5 Simple Ways to Improve Closing Rates
Wouldn’t it be great if every lead that came in the door quickly and smoothly signed on as a customer? Of course, we all know that will never happen. Fortunately, there are a few things you can do to help ensure that the leads you do get close at a higher rate.
Qualify your leads as early as possible
It can be really frustrating when you find you are wasting a ton of time on leads that were never qualified to begin with. In fact, one primary issue with a poor close rate is being inundated with leads that either didn’t have the budget or were just “kicking the tires” and never intended to get started. In this case, you were not losing a bid to another contractor, it simply was a project that wasn't going to happen. To qualify leads, start by reviewing your website forms. Include questions that will qualify the lead for you. Are they located in your area? What is their budget? What is their timeframe? Look back over past trends for disqualified leads and see if you can include these questions in your forms. Another great way to qualify a lead is by instituting a “Project Self-Assessment” form requirement on your website. All potential clients should fill out this form to get a better idea of exactly what they are looking for. It would cover the project expectations and steps in more detail before the lead ever gets to you.
If a lead passes the form, consider offering an initial phone consultation in place of a site visit or even a proposal. Some firms have even started charging a fee for a site visit. If the lead signs on with their company, that fee is deducted from the overall charge.
Don’t ignore your highest quality leads
Not all leads are created equal. And yet, many companies fail to focus on the highest quality opportunities. What are those opportunities? Returns and referrals. In one survey, home improvement companies reported closing 53% of their leads based on existing and returning clients, and 45% of their leads based on referrals from clients.
You have a goldmine of former happy customers sitting on your computer. You should be regularly reaching out to see if they are interested in starting a new project or know someone else who might be interested. A great way to keep your company front of mind is to create an ongoing newsletter for former customers. You can include tips and tricks for home maintenance, seasonal ideas, and promotions
Respond to every inquiry within five minutes
In today’s hectic (should we say impatient?) world, speed truly is king. Multiple studies have shown that the longer it takes to reach out to a lead, the lower and lower your closing rate falls. Let’s look at some of the data:
- Firms that tried to contact potential customers within an hour were nearly seven times as likely to qualify the lead as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.
- Now considered the golden standard for response time, the “Five-Minute Rule” shows that a lead contacted within five minutes is 100x more likely to connect and 21x more likely to qualify a lead than those who wait an hour.
- 78% of prospects will convert with the first party to contact them.
It’s clear that time is of the essence. The good news is that many of your competition is not responding to leads within the timeframe that consumers expect. This gives you an advantage when you do focus on your speed to lead. You will be far more likely to connect, qualify, and close that deal.
Understand your value (and help consumers do the same!)
An important step to improving your closing ratio is to be better about helping the consumer see and understand the value you provide. You should aim to give them as much information about who you are, why you’re different, and the benefits of choosing your team for their project. This will help them make a better-informed decision on what contractor they're going to go with. This is especially important when you are facing a company who is undercutting your price point. It is critical that you help them see that price is not everything.
This is a great time to also evaluate the value you do provide. Can you sit down a list why a consumer should pay more for your service than a competitor? If not, you may need to think about moving your price point around to better fit the market value.
Don’t forget the art of the follow-up
With an effective sales follow-up process, you can build an organized, professional follow-up to leads that have received a quote, estimate, demo, or scope of project but didn’t buy. As we all know, most leads take time to close. On average only 20% of leads will close on the first contact. If you’re willing to stick it out, however, 44% of first-contact leads will eventually close with long-term follow up.
One final note
While it’s a good thing to work on improving your close rate, there are times that a high close rate can actually be a signal that something is off. Just as a very low close rate may mean your prices are too expensive, a very high close rate might mean the opposite. If you are seeing close rates that are above around 75% or so, you may want to see if your price point might be too low. Continue to track your close rate and make adjustments where needed.
| 6/8/2022 10:53:09 AM