Close Rates vs. Outbound Calls

Selling Technique: How many outbound calls does it take to close a deal?

Learn how to determine your close rate
Home - USReference Sales Training Free Internet Advertising Been There - Done That eBook
Internet Web Design Resource Internet Reference Resource Free SEO eBook

About

Newsletter

Your Name:*
Your Email:*


How many outbound phone calls really need to be made?

2007 David Peterson

Sometimes I think I'm talking to myself. I try to get job candidates to understand that in my type of sales environment you have to keep calling. That's because in my sales environment you have to actually sell. It's not like selling Honda Accords to people who walk up on the lot and say "I want you to give me a blue one."  

I almost try to scare candidates out of the job. I often say in the interview... "When you leave here go home and think about it, do you really want to make this many calls?"

Why do all new job candidates say...? "You have to keep smiling and dialing...," or have you ever heard "absolutely I can make 100 calls a day...," or my all time favorite "I will make as many as it takes..." 

I'll press the job candidate... "Have you ever made 100 calls a day - everyday? Do you know what that feels like?"  Always the answer is the same - "Yes, I understand what it takes."

Here is why I press so hard, trying to get a commitment from a job candidate - I know my close rates! I have history on my side that says if you do "x" amount of outbound calls "y" will happen. In a previous article I wrote that Sales is absolutely a numbers game. I know with certainty what those numbers are. I know that it really does take 100 calls to make a sale.

I know my close rates!

Now not everyone has the same sales skills. I will grant you that, but everyone has a close rate. The goal is to know what that close rate is. 

Let's take a step back, what is a close rate?

A close rate is the total amount of calls it takes to close one deal. 

I am writing about prospecting calls. How many prospects must I talk to in order to secure one sale? In order to have a prospect you must have a decision maker. 

You have to focus on prospecting calls. When representatives start to fail they will often say "Well I'm making my calls." I'll agree they are making calls but they are making follow-up calls to their current lead base. Eventually you will run out of leads so you have to continue to prospect. You have to prospect even when you blowing out your sales numbers.

No prospects, no leads - no leads, no sales!

It seems so simple to me that I feel silly repeating it to the reps. Yet if I don't repeat it they will literally stop make the required number of calls.

What is the required number of calls to close a deal? (i.e.: What is the close rate?) 

Let me work through the math to show you just how easy it is to figure out.

To get to the close rate number just take the average number of deals your team closes in a month and then divide that by the number of decision makers (prospects) reached. 

Example:

15 units sold per month / 500 decision makers reached = 3% Close Rate or sales  to prospects

So in this example I need to reach 500 decision makers in a month to close 15 deals.

How many decision makers do I need to call everyday?

Example:

500 decision makers / 22 business days = 22.73 decision makers each business day

Now for the hard part... How many outbound calls does it take to reach one decision maker? Again just look at your team's history. The team averages "x" amount of calls and they have determined that they plan on following up with "y" amount of decision makers.

Example:

500 decision makers reached / 2,000 total calls made = 25% Close Rate of prospects to total calls

Last step.....

15 total units sold per month / 2,000 total calls made = 0.75% Close Rate of units sold to total calls made in the month

To sum it all up: The rep needs to make 2,000 calls in order to get 500 decision makers which will lead to 15 units sold.

I'm going to show you an even simpler way so you can stare that rep right in the eye and say "go make "x" calls and "y" sales will happen."

Follow this scenario: 

"Jimmy I need 15 units from you this month - no exceptions! You tell me - how are you going to sell 15 units? I need to know right now how many calls you need to make to hit that number!" 

At this point the average rep says something stupid like... "As many as it takes Mr. Smith." But Jimmy knows his close rate. He knows how many units Mr. Smith wants and he just has to figure out the math to determine how many calls to make.

Luckily the math is pretty simple if you know your close rates. 

Example:

15 Total Number of Units Needed / 0.75% Total Call Close Rate = 2,000 total calls!

PS: For this math to work you either A: Have to use the % sign when you do the math on a calculator or B: You have to understand that 0.75% is actually 0.0075  (15 / 0.0075 = 2,000)

Now that you know how to figure your close rate and how to use it to determine the total number of calls needed you should be able to walk into the office and say with confidence..."Go make "x" calls and "y" will happen!"

There is no denying the numbers in sales. Each rep will probably have a slightly different close rate. My advice is to track the team's numbers and use that as a starting point.

Once you get the starting point then start comparing that to your individual performers. 

The good news is that once you actually know your close rates you can absolutely hit any number thrown your way - unless of course you don't have enough people to make that many calls - which is why you were interviewing the job candidates in the first place.

Sincerely,

David Peterson

David Peterson

Author of: 

Been There - Done That

David Peterson's Search Engine Optimization Guide

Please send all correspondence to: questions@usreference.com

Purchase

Been There - Done That

Today

 

BEFORE

YOU START A HOME-BASED INTERNET BUSINESS

This eBook is filled with actual case studies that will show you the mistakes that can happen when starting a business. Why make these same mistakes that I already have made ! Save yourself the time, energy, and money.

GIVE YOUR BUSINESS A CHANCE

Order Now!

Been There - Done That by David Peterson

 

FREE

David Peterson's Search Engine Optimization Guide for the Beginning Webmaster is a MUST read!

Do you have unlimited funds to spend on Pay Per Click Advertising?

PROBABLY NOT!

 Get your free copy of David Peterson's SEO guide by clicking here.

David Peterson's Search Engine Opitimization Guide