Put that in your Pipeline and Track it: Your Sales Close Ratio

Most of our businesses have just embarked on a new set of goals. But do we know if we are on track to achieve them? I went to a BNI conference a year ago where I truly got the message  that businesses need to know their ‘closing’ ratio – the proportion of inbound contacts that actually turn into sales. [ Edited to add. It was the Referrals for Life Day, in Santa Rosa, CA. The speaker who got me thinking about all this was Sarah Owen, of the Referral Institute, UK]

My inner-statistician and outer-control-freak bellied up to the computer with barely concealed glee. ‘We’ opened a spreadsheet and data-dived for what we could find of my sales pipeline, drawing on those trusted resources – the in-box, to-do list, my calendar, saved voicemails and annotated business cards.

Over a year of use the spreadsheet  has shaken down into a daily ‘go to’:

–   Close ratio: The proportion (numbers or value) of deals that actually close
–   # Contacts  needed each month to reach sales goals
–   Where contacts come from
–   How busy the next couple months are likely to be
–   Overly healthy pipeline? Knuckle down and bring in more subs!
–   Light on incoming work? Need to get out to do a bit more networking.
–   There are also classic pipeline management columns.

Prospects in the sales process - not yet "Signed or Declined"

Prospects in the sales process – not yet “Signed or Declined”

Month by Month: After a prospects have 'signed or declined':

Month by Month: After Prospects have ‘Signed or Declined’:

The image above shows one month of data, with a close ratio of 52% (9,600/18,400) , but I can run analysis across a whole year.

So what were the benefits?

1. Close Ratio:
–   About 30% of my contacts are ‘leads’ who do not qualify as true prospects. Either my services are not right for them, or they do not have the time or budget. Most of these identify themselves on the first call. If I take 3 – 6 calls like this each month, that is fine by me – I can often refer them on to another business.
–   Over a year, my close ratio is about 50%. So I ‘lose’ about 20% of my contacts during the sales process. This is NOT fine by me  – I think more of these sales would close if I present or managed the process better.
–   If my close ratio is 50% and my sales target is $10K of business each month (“Just sayin’…” that is NOT the actual number!) then I would need an average pipeline of $20K each month.

2. Source.

This was my bonus discovery. Having a year of data for this really tells me which of my marketing is worth while. These were the sources that identified themselves:
–   BNI: Referrals from my current BNI membership and activity
–   Clients: Referrals from my current clients
–   Friends: People with no business overlap who refer business to me.
–   Local Networking: Other than BNI (Chamber of Commerce, local Web forums etc)
–   SEO: People who found me through search
–   Social Media: Prospects who contacted me because of my Social Media presence.

3. Pipeline Management
Those other columns that I do not discuss her contain the steps it takes as a contact moves from lead or referral to prospect to proposal to client.


28 replies
  1. Gazalla Gaya
    Gazalla Gaya says:

    Thank you for opening my eyes to a formal procedure. I’m going to build a spreadsheet like this one. I’m eagerly waiting for you to share with us the other columns and the steps it takes for a contact to become a client.

  2. Yvonne Hall
    Yvonne Hall says:

    SO interesting and THANK YOU for sharing the end result over a year of measuring as well as the process. Tracking your numbers is a HUGE part of #TheSNCCway and the founder of this system, Ann Evanston, speaks of this frequently on her blog and social media presence. When I was a client of SNCC this was a HUGE eye opener for me and as I progressed in the program I could actually see how my training was truly improving my exposure … and I’m so happy to now be helping others to find the same information as their SNCC coach! But now I need to implement numbers for tracking my SNCC sales ratio … and this will be perfect for me with the help of this blog!
    Yvonne Elm Hall

  3. Wendee Neilson
    Wendee Neilson says:

    Well, I’m lost.  Too much math and ratio’s for me to digest.  So without saying, I don’t know mine.  Not sure I will.  It might be good for one of my businesses if I had clients, but for my retail, I don’t think it would apply.

    • Abigail Gorton
      Abigail Gorton says:

      Oh I agree – this would be the wrong exercise for retail! And I had a really large client who advertized on TV, and had trucks in the neighborhood and ran print ads – they could not say what the one factor was that brought clients in. This is for a small consulting business, not for every business.

  4. Judy Stone-Goldman
    Judy Stone-Goldman says:

    I don’t see the comment I left before–it was showing up but now it’s gone. I said that this kind of charting makes my eyes glaze over! Maybe I’m just not there in my business yet, but the concepts are good for me to ponder. I really like that you infuse humor here and there. I can tell you are a real person, not just a number lover!

    Judy Stone-Goldman
    The Reflective Writer
    Personal-Professional Balance Through Writing

  5. Jennifer Peek
    Jennifer Peek says:

    As a recovering CPA, I laughed out loud at your whole second paragraph!  I love spreadsheets and your simple tracking log along with the information you derived is a great way to get started.  Tracking is absolutely on my short list to get started on immediately.

  6. Brandy Mychals
    Brandy Mychals says:

    I just have to tell you that I really enjoyed this post and your humor throughout it – love the title 🙂 I took this same course many years ago – what I learned from it was that my business at that time would never make the income I desired a reality – and it created the impetus for change (very valuable!). I track in my current business in a different format – it is wonderful to pay attention to where our referrals come from! Brandy 🙂

    • Abigail Gorton
      Abigail Gorton says:

      Thanks Brandy, If you are talking about The Referral Institute courses, I have taken excellent training with them which did include good pipeline tracking tools. With that said, I built this one out myself based on an open call to action before I attended the training, so I felt OK with sharing it here.

