored to your business and the product or service that you are selling. This will help you to track progress over time and adjust your strategy when needed.
2. Track your sales funnel
The second step is to track your sales funnel. This involves tracking the steps each lead takes from initial contact through to purchase. This will allow you to identify any bottlenecks, weak points or successes that could be impacting your closing ratio.
3. Measure your closing ratio
Once you have tracked your sales funnel, you can begin to measure your closing ratio. To do this, you should look at how many sales you made compared to the number of leads and sales opportunities you had.
Ideally, you want to aim for a ratio around 80%, meaning that for every 100 leads, you close 80 sales.
Generally, a closing ratio of around 80% is considered high, but this can depend on the type of product or service that you are selling. It is important to note that a lower closing ratio is not necessarily bad – it could also be an indication of the quality of customers or leads that you are attracting.
By following these, you will be able to effectively measure your closing ratio and use it to identify any areas that need to be addressed. Here are a few key best practices to keep in mind:
- Invest in high-quality customer service – providing a personalised experience is key to helping customers along the sales funnel and increasing your closing rate.
- Monitor customer feedback – customer feedback is invaluable for identifying any areas of improvement and helping you optimise your approach.
- Develop a repeat customers strategy – engaging with existing customers is a good way to help increase customer loyalty, as well as your overall closing ratio.
- Measure ROI – the ultimate measure of success should always be the return on investment that you are receiving from each lead.
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The second step is to track your sales funnel. This involves tracking the steps each lead takes from initial contact through to purchase. This will allow you to identify any bottlenecks, weak points or successes that could be impacting your closing ratio.
3. Measure your closing ratio
Once you have tracked your sales funnel, you can begin to measure your closing ratio. To do this, you should look at how many sales you made compared to the number of leads and sales opportunities you had.
Ideally, you want to aim for a ratio around 80%, meaning that for every 100 leads, you close 80 sales.
Generally, a closing ratio of around 80% is considered high, but this can depend on the type of product or service that you are selling. It is important to note that a lower closing ratio is not necessarily bad – it could also be an indication of the quality of customers or leads that you are attracting.
By following these, you will be able to effectively measure your closing ratio and use it to identify any areas that need to be addressed. Here are a few key best practices to keep in mind:
- Invest in high-quality customer service – providing a personalised experience is key to helping customers along the sales funnel and increasing your closing rate.
- Monitor customer feedback – customer feedback is invaluable for identifying any areas of improvement and helping you optimise your approach.
- Develop a repeat customers strategy – engaging with existing customers is a good way to help increase customer loyalty, as well as your overall closing ratio.
- Measure ROI – the ultimate measure of success should always be the return on investment that you are receiving from each lead.