It’s Closing Time: How Top Sales Leaders Predict Deal Close Rates

To build a world-class inside sales team, you must possess the power to not only know when deals will close, but also to be able to predict when they are going to close.

 

For our latest eBook, we asked several of the world’s top authorities on inside sales which metrics they thought more inside sales managers should be tracking. It’s no surprise that several sales leaders revealed metrics that give insight into the results of sales peoples’ efforts. After all, if your reps can’t close deals then you’re in a heap of trouble. But what’s compelling is that the responses focus on factors that go beyond who is or isn’t hitting quota. Instead, the top sales experts are more concerned with why deals aren’t closing and how to raise the close rates of an entire team.

Tracking these four inside sales metrics can help you ensure that more account executives crush quota:

Lead Closure Percentage

2014-10-01_1549As a mid-market sales influencer, writer, consultant & trainer, Lori Richardson knows a thing or two about helping inside sales teams close deals! For Richardson, one of the most vital metrics to track is lead closure percentage. But this seemingly simple metric reveals more than you may think.

According to Lori Richardson, “By tracking this metric, I can tell several things:

1. If QUALIFIED leads are happening, then I have an engaged sales team that is working to identify more probable prospective buyers vs. less probable.

2. If these leads don’t come to closure, I can then zoom in and find out what about the value proposition isn’t resonating with buyers.

3. I can also see what within our sales team is an issue – lack of sales skills? Or were these leads really not qualified in the first place.”

Proposal to Close Rate

2014-10-01_1545It’s not just important to track how many leads close. According to AG Salesworks’ CEO Paul Alves, one way to help ensure close rates is to monitor how many proposals that are sent out actually close.

“While all sales metrics have value and can provide valuable insight in specific areas of the sales process, the one metric I believe to be the most important is the conversion of proposal to close. If this number is low, say 20%, then the salesperson is sending too many proposals. And if it is too high, for example 80%, they may be sending too few. I believe a number of 50% is about right. In any case, this information will allow sales management to do a deep dive into a sales rep’s process to see what is working and what is not with a high degree of specificity.

For example, if reps are sending too many proposals, they may not have the necessary skills to identify a real prospect from one who is just gathering information. Of course, this can lead to a false sense of security and lots of valuable time wasted. If reps are sending too few proposals, they may be being too conservative and missing out on prospects, who if further qualified, may have seen the value and been a fit.”

Percentage of Reps at or Above 90%

2014-10-01_1547_001The Bridge Group’s Matt Bertuzzi offered some insight into how to gauge the overall health of your inside sales closers:

“When thinking about metrics, I’m often reminded of this line attributed to Albert Einstein:

‘Not everything that can be counted counts, and not everything that counts can be counted.’

There is a particular metric which can both be counted (the easy part) and also counts (the part that really matters). That metric is Percentage of Reps at or above 90% of quota. Capturing this metric gives you four points throughout the year to stop and ask yourself important questions.

Here are the benchmarks from our Sales Team Grader:
• After one quarter, 49% of reps should hit 90%+
• After two, 58% of reps
• After three, 66%
• By year’s end, roughly 72%

Opportunity to Close

2014-10-01_1547As The Sales Blog’s Anthony Iannarino pointed out, an important closing metric to track is opportunity-to-close rate.

“First, I want to see the new opportunities created each week. No deal is ever closed that isn’t first opened. If you open new opportunities with consistency, you do well. If you don’t, you struggle. Second, I want see which opportunities were moved forward in the sales process. This is where the action is, and it tells you most of what you need to know to determine how your salespeople are doing and how to help them.”


Recommended eBook: Most Essential Sales Metrics

 

About the Author

Jesse WestDirector of Lifecycle MarketingringDNA

Jesse Davis West is Director of Lifecycle Marketing at ringDNA, focusing on improving the experience and maximizing the lifetime value for customers across their entire journey. Drawing on 9 years of B2B marketing experience, Jesse is passionate about communication, branding and strategic marketing. He also plays a mean lead guitar and can throw down at karaoke.