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Category: Sales KPIs.

When asked what their closing ratio is, not many companies really know what to say – or if they do, they say it’s “x percent or something.” Most companies don’t keep a detailed record of this – which explains the long silence after someone asks, “What is your closing ratio?”
There are various ways to look at the closing ratio – but the formula is actually fairly straightforward. If you have the right numbers – and obviously, do not overestimate your sales – you should be able to get a good average.

How is the Percent Closing Ratio Calculated?

The percent closing ratio will provide you and your sales team some insight into how effective your team is when it comes to closing in on a sale. In other words, this measure shows you the closed sales number of the past month – and compares it with the proposals that were given.

The Formula to Find this Ratio Looks Something like this: (Number of Closed Deals / Number of Sales Proposals) x 100 = Closing Ratio Percentage.

Ideally, you may want to apply this formula once every month, to see how your sales are going. Depending on a product line, each company will have a different sales closing ratio – so do not worry if you don’t get 100% right off the bat. Even 75% is considered a very decent ratio.

Analyzing Closing Ratios

For every time you launch a new product, you assume that a certain customer will buy your product – which is why you add it to a spreadsheet. If the customer does indeed end up buying the product, then it means the sale has been closed. And if you keep track of the number of times that this has happened, you’ll end up with your closing ratio.

Sometimes, however, even that result may be a bit too broad – which is why you may want to look at the number of proposals that have been sent. This way, you should be able to deliver a prospect and make a precise closing of your ratio.

The percentage of closing ratio, however, should not be the only thing you look at. You should also consider the following criteria:

  • The length of time it took you to close that particular sale
  • How many times you met with the customer before the sale has been closed
  • The average sales amount

By looking at these aspects, you may be able to improve your percentage and grow your business. You should keep in mind that in order to get a decent closing ratio, you ought to keep in close contact with the customer – until the sale is closed and beyond.

And the client that feels appreciated will always be a returning client – which will be great for your business. You might, however, want to close the sale from the second or third meeting – otherwise, you should move on. If the client is not willing to close the sale with you, then that means he or she has his doubts – which is why you should focus your time on looking for new clients.

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