Qualifying Proficiency Determines Closing Efficiency

Problem:  Salespeople spend far too much time preparing proposals and close far too few.  Of course, closing rates vary, but closing only 15-20% of the proposals one makes is not uncommon.  This is obviously very inefficient, causing time management problems, feelings of rejection, futility, and despondence, not to mention reduced sales and lower commissions.

Diagnosis:  Salespeople have been brainwashed over the years to believe that selling is a numbers game and that “if you throw enough stuff against the wall, some of it will stick.”  They believe that more is better and are eager to propose to virtually anyone who expresses even modest interest in their product or service.  They delude themselves into thinking that any business is good and that they are successful because there is a lot of activity going on.  Well, the last time we checked, no one got paid a commission for doing a proposal and the number of proposals on the street was not a line item on the company’s P & L or Balance Sheet.  Your banker certainly won’t give you a loan based on proposal activity.

Solution:  There’s a direct relationship between the qualifying effort and the closing ratio.  Studies show that in a complex sale the best investigators are the best closers.  Never make a proposal unless you are confident that you’ve got at least a 80% chance of closing the deal.  This requires you to do a world-class job of qualifying.  Nothing less will do.  You must have a clear understanding of exactly what problems or pains your prospect expects you to provide s to, understand completely how much they’re willing to invest with you to fix the problems (assuming they’re convinced your s are viable), and you must be talking with the decision maker.  Finally, you must obtain a commitment from them before making the proposal.  If you can manage to accomplish this, your closing rate will soar and so will your commissions.