Maximizing Your Sales Capacity – Improving Your Close Ratio (It’s More Than Just “Closing Skills”)
In our last blog, we noted three key metrics by which you can fundamentally assess your opportunity for improving sales capacity. In this blog, we will address the metric that typically gets the most attention – the close ratio.
Our research suggests that the “typical” wealth management close ratio ranges from 25% to 35% (for non-client referrals), with best-in-class pushing 50% to 60% (70% or better for client referrals!). No matter the client segment you are serving or what you are selling, a laser-like focus on your close ratio will yield noticeable improvement in sales performance.
To quantify the impact from improved close ratios, whether for one Advisor, fifty, or five hundred, download the Sales Capacity Calculator below.
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Common Causes of Lower Close Ratios
Lower close ratios for Financial Advisors typically stem from one or more of the following (some of which refer to “closing skills,” but some arise much earlier in the sales process):
- Misunderstanding of the prospect’s needs and priorities
- Lack of skill in helping the prospect recognize his or her needs and the importance of addressing them
- Ineffectively articulating your solution and its ability to most effectively address the need
- Inability to uncover or effectively address client objections
- Misunderstanding (or ignorance of) the prospect’s decision-making process
- You have not earned the right to even ask for the business (specifics to be addressed in one of our next blogs on “stage reversion”)
- And, of course, simply not asking for the business
Improving Your Close Ratio
As a result of hundreds of engagements helping firms improve sales effectiveness, we have identified the following four tactics that, if implemented effectively, will undoubtedly lead to improved close ratios, enhanced sales effectiveness, and distinguished, sustainable revenue growth:
- The effective implementation of a disciplined sales process, mapped to a client-centric buying process. (In case you did not know, your best Advisors have such a discipline…even if you don’t!)
- The implementation of exit criteria for each stage of the process (to be addressed more in-depth in our next blog).
- A sales skill development process (far different from a one-time training event!) focused on practical application of sales competencies.
- And most often overlooked or ignored, the implementation of a proactive sales management discipline equipping Sales Leaders with the skills and structure to be of maximum value to their Advisors and the firm. (More specifics on this to come in a future blog.)
Call to Action
Consider the following questions:
- Do I/we have a sales process, aligned to our client buying process, with required exit criteria for each stage of the process? And if so, are we using it?
- How am I assessing closing ability? What information do I have available and how am I using it? (Quite difficult to do without positive answers to #1.)
- What are my close ratios? How does that compare to the industry average or best-in-class?
- Am I monitoring the number of calls it takes to close a new prospect, as well as the number of calls made on lost or stale opportunities?
- What are the common weaknesses I am seeing in my Advisors’ ability to close and how can I best address them (training, coaching, practice, etc.)?
- How much time is Sales Leadership spending with each Advisor per month? (Best-in-class sales industry data suggests that you should be spending at least three hours per Advisor per month – a combination of joint calls, 1-1 meetings, pipeline meetings, and sales meetings.) And how effective is Sales Leadership in helping Advisors close deals and improve skills?
In our next blog, we will address one of the most common and easy-to-remedy problems that, if resolved, will lead to meaningful improvement in your close ratio, calls/time-to-close, and overall sales performance – stage reversion.
For additional information regarding sales growth and sales skill development, subscribing to our blog here with your Email Here and/or subscribing to the RSS Here. Also, for a look at solutions that can apply to this topic, visit our website at www.greeneconsults.com or call us directly at 404-324-4600.