Handle assists with measuring speed to close in addition to sales ratios to improve sales efficiency.
Most organizations track salespeople’s close ratios, or how many sales were achieved in a given time period, but they rarely look at the speed to close, or how long it took to make the sale.
While it’s essential to know how many deals your salespeople are closing, it can be difficult to coach people on selling more. What can be easier is identifying where they get hung up in the sales process so you can coach them on how to increase their speed of sale.
For example, if a salesperson has to make call after call after call to close, do you want them to continue with their current strategy? Or, would it be better to coach them on how to improve the quality of their calls so they can close sales faster?
That’s why with Handle you can configure your pipeline dashboard based on the speed of close. The goal is to know what’s been opened and closed within a timeframe to exclude quotes or deals that were started outside of that time frame. This helps you see and understand how fast you’re opening and closing things.
Knowing how fast a salesperson or team is closing sales can help you:
- Track and forecast sales more accurately
- Evaluate the length of the sales cycle by individual
- Spot high-performing salespeople and effective strategies
- Identify coaching opportunities for your sales team
- Close deals faster and generate more revenue
- Improve customer experienc e during the sales process
Analyzing Closed Sales vs Speed of Sale
Configuring your pipeline by closed sales within a specific time frame is a classic way to view sales transactions. But the information this provides isn’t always enough because it doesn’t tell you how to improve or make a salesperson or the sales team more efficient.
Only looking at how much was sold in a specific time period might lead to:
- Asking salespeople for more of the same: more inefficient calls.
- This doesn’t guarantee better results.
- Plus, more calls may not be feasible based on time constraints.
But, if you configure your pipeline dashboard based on the speed of close, you can focus on what a salesperson is creating and closing within the same time period to identify bottlenecks.
Pipeline dashboard configured to measure speed to sale
This data can help you understand and identify:
- Who your top salespeople are and their sales strategies and techniques.
- Who your low performers are and opportunities for helping them.
If you feel that you would do things differently on sales calls with customers, or that you could move things along faster and do it better yourself, looking at your team’s speed-to-close metrics can help you understand how you can help your salespeople reach their sales potential.
This metric can help you diagnose your salespeople’s efficiency.
Measuring Speed to Close: Required Data
To start tracking the speed-to-close ratio for your sales team, your salespeople only need to enter minimal data into Handle.
We recommend tracking these three different statuses:
- Won sales
- Lost sales
- No purchases
This allows you to track the time it took to get to those statuses, so you not only know the close ratio but also how long it took to get to the sale.
This basic data can help you determine whether an individual salesperson or the entire sales team is taking longer than average (or desired) to close a sale. From there, you can start to dial in your coaching.
Calculating Your Close Ratio
The formula for calculating your close ratio is:
Closed Ratio = Won / (Won + Lost + No-Purchase + Quotes)
Won refers to the number of deals you won in a specified time frame.
Lost refers to a prospect who bought a competitive product or they bought the same product from somebody else.
Quotes refer to deals that are still in the quoted stage.
No-purchase means they chose not to buy anything. Some organizations like to include this in their calculations. Others prefer to exclude it because they figure the deal wasn’t lost if the prospect was just tire-kicking and didn’t intend to buy anything.
With that in mind, you have a few options for handling no-purchase:
- Include it.
- Exclude it.
- Calculate two ratios: one with and one without no-purchase.
Advanced Pipeline Reporting Filter Options
Handle’s dashboard tiles are entirely customizable and can be configured based on what’s most important to your organization’s sales goals.
View of customizing a tile with your search parameters
Below, we’ll show you some examples of how you can filter the dashboard tiles that will allow you to measure speed-to-close based on certain parameters.
Filtering by a Specific Time Frame
View of pipeline filtered by a specific time frame
Configuring your pipeline by time periods — usually 7 days, 30 days, and 60 days — is a classic way to view speed-to-close data.
With this data, you can determine an individual salesperson’s or the entire sales team’s sweet spot for closing, i.e., the average number of days to close a sale.
In this view, you’ll most likely see that close ratios are lower at 7 days than 30 because deals take more than 7 days to close. Generally, somewhere in the middle is your sweet spot.
This data can help you identify outliers, or salespeople who are closing above the speed-to-close average and those who are selling below average. Then, you can start asking important questions, like, Are the individuals who are selling slower following up enough?
Keep in mind, it can be helpful to vary the time period of your calculations. For instance, 7, 30, and 60 days are common, but you could use any variation. By using your own time frames and playing with the outcomes, you can gain a deeper understanding of what’s happening at different points in the pipeline.
Filtering by Quote Date vs Close Date
Another way you can filter your speed-to-close ratio is by quote vs close date. Depending on your goals, you can choose to include or exclude no-purchases in your closed ratio formula.
View of Pipeline Date Analysis
Filtering by Product Segment
In Handle, you can create dashboard tiles that show the minimum, maximum, and average number of days it takes an individual to close, starting at the quote date of a sale.
Pipeline view starting at the quote date of sale
At some point, you may want to know if an individual’s or your team’s speed-to-close ratio changes based on the product type. This data can help you understand your top products and how quickly each of them sells, letting you determine where you should focus your sales efforts.
You can filter just by the product type, or the product type within a certain time frame (7 days, 30 days, or 60 days).
Create Tiles to Track the Speed to Close
You can also set up the tiles to calculate the average, maximum, and median number of days it takes somebody to close. These tiles are based on the formula above, and it shows the minimum standard deviation variance.
Zoomed in view of a tile filtered for standard deviation, mode etc
For more advanced pipeline reporting examples or assistance configuring your own Handle pipeline, contact us at https://texadasoftware.com/support/ today. We can help you design a pipeline, show examples of what’s possible, and even make suggestions based on your unique situation.