Closing Ratio measures how effective your sales staff is at making the sale. There are 2 ways to calculate this number – Contact Based or Visit Based.
# of Sales / # of Unique Contacts
# of Sales / # of Visits
The contact based approach computes closing ratio by dividing the number of sales by the number of unique contacts (or brides) that you have attempted to sell to. Whereas the Visit Based approach treats each visit as another attempt to sell. This approach uses the # of Visits as it’s denominator rather than the # of unique contacts seen.
For example, on any given week let’s say that only 1 bride visited your store and she bought a bridal gown from you. Let’s also say that it took her 2 visits that week to make a purchasing decision. The Contact Based formula would compute a closing ratio of 100% while the Visit Based approach would compute 50% since there were 2 visits.
We use the Contact Based approach in my store because it allows me to estimate the number of new leads I need to meet the sales goal. With the Contact Based approach your closing percent isn’t diluted by the visit count. For example, if I close 50% of brides, I know that in order to sell 100 bridal gowns this month, I must acquire 200 new leads.
There are a few BridalLive reports you can use to help calculate this number for you. They are the Closing Ratio (Contact Based), Closing Ratio (Appointment Based), and Marketing Stage Conversion Report.
Food for thought
What’s your store’s closing ratio?
How many new leads do you need each month to meet your sales goals?
What can you be doing now to improve your closing ratio?