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In today's challenging business landscape, sales and marketing teams are tasked with achieving greater profitability with limited resources. It is important to track the conversion rate of leads in order to understand the success of your pipeline efforts in acquiring satisfied customers.

It is noteworthy that only 22% of businesses are satisfied with their conversion rates. Improving your sales closing rate is key to increasing lead conversions. This sales metric is crucial for monitoring the effectiveness of both sales reps and overall sales strategy.

This article will provide information on what a close rate is and how to calculate it. We will analyze average sales close rates by industry and provide suggestions for enhancing your sales close rate.

What do you mean by sales closing rate?

A sales closing rate measures the proportion of sales-qualified leads that convert into customers (closed deal). It is a key sales metric for evaluating the performance of your agents and their sales abilities. The sales close rate is an important KPI as it helps you assess the health of your sales pipeline. Also helps in finding out how efficient are your agents at closing sales.

Understanding your sales close rate is important for setting realistic targets for your sales team and improving their conversion abilities through effective agent coaching.

Why it's important to track closing rate

Understanding sales closing rates is important because it provides insight into the effectiveness of sales efforts. Driving a high volume of leads indicates strong marketing performance, but converting only a small percentage of those leads may signal a need to reassess the sales process.

Lead close rate is a valuable metric that can be applied across various levels of analysis. You can view the overall lead close rate of your sales team as well as the close rates of individual sales reps. There would likely be a higher lead close rate among more experienced sales representatives.

Researching the average close rate in your industry can help you evaluate your lead close rate. It is important to evaluate your success rate compared to others in your industry to determine areas for improvement.

What is a good close rate in sales?

There is no universally accepted ideal close rate that all businesses should aim for. Sales close rates typically vary by industry. Biotech typically has an industry average close ratio of 15%. The software industry has a 22% share, while the finance industry has a 19% closing rate.

The average close rate across industries is typically around 20%.

Several primary factors influence close rates, with lead quality being one of the most significant.

How is the sales close rate calculated?

It is important to establish a sales close rate benchmark in order to track your progress and set goals. Calculating your sales close rate requires data collection of key numbers.

To start, calculate the total number of sales or deals you closed during a specific timeframe. For example, let's say you focus on one quarter. Next, you will need to determine the total number of leads generated during that time period.

After obtaining these two numbers, one can calculate their sales close rate using the formula provided.

  • Sales close rate = (No. of closed deals/ No. of sales-qualified leads) x 100

The number of closed deals includes all deals which are either won or lost.

How to improve your sales close rate

Achieving a high sales close rate is a key metric to aim for. A higher sales close rate can lead to increased revenue. Here are a few tips that can help you improve your business sales close rate:

Reassess and improve your sales process

If your leads are not converting into customers, it may be due to the need for improvement in your sales process. If you have a sufficient number of leads, it indicates that your marketing efforts are successful. However, the issue may lie in converting those leads into customers.

It is important to review and identify any weaknesses in your sales process. Review to determine if there is a common stage in the process where most leads are dropping off. Examine customer data to identify any areas that may require improvement in addressing customer concerns.

Harness the power of collective expertise in sales

This strategy leverages the collective expertise of both sales and non-sales professionals to create a unified front that is more capable of addressing the complex needs and challenges of today's buyers. Unlike the conventional method, where a single salesperson might lead the charge, team selling involves a cohesive effort from Account Executives (AEs), Pre-sales Subject Matter Experts (SMEs), Sales Engineers, and Customer Success Managers. This collaborative approach not only diversifies your sales strategy but also significantly enhances your win rates.

Minimize friction in the customer journey

An important factor that can influence sales close rates is the level of friction in the customer journey. By reducing friction in the customer journey, businesses can enhance their sales effectiveness and revenue generation. Creating a seamless customer experience can enhance customer satisfaction and boost the likelihood of them selecting your product.

Create personalized interactive demos

Create customized interactive demos based on the specific requirements of the client being presented to. Demonstrate the effectiveness of your product in real-time to impress them. Interactive demos created with Fable can help customers better understand the full potential of your product, potentially increasing the likelihood of a purchase.

Appeal to the buyer's logical and emotional brain

Many sales strategies emphasize emotional selling, with the belief that people make purchases based on emotions rather than features and benefits. But is appealing to emotions always effective?

That is not the case.

It is important to understand when to appeal to the emotional brain of the buyer and when to appeal to the logical one. A general guideline to consider. Use emotional selling to guide the buyer toward making a purchase decision.

After the prospect sees the value of what you're offering, negotiations will begin. The decision to make a purchase will engage the critical and analytical parts of their brain. The next step is to present logical arguments in order to strengthen your business case and convince them.

Increase your close rates with Fable

Multiple factors are potentially influencing the consistent or increasing close rate across various industries. It seems that better alignment between sales and marketing, along with a focus on strengthening current customer relationships, are contributing factors.

And by utilizing a sales demo creation platform like Fable, you will notice an improvement in your sales close rate. Using Fable you can create personalized interactive demos in minutes according to the needs of different stakeholders who will use your product. 

Take Fable for a test drive today and see your close rate soar.

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