  7. Brenda Jones
    Brenda Jones says:

    I’m doing something similar in a focused accountability group that I just started with this week.  I know that I need to increase the numbers in to the pipeline to increase the numbers out.  Thinking of things this way helps me to feel better about leaving a networking group I participated in last year.  I loved all of the women and enjoyed my time, but in a year it generated no sales, no leads, no referrals, no nothing.  It did cost time, energy, money, gas, etc.  So while I was feeling guilty about no longer attending, if I look at the stats, it does not make fiscal sense to continue at that location.  Thank you for helping me to see that in the numbers rather than feeling it in the heart.

  8. Susan Berland
    Susan Berland says:

    Thanks for sharing your columns. I’m starting to do this for 2012 and I’ve overcomplicated it. This visual really helps. Question: Do you track total BNI income separately so you know what percentage of your income is from BNI?

    Susan Berland
    A Picture’s Worth

    • Abigail Gorton
      Abigail Gorton says:

      Glad you asked! This was one of the things i realized as the year went by – once a person became a client, I wanted to track referrals from them as coming from clients. So this spreadsheet only shows the tier 1 – new referrals from BNI within the current year. For those referrals, I can do the math across the whole year and see what percentage came from BNI. It is 30% plus for new referrals. And a lot of the clients on here were themselves BNI referrals a year or two ago, ao BNI is obviously more than worth the time and investment.

  9. Imogen Ragone
    Imogen Ragone says:

    Very useful information. I am not used to thinking in such detail about my business. You have inspired me to be better at tracking my business goals (and I agree, the visuals really help!).

  10. Candace C. Davenport
    Candace C. Davenport says:

    Wow- you really hit the nail on the head here with the key point of making a difference between running your business like a business as opposed to running it like a hobby. If it is a business, then you absolutely NEED to track your results. Otherwise you are just spinning your wheels. Thanks for being the hammer here as you pound on my nailhead!

    Candace Davenport
    http://www.ourlittlebooks.com ~ Little Books with a Big Message

  11. Vicki Dello Joio
    Vicki Dello Joio says:

    I feel like the tortoise, plodding behind here, though I absolutely LOVE looking at data in this way. I am starting from scratch. Although my biz has been active for over 30 years, I have only begun in this last year to treat it As a business and am looking to see how I can track and evaluate things differently, rather than just intuitively moving things along. Thanks for this. Although I can’t quite implement the types if systems you have in place, yet, I DO feel inspired to figure out what I can do. Next conversation with my business coach…

  12. Cory Zacker
    Cory Zacker says:

    Ouch, my head hurts! Just kidding, Abigail. You actually made this information very accessible and much easier for me to understand. Thanks for the visuals – they really help. I do keep referral records for my tutoring agency, but have never really given them the in-depth analysis you describe here. Another “to do” for 2012!

  13. Andrus
    Andrus says:

    Abigail, great post! You’ve really nailed sales pipeline management and proved that if you factor in the right things, you can do it simply in a spreadsheet, on post-it notes, etc.

    We’ve developed a piece of web-based software that makes the process even easier (we started with a spreadsheet 10 years ago and tried numerous CRM-s as our team grew, but so did our frustration). Would love to get your feedback on that – and happy to hook you up with a free account if you like it)

  14. Rana Shahbaz
    Rana Shahbaz says:

    Absolutely crucial data to monitor and often not easy to track. Great work Abigail if you are tracking it and learning it from this data. 

  15. Julieanne Case
    Julieanne Case says:

    I just don’t see this working for my Reconnective Healing.  Maybe I should think it would work. I absolutely detest doing this kind of thing however. 

    Julieanne CaseAlways from the heart!Reconnecting you to your Original Blueprint, Your Essence, Your Joy| Healing you from the Inside Out |Reconnective Healing | The Reconnection| Reconnective Art |http://thereconnectivehighway.com

  16. Abigail Gorton
    Abigail Gorton says:

    Jeanine, 4.5 years and it has been so so good for me and my business. This Friday Dr Misner is speaking at a local BNI meeting ( Northern CA) and I am going. If you have just joined my advice would be to go to all the training sessions even if you’re not on leadership. Of course you can borrow it! That is why I am blogging it!

  17. Maureena Bivins, PhD
    Maureena Bivins, PhD says:

    This is my year for learning how to track my business.  It’s all new to me but I understand its importance.  Your charts are very helpful, giving me some ideas of how I could adapt it to my needs.  Thanks.

  18. Cheryl McDonald
    Cheryl McDonald says:

    I really like this Abigail. It is so simple even an artist could figure it out! Now if I can just follow through, but that is a time management issue on my part. Thanks for sharing this!

  19. Anonymous
    Anonymous says:

    Wow this is quite comprehensive! Thanks so much for sharing part of your process Abigail. We have been looking at customer management systems to do this for us, but all the ones we found don’t really work. I think a simple spreadsheet might just do the trick.

    • Abigail Gorton
      Abigail Gorton says:

      Thanks! Yes – this is a system for consulting / services businesses with too many prospects to just track it and too few for a system like Act! I have got so much more information and understanding out of doing this spreadsheet than the time I put into it.

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  1. […] is where the beginning of this post and the end of my post from last week about Pipelines and the sales process come together. I figured out the information in ‘my’ spreadsheet on my own, but the rest […]

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