Dunvegan Blog

How to Improve your "Close Ratio"

Operating within the business-to-business, consultative sales world? Does your sales team "close" the majority of the opportunities they pursue? Meaning that more than half of the proposals/bids you submit result in new contracts?

If not, here are five possible reasons ... your sales team may be:

1. Talking to the "wrong companies".

2. Talking about the "wrong benefits"

3. Talking about the "wrong solution".

4. Talking to the "wrong" people.

5. Failing to follow-up.

What can be done to improve your company's close ratio? Let's look at each of these situations individually.

1. Talking to the "wrong companies". First you must know the profile of your "ideal customer"; the more detailed the description the better. Ideally, your profile will include the type, size and location of your "ideal customer" as well as the challenges they are facing/problems to be solved and the culture/business philosophy of the companies that are your best customers. A systematic prospect qualification process will identify companies that fit your "ideal customer profile" in terms of needs, wants, readiness and ability to purchase. This process can be implemented through your inbound call center or through outbound calls to prospects. Prospects who do not fit your ideal profile can be directed to alternate sources leaving your sales team to focus on qualified Ideal customer prospects. Prospects who do fit your ideal profile but are not yet "ready" can be nurtured through automated processes until the time is "right".

2. Talking about the "wrong benefits". A preliminary assessment of the prospects objectives can be performed during either inbound or outbound calls with the prospect. When the prospect's profile matches that of your "ideal customer" AND the prospect's needs, wants, willingness and ability to pay, can be met by deploying the benefits of your solution, the probability of closing the sale is enhanced.

3. Talking about the "wrong solution". The information gathered through the qualification process should identify the prospect's specific needs/wants as well as the available budget ~ the sales team is responsible for matching the best solution to the needs/wants and budget. Your solution may not be the best solution for the prospect - better to opt out than persist in trying to sell them.

4. Talking to the "wrong" people. This can be a delicate problem to solve. Often the people who call your Contact Center have been assigned the task of information gathering only and they may have little or no authority in the actual bid/RFP evaluation. A critical element of the qualification process must be to identify the key individuals who will be involved in the decision, what level of authority they have and what their specific roles will be.

5. Failing to follow-up. Prospects expect that your sales team will follow-up to answer questions, to demonstrate your interest in their business. How your team treats the prospect during the bid/RFP process tells the prospect what they can expect once they become a customer.

To diagnose the specific areas for improvement within your own organization, you may consider a Wins and Losses Analysis where prospects are asked for their perspective on the process and how it could have been improved. Through conversations with your prospects, the reasons for winning and for losing new business opportunities can be determined and processes developed to address the challenges.

Having well organized and active qualification and nurturing processes will put "warm and ready" ideal customer prospects, in the hands of your sales team for development.

Having systematic processes for matching your solutions with the prospect's wants, needs, willingness and ability to pay will improve the likelihood of success in securing the business.

With increased efficiency, your sales team will have time to ensure that every RFP/bid submission is followed-up with the prospect.

As you can see, improving your "close ratio" is a multi-faceted, continuous process and should be viewed in the context of building long-term, competitor resistant relationships with companies and individuals who fit your "ideal customer" profile.

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Does your company's mission reflect your ideal customer?

Whether we think of your company's mission as a statement of the problem in the marketplace that your company exists to solve, or a statement of why your company exists, without customers to exchange money for your solution, your company will not succeed. Many a business has failed by focusing on producing a product or service to solve a problem that customers either did not know they had, or did not care to solve at that moment. Or on the flip side, offering the solution to a broad market when a very specific niche would have been more ideal.

Customers can be fickle and they can change their minds rapidly; what they think they want on Monday is discarded on Tuesday when the cost of the solution exceeds the value they think they will receive.

It is imperative that you have an on-going dialogue or conversation with your customers to keep up with their changing needs and expectations. Notice the reference to "keeping up with ... expectations"  rather than "exceeding expectations". What customers expect is that you will be there with the right product or service to solve their "problem" or fulfill their "want", at the moment it emerges - there is no need for you to exceed their expectations or provide them with something they did not expect. Remember, the minute we have an experience, it becomes entrenched in our expectations and thus, you will exceed any given customer's expectations only once.

Every business would agree that the cost of securing a new customer far exceeds the cost to keep a customer with whom you already have a relationship. The estimates range from 5 times the cost to well over ten times as much to acquire a new customer.

So, one would think that the customers with whom you already have a relationship would be treated like golden assets. And that these golden assets would be seen as the fundamental reason the company exists.

