KPI of the Week: Quote to Close Ratio

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Quote to close is a KPI used to determine what percentage of customers a business has contact with and actually make a purchase. It is measured by dividing the actual customers or clients who made a purchase by the number of prospects contacted or to the number of potential customers who visited the business. If the business talked to 100 prospects in a month and 12 of those prospects made a purchase, then the quote to close ratio would be 12%.

The ideal quote to close ratio is determined by the company’s industry. Businesses in the entertainment industry or food service industry have a higher quote to close ratio than a business that sells cars or appliances. Measuring the company’s ratio against other companies in the same industry determines how well it is closing its sales versus its competitors. A higher percentage indicates a greater ability to close a sale. It is also important to track the company’s ratios from month to month to establish a trend. If the trend indicates the ratio is decreasing, the company needs to determine why and take steps to resolve it.

Many businesses concentrate on its salespeople’s effort to try to improve results. Investing in a company’s sales staff by providing them with training in both sales techniques and people skills is a good way to improve the quote to close ratio. However, the advertising and promotions that brought the customer to the business also play a role. Marketing and promotional efforts need to bring in the right customers and be in line with the overall objective the company is trying to achieve. Sales and marketing staff need to work together to match the company’s products with the needs of the potential clients.

Contact Porte Brown to obtain more information on selecting the best KPIs to track your organization.

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