How to Improve Sales Close Rates with this Real-Life Example
I recently spoke with a sales leader who saw a dramatic increase in his team’s close rate, increasing from 34% to 54% over the last twelve-month period -- not bad! So how did this sales leader improve his team’s close rates?
He focused on three key criteria that represent the proverbial low-hanging fruit (i.e., low cost, high return) of any sales transformation/performance improvement initiatives.
1. Better Targeting of Prospects
First, the sales team implemented a rigorous targeting of prospecting leads that have similar demographic characteristics to their most valuable customer. Using a “reverse engineering” concept based on specific demographics and certain behavioral characteristics they created a clear set of criteria. Or as marketing calls it, an ideal client profile (ICP).
The concept of an ICP differs from opportunity qualification (see below), which happens after you’ve set the meeting. Your ICP is a more top-of-the-funnel concept. It’s a fictional representation of your best sales leads based on research, past experiences, current leads, and your team’s resources. Create your ICP to identify the prospects most likely to convert into highly valued customers.
When developing ICPs, don’t just look at your entire customer universe. Instead, focus on your very best customer universe. You should also consider the customer accounts that have been the most profitable. Then look for patterns and similarities.
Here are three factors for creating the ICP for your team:
- Company Demographics. Start with the basic demographic information of your best, most profitable customers. Are your best customers in specific industry verticals? What about customer size (number of employees/revenues)? Are they located in specific geographies? Do they share common business problems? Who are their customers?
- Buyer Demographics. Now that you have a general idea of which companies to target with your prospecting efforts, you must consider whom to target within those companies. Consider the following buyer demographics: Title, level of seniority, role in the organization, and buying/budget authority.
- Likelihood of Engaging. Finally, consider the prospect’s likelihood of engaging with you. What are the readily identifiable trigger events? For example, acquisitions, expansion, or sustainability initiatives. Any relevant industry trends? What technological, economic, or regulatory changes make your solution more appealing? Do you have relevant success stories with similar customers? Has the prospect previously consumed your content (e.g., downloaded whitepapers or attended webinars or other events sponsored by your company)?
2. More Relevant Messaging
After identifying their ideal ICPs, the sales leader told me that his team increased their close rate by working on improving their prospecting messages.
Like many other sales teams, they used a prospecting automation system to automate and manage their prospecting sequences. One of the downsides of automation is that it increases the quantity and velocity of calls and emails, but it doesn’t improve the quality. While automation will help your team maintain high activity levels, it won’t guarantee great prospecting results.
Using extensive A/B testing and good old trial and error, the sales leader noted that his team significantly improved their prospecting email open rates and response rates by offering prospects compelling reasons to engage. They did this by sharing insights, success stories, or other relevant information with ICP prospects.
3. Stricter Qualification Criteria
The sales leader also explained that the third driver of his team’s successful close rates was stricter qualification criteria to screen out low-quality opportunities, saving time to work only on prospects with the best chance of closing.
Specifically, his team started by rigorously following BANT criteria:
- Budget – avoid spending time on an opportunity where there is no budget
- Authority – avoid talking to buyers who have little influence in the decision-making process which rarely leads to closed business
- Need – without a well-defined need it’s not a real opportunity, and it will eventually stall
- Timing – any opportunity needs a clear time frame to be qualified
In addition to BANT, the sales leader also highlighted two more factors that go to the heart of a qualified opportunity.
First, is this opportunity worth pursuing? What is the short-term and long-term revenue/profit potential of the account? Will winning the account provide you with any competitive advantages in the marketplace? Do you have adequate resources to deliver successfully?
Next, can you win? Does your solution meet the critical buying criteria? Have you established relationships with the buying organization’s key executives, decision-makers, and influencers?
Every sales team has a unique combination of abilities and challenges, so there is no “one size fits all” way of improving performance and close rates. The sales leader I spoke with who dramatically improved his team’s close rates, offers the right performance improvement roadmap for most teams. Start by focusing on ICP targeting, messaging, and opportunity qualification criteria.
About David Jacoby
As a Managing Director at Sales Readiness Group, A Part of SBI, David helps large B2B sales organizations improve sales performance. Previously, David was a Principal at Linear Partners, a sales consulting firm providing sales strategy, sales operations, talent management, and interim management services to emerging growth companies. In the past, David has served as Vice President of Business Affairs of Xylo, Inc., where he was responsible for the Company's business development, sales operations, legal affairs, and financing activities.