Your mission statement - the statement of why your company exists - needs to reflect:

  • Who you serve - who is your ideal customer
  • The problem you solve or want you fulfill
  • How your solution is better than other solutions available

 Above all, your mission needs to emphasize the value you place on the customers who place their trust in you!

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Customer Satisfaction, Customer Retention and Company Vision

Should your company vision focus on your customers? Or should you have a distinct vision for customer care?

Most company visions are internally focused … for example, “To be the best ____” or “To be the biggest ___”, or “To be recognized as _________”, without reflecting the company’s greatest asset – its customers – as a vital component of success.

As you build your business – growing customers and revenues – you will soon discover that a good part of your time, energy and money will be expended to simply “hold your position”. Whatever your customer churn level, you must constantly replace lost business BEFORE you can grow.

When you reduce the churn, you reduce the effort required to stand still. When you reduce the churn, you reduce the cost of replacement. When you reduce the churn, your employee engagement is likely to increase as they see relationships as more than transactions. When you reduce the churn you inevitably improve customer advocacy.

To get your organization to a higher level of performance with higher customer satisfaction, and improved customer retention, you – the business leader – will need to develop and demonstrate a specific vision of customer care and inspire your employees to make the customer your primary focus.

Your customer care vision will need to include:

  • Your determination to know your customer – his needs, wants and expectations, his role in buying decisions, his demographics or firmographics
  • Your desire to create positive customer experiences and customer satisfaction with the organization’s products and services, including graceful problem resolution
  • Your dedication to building long-term relationships with your customers – relationships that will bring the customers back time and time again.
  • Your commitment to ensuring that your customers are willing to advocate for the organization – voluntarily referring more and more customers.

 

No matter who your customers are – patients, students, members, citizens, clients – it’s your organization’s top leadership that must spearhead the customer care and customer retention process. By “top” leadership, I truly mean the top – most often this leader will have a C-suite title like CEO, COO or CFO.

It is imperative for top leadership to be as committed to customer care and customer retention as you are to the bottom line – a distinct vision for customer care is a sound way to show your commitment.

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Are your customer relationships competitor-resistant?

At the Business Marketing Association Conference in Chicago May 2013, I introduced The Dunvegan Group’s next generation model for identifying, developing and nurturing competitor-resistant customer relationships.

Through analyses of individual customer ratings, compared to their renewal behavior, I showed the 800 Business Marketers in attendance the power of The Dunvegan Affinity Rating in diagnosing the strength of customer relationships based on customer:

  • Perceptions of service excellence,
  • Perceptions of the competitive environment,
  • ‘Pain tolerance’, as well as
  • Willingness to provide a referral.

My recent book, “The Bottom Line on Customer Retention: It pays to care!” outlines the design and testing process undertaken to develop our model and performance indicators over the last 10 years; as you will learn, The Dunvegan System goes well beyond diagnosis and provides prescriptive action to repair, maintain and leverage your B2B customer relationships.

We have a better solution, one that provides a very clear picture of the strength of the customer relationship based on an open dialogue with customers. The Dunvegan Affinity Rating™ has already been adopted by several of North America’s Fortune 500 and they are achieving higher customer retention and overall stronger customer relationships  – isn’t it time for you to find out more?

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Customer Experience Tip #54

Focus on improving.

Study and learn the best practices in customer care for your industry – then look at other industries. Remember, customers will compare your performance to your competitors AND to other types of companies they do business with.

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Customer Experience Tip #53

Care. Really care.

Feeling and showing that you are concerned about the customer’s needs is the first indication that you care about them. Hold the door open. Help them with their coat. Detach a shopping cart from the lineup rather than letting them struggle.

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Customer Experience Tip #52

Keep focused.

You know what you want in your business and from your business. Keep focused on the direction YOU want your business to go in. Don’t try to expand to encompass what others think you need for your business. You can’t cover all the bases.

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Customer Experience Tip #51

Look ‘em in the eye.

If you don’t stop and make eye contact with the customer you are speaking to, you let them know that you really don’t care. Think about the restaurant server who asks about the meal and doesn’t even look at you as they rush by!

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Customer Experience Tip #50

Under promise and over deliver!

Customers tell us, “You don’t have to “exceed” my expectations – just meet them and I will be wowed!” If you deliver a little something more – through your smile and your attitude and appreciation for their business – you will have gone the extra mile!

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Customer Experience Tip #49

Follow up.

When a customer has engaged with you – whether they made a purchase or not – follow-up and let them know you care. When a customer has inquired about a product or service, be sure to record that information so you can start the conversation on a relevant note.

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