Looking At Closing Ratios<\/strong> If the person did in fact buy something, you closed the sale.<\/p>\n Keep track of the results over time and you’ve your closing ratio.<\/p>\n If that’s a bit too broad, you could look at the number of proposals<\/a> you\u00a0make and deliver to a prospect. Keep track of the number of\u00a0people who buy, and you’ve your closing ratio.<\/p>\n But closing ratios shouldn’t be the only determining factor.\u00a0Consider these additional criteria:<\/p>\n * Number of times you meet with the customer before the sale closes. Number Of Closes?<\/strong> It’s important that you know how many times you must meet with\u00a0a customer before she buys from you. What percentage of your\u00a0sales close on the first interview? The second? The third?\u00a0The fifth? Or the twentieth?<\/p>\n Why is this important? Because if you’ve got to have multiple\u00a0meetings with the customer, you’re probably wasting a lot\u00a0of time and getting very little in the way of results.<\/p>\n Bob, one of my consulting clients, found that he sold 38 percent\u00a0of his opportunities during either the first or second meeting.\u00a0But only sold another 9 percent of his opportunities\u00a0in a third, fourth, fifth, or subsequent meeting.<\/p>\n His problem was that he was spending more than half his time calling\u00a0on people a third, fourth, or fifth, time, and these people weren’t\u00a0buying. Furthermore, the average size sale of those that\u00a0did buy was smaller than his sales to customers\u00a0who bought on the first or second meeting.<\/p>\n Bob drew a proverbial line in the sand: If he didn’t make the sale\u00a0after the 2nd meeting, he closed the file and moved on.<\/p>\n This freed up hours of time – every day – that he now spends\u00a0looking for new prospects. His business has soared.<\/p>\n Sales Cycle Once you know what that length of time is, your challenge\u00a0is to discover ways to shorten it.<\/p>\n Most sales people spend too much time telling\u00a0the prospect about their:<\/p>\n * Wonderful products, What they fail to do is ask great questions so they can discover\u00a0what it is that the customer is trying to accomplish.<\/p>\n Because the sales rep doesn’t know what the customer’s goals and\u00a0objectives, problems, challenges, or issues are, he’s unable to make\u00a0a strong case that he’s offering a viable solution for the customer.<\/p>\n For that reason a decision is put off till a future time. With the sales\u00a0rep calling every few weeks asking, “Do you want to move\u00a0ahead with [insert product or service]?”<\/p>\n Here’s something to think about: If a customer’s got a problem,\u00a0why wouldn’t she want to do something about it… today?<\/p>\n I’ve found the best method to identify problems is to ask great\u00a0questions. Ellen, another of my clients, is a financial planner. One\u00a0day she asked Sue, a potential client, this question: “What are\u00a0you trying to accomplish in your financial planning?”<\/p>\n Sue started talking and for the next forty-five minutes she told\u00a0her everything she wanted to do. When she had finished, she\u00a0looked at Ellen and said, “Is this something you can do for me?”<\/p>\n “Sure.” Ellen said, and wrote up the order.<\/p>\n What Do You Earn On Each Sale? For example, a real estate broker could earn $10,000,\u00a0$25,000 or $100,000 on a single transaction.<\/p>\n A mortgage broker could be earning $1000, $2000,\u00a0or $5000 per transaction.<\/p>\n While someone selling insurance may make no more\u00a0than $300, $500 or $1000 on a single sale.<\/p>\n If you’ve got to meet with someone two, three or four times to\u00a0close the sale – and you’re only going to make a $150 commission\u00a0– you’re not making much money, especially when you\u00a0factor in commuting and preparation time.<\/p>\n Separate Buyers From Non-Buyers If your prospect isn’t going to buy, you’re better off knowing it sooner\u00a0rather than later. You don’t want to follow-up with a prospect for 30,\u00a060 or 90 days and then discover you aren’t going to make a sale.<\/p>\n When a salesperson tells me their closing ratio is 20 percent, they’re\u00a0really saying that 80 percent of their time is being wasted. If they\u00a0only wasted 50 percent of their time, their business would double.<\/p>\n Think about this:<\/p>\n * When you close your opportunities, you sell 100 percent of those who are going to buy.<\/p>\n * When you don’t close your opportunities, you fail to sell\u00a0100 percent of those who ARE NOT going to buy.<\/p>\n Your real problem may not be in your closing ratios, but may be\u00a0in your inability to identify who is – or is not – a prospect.<\/p>\n Five Ways To Grow Your Business 1. Find More Prospects. <\/strong>Spend more time looking\u00a0for people who need your products or services.<\/p>\n 2. Look For New People.<\/strong> Get out of your comfort zone.\u00a0Call on people you’ve never spoken with before.<\/p>\n 3<\/strong>. Ask Better Questions.<\/strong> Spend more time searching for the\u00a0issues that are important to the customer instead of telling\u00a0 her all about yourself, your company, and your products.<\/p>\n 4. Use The Telephone More.<\/strong> The telephone is a great time-saver.\u00a0Spend more time calling prospects, and use the phone to\u00a0pre-qualify them before you have a face-to-face meeting.<\/p>\n 5. Prune Your Database.<\/strong> Remove bad prospects from your database.\u00a0Stop calling on people that you’ve called on forever who\u00a0have not done business with you.<\/p>\n – Jeffrey Mayer<\/p>\n
\nThere are different ways you can look at closing ratios. In the broadest\u00a0case, you could assume that each time you created an opportunity\u00a0– where you think someone is going to buy something from you –\u00a0you record it as an opportunity in a spreadsheet.<\/p>\n
\n* Length of time it takes to close the sale.
\n* Average amount of the sale.<\/p>\n
\nYou may not realize it, but selling is a time management issue.<\/p>\n
\n<\/strong>A second factor to consider is the length of your sales cycle<\/a>. How\u00a0long does it normally take from the day you create the\u00a0opportunity to the day you’ve a signed order.<\/p>\n
\n* Their years of experience in the business, and
\n* The huge number of customers their company\u00a0does business with.<\/p>\n
\n<\/strong>The amount of money you earn on each sale is very important.\u00a0If your average earnings are in the thousands of dollars, you\u00a0can afford to invest more time in the opportunity than\u00a0if you’re only making a couple of hundred dollars.<\/p>\n
\n<\/strong>Once you know your closing ratios you need to improve your skills\u00a0so you can do a better job of identifying who is a buyer and\u00a0who isn’t, in the shortest period of time.<\/p>\n
\n<\/strong>Here are five strategies you can use to\u00a0dramatically improve your business:<\/p>\n
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