Are sales reps underestimating their ability to close deals? According to a new data from Implisit, account executives are underestimating their ability to close deals. The study, which analyzed data from 500,000 opportunities, reveals that the average rep wins 13% more deals than predicted. In addition, reps are underestimating the time it takes to close deals. In the wake of this data, the need for accurate predictive analytics seems more apparent than ever before.
New Opportunity Close Rates Are Even Harder to Predict
When new opportunities arise, reps are even less accurate at predicting deals. During early stages (when reps assign a probability of 0-35% to an opportunity), deals are 21% more likely to become closed-won than reps anticipate. By the time reps assign 85% or higher to an opportunity, deals are only 2% more likely to close than reps’ estimates. But no matter where an opportunity is in your funnel, it’s statistically more likely to close than your reps estimate.
Why Salespeople Underestimate their Closing Power
So why are your reps underestimating their ability to close deals? I’m going with human nature. After all, no one wants to be that rep who is always predicting he’ll close deals, but seldom does. Expect reps to be conservative with their predictions. This also means that if managers can’t make accurate revenue predictions based solely on reps’ estimations, as there will virtually always be more attainable wealth in the pipeline than indicated.
A Matter of Time
Another interesting statistic uncovered by Implisit is that even though reps underestimate their ability to close deals, those deals consistently take longer to close than reps estimate. How much longer? The average opportunity closes 54 days after the estimated close date. The reality of B2B is that deals almost always take longer to close than we anticipate.
The Importance of Predictive Analytics
So what’s the takeaway here? When it comes to making revenue predictions, reps are unreliable narrators. That’s why it’s so important for managers to utilize tools that can power more accurate revenue predictions. Implisit, for example, enables you to analyze emails to make smarter predictions. And RingDNA automatically pulls call metrics into Salesforce dashboards that give you a more accurate view of why opportunities are getting stuck (as well as how to unstick them!)
For more closing secrets, check out our free eBook Closing Power!