Apple&OrangeIn the world of cabinets, sales that close are the ones that count, right? Because the sales that close are the sales that bring you money and pay the bills. Then why are cabinet dealers still calculating closing ratios with the wrong numbers? There are dealers out there who have, in the economic downturn, confused quotes won and quotes lost with those that haven’t been completed yet; but they’re still counting them when they are calculating their closing ratio. It’s madness we tell you! Madness!

A Simple Misunderstanding

It’s a simple common mistake that most dealers are counting every quote in the system when they calculate their ratios, and we are here to clear up the confusion. As an owner, you should be looking at completed quotes that have either been won or lost. Everything that’s in between needs to be taken out of your calculation.

So our math equation is: closing ratio = #closes won/# total quotes won or lost

Apples and Oranges

Another mystifying idea we’ve seen is that dealers are counting foot traffic in their closing ratio (we hope there are fewer of you out there after this post). Under the assumption that anyone who walks into the showroom should become a customer, salespeople and dealers alike are counting tire kickers, prospects in the greenhouse phase and just the random mid-afternoon wanderer as quotes.

Again with the madness! If you start counting foot traffic against your closing ratio, you are going to have numbers so low you’ll wonder if anyone was even in the showroom that day. It’s really a case of comparing apples and oranges because you haven’t given your salespeople the chance to close the quote out there, yet you’re counting it against them.

A Defined Line

We say there is a much defined line between your closing ratios and everything else that goes on with customers, quotes and leads. You’ve got to get down to the base numbers of wins versus losses to see where things need to change and how you should move forward. If you’ve got a salesperson performing at an 80% close rate and another performing at 40%, you know that it’s not based on luck that this is happening.

By having the right numbers to compare salespeople by, you are opening yourself up to prepare lower performing salespeople with the information and tools they need to start performing at 80%.

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