Question: I'm trying to find what the target KPIs are for salespeople for closing rates. If possible, can you review those for market leads vs. LTOs?
Drew Cameron; EGIA faculty member and HVAC Sellutions Founder:
If I’m recruiting, hiring, and training a salesperson – because that’s what you have to do – I look for that person in their first year to have a closing ratio greater than 40% for all leads that they run.
The KPIs for technician lead turn-overs (LTOs) should be as high as 86%. If a tech turned over a lead that was set properly, a salesperson should be able to close at a rate as high as 86%. That’s the KPI you should shoot for.
Truth be told, I see that averaging around 60%-70% in most cases across the country for technician LTOs.
If you’re creating marketing and customers are calling on your marketing and your sales people are doing a good job of explaining what your marketing promotion is and what the benefit is to the customer, you should be closing at 50% for marketed leads.
Leads that come in through Yellow Pages – yes, they’re still out there – tend to be down at around 25%-35% close rates.
Leads that come in through your website should close at around a 40% rate.
Regardless of the type of lead, your close rate depends on the skill of your salespeople, the training they have, and their commitment to their craft.
Like I said, for first-year salespeople, their closing rate should be around 40%. For second-year salespeople, it has to be north of 50%.
I don’t like to see closing ratios over 75% because I believe you’re priced too low if that’s the case. So, I would say raise your prices and get your closing rates in line.
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