09-27-2017 09:15 AM
Questing for all marketers, sales, BD people that sell Services. What do you think is a good closing ratio? I always thought that 12% was a good minimum number but are my expectations too high? I am in a position of BD so I can't control the close as I'm not the estimators. Love to hear from you guys on this.
09-27-2017 11:01 AM - edited 09-27-2017 03:07 PM
@ArcheryChicWhere in the pipeline are you?
The long time ratio is that 50 contacts yields 10 pieces of active opportunity, equals around 5-7 calls for bid, results in 2 pieces of business.
If someone is doing your propecting for you, then obviously your business to call ratio will be much higher...
This has been held to be true over many industries, once they mature.
09-27-2017 12:31 PM - edited 09-27-2017 12:32 PM
So based on what you provided, close ratio on 50 contacts buying something is just over 2%? I'm the prospector and for every 10 million in bids I provide, I would expect to win 12%. I was wondering if I am too high on that expectation.
09-27-2017 03:07 PM
@ArcheryChicOver the long haul, 12% of the total would seem very high. (from the start of the identifying of prospects)
If it was higher than normal, It would likely be owing to a variety of factors - first mover in an industry, a "hot" sector, etc. All those are temporary.
Normalized, over the long haul, and with many players, those numbers have been quite consistent.
09-30-2017 07:57 AM
A closing ratio is something that is unique to each industry and each sales person. To accurately establish yours you need to track your numbers for a given period of time. Number of prospects reached out to, number of prospects that responded. Out of those how many did you bid? And then finally out of those you bid, how many were actually closed.
Currently for my own sales team I'm tracking number of leads being assigned to each rep. Number of contacts (emails, calls, social reach) to these contacts. Tracking number of responses, email opens, calll backs etc. Then tracking number of SQLs or Sales Qualified Leads, that have been completely BANTed. Which means they all have met the criteria of having a Budget, the Authority to purchase, a well-defined Need and last an expressed Timeline associated with their project. From SQL we track how many have closed. From the actual sales side we track Sales for the Quarter along with a trailing 365 day Marketing pipeline vs actual revenue realized for the period. Once we get a prospect to the SQL stage we have about a 33% closing ratio. That 33% ratio also seems to hold true for the net level up the funnel when we convert MQLs to SQLs. So in essence it would take 9 Marketing qualified leads to generate one actual sale.
Running these numbers on a regular basis will allow you to compare reps, compare campaign to campaign or lead source to lead source. You'll also be able to establish your average sales cycle time. Being able to spot funnel weakness early will give you a chance to react quickly and add an additional lead gen campaign to pick up the slack. But you need to accumulate your own numbers first in order to gain true insight into your business.
10-12-2017 05:54 AM
@Stingray I agree 100%. When I hear the guys that go around the country training sales teams talk about close ratios painted with a broad stroke across all industries, I think they're nuts. How can you compare a transactional sale where a salesperson is completing dozens of sales a day (ex: a telemarketer) with someone selling a high value item that takes 12-18 months to close? Am I seeking out business, or is my phone ringing all day long? How much marketing support exists? Should the ratios be the same for someone selling a $1.00 item and a $1,000,000 item? Are you selling a product that's been in the market long enough for people to understand and trust, or do you have to teach customers about your product before they'll move forward? Are you an established company or are you new to the market? How long have you been a salesperson? It never made sense to me.
I think there are certainly valuable nuggets of information you can take from a bird's eye view, but it's important to look at your own industry and personal history before determining what #s you should be capable of.