We recently added a help article on how to calculate a sales closing ratio, based on how many quotes you create compared to how many turn into jobs.
The simple method in the help works for lots of people, but it’s not the whole answer. I have some reasons to care in this blog post, but there are more mechanics of how to measure.
What to measure?
There are lots of likely suspects that you may already be tracking – here’s a list of dates and activities you may be tracking to help you figure out your close rate.
- Quote creation date. For most countertop fabricators who’re doing walk-in retail business, this is a good metric of when a customer first showed interest.
- Quote acceptance date. The accepted date on quotes is a built-in field to help you track when a quote was accepted by a customer.
- First sales call. For us, the most important milestone that defines a “prospect” is the initial contact – either a sales call or meeting face-to-face.
- Product sale date. And, for us, the sale closes when we get a credit card number, so we have an activity on every job specifically to track when a customer paid.
- Install date. But, you may not think of the sale being complete with just the initial deposit. Lots of countertop fabricators consider the installation date the key to when they consider a job “done”.
- Invoice date. Many folks who use our software have an activity specifically for the invoice date or date of final payment. This is probably the true proof that there was a sale, especially if you only get paid in full after the countertop is installed.
So, the first step is deciding the milestones that matter when you’re choosing a close ratio. I gave a few examples, but I’m sure there are many other events in your business that define if something’s a “lead” and a “sale”. In the next post in this series, I’m going to show some examples of how choosing when to measure also has an impact on how you’re reporting sales closing ratios.