Ask the Experts | How to Grow Closing Rates

Question: My salespeople close at about 35-40%. I really feel they’re wasting a lot of my leads. I pay them good commission. Do you have any ideas on how to get my closing rates higher?

Weldon Long, New York Times Bestselling Author:

Yes. Yes, I do. I have many ideas, and I’m sure Drew and Gary do as well. There’s a couple of things in the questions that jump out at me. Number one, I hope we’re talking about marketed leads here. Because if we’re closing 35-40% of marketed leads, you’re at least in the right conversation. If we’re talking tech turnover leads, you’re getting destroyed, so I hope we’re talking about marketed leads. I would say a reasonable goal for marketed leads would be 45-50% -- that would be an attainable goal on marketed leads, so 35-40% would be a little low.

So here’s the thing that jumps out to me: “I pay my guys good commission,” I would love to know more about exactly what that means. And here’s why I say this: I was talking to a client a week or so ago, and he was talking about another company that’s still paying their sales commissions (to their guys) a flat 10% off the revenue of the deal. Regardless of the margin, regardless of the profitability, the sales guy gets 10%. So a person with a compensation system set up like that does not have a huge incentive to worry about selling a ton of deals, cause they’re going to get 10%, they’re going to drop off bids and get three or four out of ten. And if they’re getting a flat 10%, they can drop their price, drop off cheap bids, and still get $100, 000 or $150,000 a year.

So when you say good commission, I’d love to know a little more about what that means exactly, because I think the commissions drive a lot of behaviors in terms of converting sales. If you’re paying your guys based on the gross margin of the deal, and they’re really dropping their prices, they’re going to pay the price for that in their commissions also. So their commissions are going to be diminished, which gives them incentive to go out and close a couple more deals.

If they sell a deal for $10,000 that should have been sold for $15,000, and they still make $1,000, they don’t have a ton of incentive to go out and close the next deal. They just keep going out and dropping bids off it’s going to work out for them. So I would just make sure your compensation system is set up to drive the behaviors you want.

Other than that, it’s just so broad; again, it gets back to everything we’ve talked about today. 35-40% is low on marketed leads; it’s disastrously low on tech turnover leads. But the bottom line is they have to have a sales process, right? It can be EGIA’s process, it can be Airtime’s process, it can be Nexstar’s process, it can be anybody’s process, but they have to have a process.

The reality is the sales fundamentals are pretty much routine and fundamental, there are some nuances here and there and different things people have, but if they’re following a sales process, and in my mind a sales process consists of four major components: Build a relationship, investigate the problem, solve the problem, ask for the sale.

As long as you’re doing those things, then you’re following a sale process. Now there are a lot of things you can do to enhance the relationship-building, a lot of techniques you can learn to do the investigation, a lot of different things you can learn to get better than that, but the four components need to be there. If your’e not doing one of those four or two of those four, then you’re missing out on some of the basic fundamentals. So any sales process is going to make sure you’re hitting those four fundamentals somewhere along the line. Maybe in different orders, maybe different emphases, but they’re going to make sure you’re hitting it somewhere along the line.

So what I would suggest – and obviously you’re an EGIA member if you’re on this call – we have an online program that’s kind of an introductory sales 101 program, which is our core training. Drew and his crew are working on an advanced training, kind of a sales 201 which will be taught around the country later this year and in 2020. So send your people to those trainings. Take the online version, or attend one of the live trainings, and attend the advanced next year, whatever it is. But you gotta get the training, you have to get a process that your people are buying into and using. Listen, I don’t mean to oversimplify here, but as I write about in my books, a consistent sales process delivers consistent results. Random sales results come from random sales activities, it’s not rocket science.

So we’ve got to have some kind of process that we’re using. 35-40% … I’d love to know what the average ticket is, because that would impact my opinion on this as well. But it seems a little bit low even on marketed leads, 45-50% should be our target, and probably 65-75% on tech turnover leads, depending on – some companies turnover less quality leads within their own company because they’re going for volume rather than quality, based on the decision the owners make.

But, “any ideas how to get my closing rates higher?” Yeah. Attend the training online, attend the training live, read books, study, practice, roleplay, roleplay, roleplay. When you get done with that, roleplay some more. It’s just the basics, it’s the fundamentals, it’s the blocking and tackling of business and sales. With that I’ll turn it over to Drew who’s only been selling in this industry about 30-35 years, so probably has some pretty good insight.

This is the weekly Ask the Experts free excerpt. To listen to all of this week's call, or to see the schedule and register for future calls, click here.