SellingBrew

Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your sales operation more effective.

Wait…What? Close Rates Can Be Too High?

Whenever we conduct a live webinar, there are usually a few questions that come in long after the session is over. Of course, we answer these post-session questions via email. And in a way, it’s somewhat unfortunate…because everyone else misses out on hearing some really interesting stuff!

For example, a few days after a webinar about increasing close rates, an attendee sent me this very intriguing and provocative question:

“Can close rates ever be too high? Is that a thing?”

As soon as I read the question, I performed an involuntary Homer Simpson impression…”Doh!”…and immediately admonished myself for not addressing the issue in the live webinar session. Here’s why…

The answer is absolutely and emphatically, yes! It’s certainly possible for close rates to be too high and it’s definitely “a thing”.

In the webinar session, we talked about how really low close rates can be signals or symptoms of other things. We discussed how low close rates might be indicative of inaccurate prospect targeting, weak or undifferentiated sales messaging, poor sales skills development, uncompetitive offerings and pricing levels, etc.

Well, on the other end of the spectrum, close rates that are really high can also be signals or symptoms of other things. But obviously, super high close rates will be indicative of very different things than really low close rates.

For example, really high close rates might be telling you that:

  • Your pricing is too low and you’re leaving money on the table. You might be able to raise your prices without a commensurate impact to volumes and see a massive increase in profitability.
  • You’re not investing enough in marketing and lead generation. You could likely tolerate a bit more “waste” in your efforts to reach a bigger portion of your addressable market.
  • Your qualification criteria are too tight or too time-bound. Similar to the point above, you could likely sacrifice a little sales efficiency in the interest of effectively cultivating more prospects who aren’t quite ready.

Of course, these things could also be mutually reinforcing or contributing to each other. In other words, your pricing could be so low that the sales you win can’t generate enough profit to be able to market more broadly, or invest more in sales resources for longer-term prospect cultivation. In this case, you’ll need to approach it in a step-wise fashion—i.e. increase pricing to generate more profit before investing more in marketing and sales.

Now, I do have to point out that while it is definitely possible to have close rates that are too high, it’s a somewhat rare phenomenon. So it’s possible, but it’s not all that probable.

Still, it’s important to recognize that “low” isn’t the only signal you’ll want to pay attention to or be on the lookout for. Very often, a “high” signal can be just as telling.

Get Immediate Access To Everything In The SellingBrew Playbook

Related Resources

  • Overcoming the New Realities in B2B Sales

    Since the advent of the Internet, the B2B buying process has been changing dramatically. In this expert interview, Tom Searcy, the author of "Life After the Death of Sales," discusses how B2B sales leaders can deal with today's realities and prepare their organizations for tomorrow.

    View This Interview
  • How to Develop Real Competitive "Kill Sheets"

    Competitive kill sheets are a great tool to help salespeople in the field. But most so-called kill sheets are nothing more than glorified competitive profiles. In this concise tutorial, learn how to develop real, strategic competitive kill sheets that highlight and reinforce the competitive differences that actually matter to prospects.

    View This Tutorial
  • Arming Sales to Protect Value

    The balance of power in quoting and negotiations has clearly shifted in the buyers’ favor. In this report, we highlight seven approaches B2B companies are using right now to help their salespeople protect value and margins against today's savvy business buyers.

    View This Research
  • Strategies and Tactics for Boosting Your Close Rates

    Most B2B companies would like to improve their close rates. On nearly every sales research study ever conducted, something to the effect of "improve our win rates" shows up as a top priority or objective. But what are they really doing to make it happen?

    View This Guide