What is close rate?
Close rate is a sales metric that measures the percentage of sales opportunities that are closed, against the total sales opportunities a business had.
How to calculate close rate?
To calculate the close rate, divide the ‘number of closed deals’ (the number of deals you’ve won) by the ‘total number of opportunities’ (leads) and multiply by 100 to get the percentage.
Formula for calculating close rate
Real-life example of close rate
Let’s assume, your business had 200 leads in its pipeline last month. Out of those, 50 deals were closed.
Then, your close rate will be: 50/200 x 100 = 25%
What’s an average close rate? (benchmark)
There’s no single benchmark for the close rate that every business should strive for as it differs based on your industry, product, business model, etc.
However, the average close rate across all industries is 19%. High-performing sales organizations are said to close 30% of their sales qualified leads (SQLs), while average companies only close 20%.
Ways to increase your close rate
- Use user-generated content in your strategy: Positive reviews make 91% of consumers more likely to use a business. You need to exhibit your positive reviews and user-generated content in order to win more deals.
- Improve your lead qualifying process: Once the prospect has travelled from MQL to SQL, the next stage is “opportunity”. Qualify your prospects using strict qualification criteria before they become opportunities, to improve your close rate. Find out about some sales qualification methodologies
- Build robust closing skills of your team: Once you’ve qualified leads in your pipeline, the next step is to make them your paying customers, that is, close them. You need to shift your focus to honing your sales reps’ selling and closing techniques. Read this guide on: 7 Closing Techniques & Why They Work