For most sales teams, close rate is the most important metric. It’s the bottom-line figure that tells you whether your team members are pulling their weight and whether the team is providing value to the organization at large. If your sales team isn’t closing deals at the rate, you think they should, you know something’s wrong – but you may not know what, exactly, is the problem.
In many ways, the trickiest part of the process is diagnosing what’s wrong. From there, you can hire a sales and marketing partner, provide better training and education, or just come up with some new tactics to resolve the issue.
In this guide, we’ll explore some of the most common reasons why close rates suffer – and the steps you can take to discover the root causes and eliminate them.
Typical Reasons for Low Close Rates
These are some of the biggest reasons by sales teams struggle with close rates.
- Bad offer. Every sale is a form of exchange, and you need to persuade the prospect to proceed with this exchange. If the exchange is perceived to be not in their favor, they’re not going to move forward. If your product isn’t perceived as robust enough, if the price appears to be too high, or if your prospect simply doesn’t see the value of what you’re offering, the deal will not move forward. Sometimes, offering a discount is all it takes to close the gap here.
- Low-quality leads. Too many sales teams focus on getting as many leads as possible and burning through those leads with aggressive tactics. But it’s much more important and much more valuable to focus on high-quality leads. One prospect who is a near-perfect fit for your organization is far more valuable than 100 prospects you don’t have much interest in your product. Sometimes, this is more of a problem with your marketing and lead generation than it is with your sales.
- Lack of sales rep knowledge or confidence. That said, if your sales reps lack knowledge or confidence in themselves, they’re not going to do a good job selling. Sometimes, this is attributable to a problem with your individual sales reps, but more often, it’s a symptom of lackluster training and education within your organization. If your reps don’t understand your product well enough, or if they don’t have the resources they need to succeed, there isn’t much recourse for them.
- Tough competitor. A sufficiently tough competitor can also get in your way. If there’s a similar organization offering a nearly identical product at a better price, you’re going to have your work cut out for you.
- Premature abandonment. Most prospects say no several times before they say yes. If your sales reps are abandoning the conversation prematurely, they may never have the chance to secure what would be a successful close.
Identifying the Problem
There are several ways you can identify the root causes of your low close rates, and to get a full picture, it’s recommended that you use all of them, including:
- How have your metrics changed over the past several months? Did your close rate take a dip when you changed tactics or when you increased prices?
- Customer feedback. What are your customers and prospects think about your pitches? Do your last opportunities have something to say about why they didn’t choose to move forward?
- Sales rep feedback. Also, listen to your sales reps. They may have specific complaints that reveal difficult circumstances preventing them from seeing better results.
Finding a Solution
Once you’ve identified the problem, you can take advantage of the following solutions:
- New offers. Changing up the offer could be exactly what you need to boost close rates. Giving customers some free bonuses, extending discounts, or even improving the functionality of your product in some way could make a huge difference in how many deals you close.
- More refined pre-selling. Selling is only effective if you have an effective presale process. You need to generate the best leads you can, filter out the leads that aren’t relevant for your organization, and condition your prospects with more information before you make the big pitch.
- Individual coaching. Are there certain individuals on your team who have lower close rates than others? If so, you should try individualized coaching. Make sure every member of your team is equipped with the knowledge and experience necessary to succeed in this position.
- Outsourced consulting. If you’re struggling to make any improvements to your close rates, one of your best options is to hire a consultant or outsource your sales needs.
There are many solutions that could potentially help you boost your close rate, and all of them have something of value to add. Keep experimenting and searching for new solutions as you continue to boost your sales.
