What a Low Win Rate Really Means About Your Sales Team
Few sales leaders would say they’re satisfied with their win rate. In fact, according to research, the average win rate per sales rep is just 47%. The question is, is your low win rate due to poor lead and opportunity qualification, below par closing skills, or a lack of product knowledge?
Searching for the root cause of declining or stagnant win rates can be an incredibly frustrating process. Most sales leaders will refer to their KPI dashboard in trying to solve this problem. However, looking at your sales KPIs alone will only surface the symptoms, not the root cause.
The secret to improving your win rates is to get to the root of the problem. This article helps sales leaders address the issue of declining or stagnant win rates.
What is Win Rate and Why Does it Matter?
A win rate is a key performance indicator commonly used by B2B sales teams to measure how good their account executives are at closing sales opportunities. This is typically calculated by looking at a rep’s total closed won opportunities divided by the number of closed opportunities for a given time period.
When a company seeks to identify the root causes of lost deals, an important factor to examine is the ratio of closed won to closed lost deals. From this ratio, you can find the percentage of opportunities that the company actually won.
A win rate is often used interchangeably with the term ‘close rate’, although there is a small difference. While the close rate looks at all opportunities created, the win rate only takes into account closed opportunities.
Focus on close rates if your sales team has clear and consistent opportunity-qualification criteria and your reps consistently apply these criteria when creating opportunities. However, you should be looking at win rates if, like most sales leaders, you have weekly pipeline reviews with your team to flush out old opportunities or opportunities that are significantly longer than your average sales cycle.
Who is REALLY Closing the Most Deals?
A sales leader at a SaaS company with 22 account executives and 8 inside sales reps was frustrated with her team’s win rates. They had been hovering at 23-25% for the last 24 months. Was it a lead source, territory, or behavioral issue? But the quality of her CRM data was even more frustrating, so she turned to Cien to help her understand the factors that were driving her team’s win rate.
At the end of the quarter, her best sales rep, Andy, had closed six deals and her second best rep, Melissa, had closed four. Looking at her standard sales dashboards, it was clear that Andy had a higher win rate than Melissa, yet she felt that his work ethic, communication skills and product knowledge were significantly lower.
With Cien’s Hidden Revenue Assessment, this sales leader learned that when measuring her team’s individual win rates, it was important to take into account that Andy was given 12 ‘easy’ opportunities and Melissa had been given five ‘hard’ opportunities. Given that Melissa’s opportunities were more qualified than Andy’s, and taking into account how much additional effort, time, and skill was required to close her deals, Melissa actually had a greater closing ability than Andy.
Ensuring that each rep develops sufficient closing ability is essential to achieve the highest possible win rate.
For this sales team, their low win rates indicated that the company was not qualifying their opportunities well enough, not engaging effectively with their prospects, and not prioritizing their coaching efforts on their reps’ greatest weaknesses.
Get to the root cause of low win rates
What this sales leader learned was that working on your team’s closing skills is a huge factor when it comes to improving a team’s win rates, and not all the reps in her team needed the same coaching and support. In fact, other members of her team grew their win rates by addressing other causes or focusing on other skills and attributes. These include:
- Poor lead and opportunity qualification
- Poor prospecting or opportunity qualification
- Poor engagement and communication skills
- Insufficient stakeholder mapping and single threaded deals
- Insufficient product knowledge
All of these potential causes can be overwhelming when trying to decipher which is impacting your team’s win rate.
Not sure where to begin? Start by requesting Cien’s Free Hidden Revenue Assessment which applies 100+ AI models to your CRM data to identify the root causes behind your company’s low win rates.