Ryan Dohrn explains how to calculate your real close rate by measuring results from your last 10 full presentations. He recommends targeting 70-80% for renewals and 25-30% for new business, and suggests bringing proposals to meetings to close deals faster.
Hey friends and fans, Ryan Dohrn here, your friendly neighborhood sales coach. Are you, uh, having a good week out there in sales land? It's been a really good week for me. Got a lot of contracts in. I'm pretty darn excited about that. Hey, we're answering listener questions. Keep them coming to ryan@ryandohrn.com. Here comes our next question. This is Philip up in Delaware. Hey Philip. Ryan, I'm really struggling to figure out my closing rates. You talk about them all the time. I just don't know how to figure it out. What am I doing wrong? So Philip, great question. So there really are 2 sides to the close rate equation. You've got your close rate on renewals, which is usually gonna be higher, and then you've got your close rate on brand new business, which is usually gonna be substantially lower. You wanna separate those 2 things because if you combine the 2 of them together, then you're gonna get an artificial number because your close rate on renewals is almost always gonna be higher. Okay, so from my perspective, If I was coaching and guiding you, you want to set a goal for yourself. Your renewal rate, unless you're selling something awkward or weird, your renewal rate should be pretty high if you're retaining people correctly and the product you're selling is something that is repeating and renewable. Like for example, in my business, I almost exclusively sell marketing and digital services, and so that's something that's going to renew on a regular basis. Now if you happen to be watching the podcast or listening to videos or whatever the circumstance is, I guess you'd listen to the podcast and watch the videos, and you're working with insurance or real estate or something like that, the numbers are going to be a little bit different. So this really is advice for those that are selling something kind of that you would have to resell every year. Okay, on the renewal side, in my opinion, you want to set a goal to renew about 8 in 10, about 80% of your business. You want to try to renew those that go out the door or don't renew. Only about 10% of those really should be people that just flat out You went out of business or whatever. You want to watch out for that 10% of people that aren't real happy. But if your renewal rate is lower than like 80%, if it's dropping below 50%, okay, something's, something's off in the process. And that's something that's, that's more detailed than we would have time for in this listener question to get. But you want to know your renewal rate. And my goal would be like 7 in 10 or 8 in 10, about 70, 80%. Okay. Now on the other side of the house, now what you've got is you've got new business close rate. Now, those that are really doing well out there, typically a close rate of 25 to 30%. So that means when you have 10 meetings, you close about 3 in 10. That would be 30%. That's, that's really good. That's really good out there. Now, if you're at 10%, you need to improve. 15%, you're getting there. 20%, I mean, not horrible. 25%, you're pretty normal. 30%, you're doing pretty good. If you're higher than 30% of your close rate, You're not selling what I'm selling. You're selling something highly discounted. Or gosh, maybe you should write a book and send me a copy of it because I'm pretty good at it and I sit around 30-40% on new business. Okay, so now back to the original question. The original question was, how do I figure it out? Just look back at the 10 presentations that you just made. Okay, so 10 complete clients, not if you have 5 meetings with one client and 5 meetings with another client. For 10. That's not what I mean. When you look back at the last 10 meetings you had with 10 separate clients where you actually had the ability to make the presentation you wanted and give them the proposal for consideration that they wanted, that for me is where your close rate really needs to come in. Look at the last 10 calls you made that you felt you did everything right, then determine how many of those actually closed. So if you're only closing, say, 1 in 10, then something needs to be improved. Either it's the way you're presenting, it's what you're presenting, it's a price, it's your process. I mean, it could be you. Maybe it's the questions that you're asking or not asking. Maybe it's the format that you're following. See, a lot of times something that impacts close rates dramatically— for me, my close rates are higher because I go to meetings with a proposal ready to go. I don't have to customize things. I mean, I can— I could customize the heck out of stuff. I just choose not to. I'm a recommendation-based seller. I go to a meeting with ideas ready to go. And so I believe that actually increases my close rate because I'm getting people to a point of consideration of the sale faster. If I gather information, which is taught widely out there, then I leave to create a customized proposal. I don't have any empirical data that says that works better. Than coming with information ready to go, ready to present. Now let me make just an offhand comment that some of you are going to go below and hate on me, and that, that's fine, doesn't bother me at all. I'm glad you're interacting. A lot of you believe that you cannot go to a meeting with a proposal because you have to ask them 10 questions to figure out what they want in the proposal. Unless you've never had a client like this before, you should be able to go to a meeting with ideas and pricing ready to go. As a matter of fact, my youngest buyers that I deal with— and a lot of you know I'm 50 years old, I've got a lot of younger buyers than me— my youngest buyers have taught me that I need to step up my game. I need to come with ideas ready to go. They want to know what it's gonna cost, who else has done it, and how much is it. I mean, it's a very simple process. My younger buyers have made me a better salesperson. They've made me speed up. They've made me be more efficient. So when you think about this, Philip up in Delaware, it's super important for us to be adjusting to the times as well. So when you think about your close rates, divide them into 2 groups, renewals versus new business. Calculate across the last 10 meetings that you've had where you were happy with the presentation, etc. And that's how I would potentially figure it out. Then you take your close rate And you incorporate that into your sales math to determine how many calls do you need to make to get to X number of meetings, how many meetings do you need to get to a closed deal. And once you know your sales math, you can work those numbers to your advantage. So Philip up there in Delaware, you got a bunch of extra information there that you didn't even ask for, and I hope that you find it helpful. Keep your listener questions coming to ryan@ryandohrn.com. I love to answer your questions. And we get a lot of them and I love it. Keep those questions coming. It's one of my favorite parts of my job. Love to be able to come to your office, come to your sales conference, motivate your teams. It's not that expensive. Reach out to me, friends. I love to travel and love to come to participate and get your team really pumped up. Reach out to me over at ryandohrn.com. Never forget, friends, if sales was easy, everybody'd be doing it and they're not. We're not crazy. We're the chosen few. Sales is a great job and it could change your life forever. If nothing else, it's gonna pay your bills, and when my bills are paid, I'm pretty happy as well. We'll see you next week.
