Increasing the percentage of sales closed by employees is one of the most cost-efficient strategies for generating additional revenue. It should therefore not come as much of a surprise that every CEO is keenly interested in evaluating their employees’ current closing rates and determining the areas in which there is room for improvement. Considering how enhancing closing rates requires little or no financial investment, CEOs have to be able to evaluate closing rates quickly and easily to ensure any necessary changes are made on an immediate basis.
Evaluating the closing rates of each individual employee requires a nuanced approach that considers the full context of the employee’s closing rates in order to ensure accuracy and to amend any strategies or circumstances that may be adversely influencing these closing rates in some way. The principal concern of a CEO seeking to evaluate their employees’ closing rates should be the collection of as much relevant data and analytics as possible.
Real-Time and Historical Data Analytics
Having access to the most ideal analytical metrics is just as critical as being able to read those metrics for the purpose of evaluation, especially since technological advances have made it possible to collect real-time analytics for immediate evaluation. Of course, the historical data will be most useful in conducting an evaluation, but it is certainly necessary to have the most recent information available to the CEO for evaluative purposes.
The number of opportunities generated relative to the total number of sales closed can reveal quite a bit about each individual employee’s ability to close out a sale. Before evaluating the closing rate, however, the CEO has to consider not just the volume of the opportunities but also the quality of those opportunities. After all, the closing rate will not offer much insight into an employee’s ability to close out sales if the opportunities at their disposal are of relatively low quality.
When the data reveals an excessive number of low-quality opportunities, it is necessary to take steps to rectify the manner in which sales opportunities are generated with the goal of creating a greater percentage of high-quality opportunities. This will naturally improve closing rate and will provide some context for the employee’s success rate in closing sales.
The next metric the CEO should review is the size of the deals being pursued by the employee. While most recognize that larger deals are more difficult to close and are far more time-consuming than smaller deals, there are still employees who will remain overly focused on attempting to close a larger deal at the expense of smaller and easier-to-close deals. If the employee’s closing rate is subpar when compared to his or her colleagues, then a focus on above-average deals may be the culprit. This is also easily rectified following an analytical evaluation.
While closing rate is often discussed and evaluated as a percentage of total opportunities successfully closed, there is value in evaluating the sheer volume of the closed sales. An employee with an impressive closing percentage but below-average sales volume may not be operating as efficiently as they should be. These employees should focus on a shorter sales cycle so that both the closing percentage and the total volume of sales are within the desired range.
Increasing Closing Rate Based on Analytical Feedback
These metrics can be used in evaluating employee performance as well as in increasing the overall company sales performance. Since the aforementioned metrics are capable of generating accurate predictive models based on previous sales performance, the efficacy of any changes can be properly evaluated by comparing the predictive model with the actual sales results. The availability of real-time analytics can also ensure that employees are implementing the changes discussed based on prior evaluations, as the CEO can review the relevant analytics immediately and recommend changes on an as-needed basis.