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Small Changes, Big Impact: The Power of Improving Your Closing Rate · Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint

• 0:01
  Hello and welcome to the show. Today I'd like us to look at how
• 0:04
  to improve your closing rate. So let's start off by defining
• 0:09
  what is a closing rate in the 1st place.
• 0:11
  Now a closing rate is just the number of people who buy or pay
• 0:16
  a deposit or write you a cheque or issue APO number or whatever
• 0:21
  it is that you do in your business before revenue comes
• 0:24
  in. So if you talk to 10 people and
• 0:31
  then two people buy, then your conversion rate is 20% if you're
• 0:36
  measuring it in 10s. But then if we're measuring it
• 0:40
  in hundreds and you talk to 100 people and then two people buy,
• 0:46
  then your conversion rate in that case is 2%.
• 0:50
  So it's not the absolute number of people that you do business
• 0:54
  with. So it's not about whether you're
• 0:56
  doing business with two people every month, it's also in
• 1:00
  relation to how many people came in contact with you for the
• 1:04
  whole month. So if you do business with two
• 1:07
  people every month, but then this month 10 people came in
• 1:11
  touch with you, then your conversion rate was 20%.
• 1:14
  But then if next month you do business with two, but 100
• 1:17
  people came to you, then you might think business was still
• 1:20
  the same, but actually it wasn't because your conversion rate
• 1:23
  dropped from 10% all the way down to 2%.
• 1:27
  So once again, your closing rate is the number of people who buy,
• 1:31
  the number of people who pay a deposit, the number of people
• 1:34
  who send you a cheque, the number of people who pinged you
• 1:37
  a transfer, the number of people who issue APO number or whatever
• 1:41
  it is that you have to do before you get the number, the money
• 1:45
  into your account. So we take the number of people
• 1:49
  that have paid and given us a deposit and then we look at that
• 1:54
  relative to the number of people who came in touch with us in a
• 1:57
  given time frame. So usually we measure it in 10s
• 2:01
  or in hundreds. I haven't come across anyone who
• 2:04
  measures the closing rates in thousands.
• 2:07
  And that's because when we're talking about conversion rates,
• 2:09
  we're usually talking about one person and his ability to or his
• 2:13
  or her ability to close the sale.
• 2:16
  So in 10s or in hundreds. And that's how you calculate it.
• 2:21
  Now, why is this number important?
• 2:24
  And why do we sales people pay attention to this?
• 2:27
  If you have a manager, why is your manager interested in what
• 2:31
  your closing rate is? Excuse me?
• 2:36
  So the reason why the conversion rate is impossible and sorry,
• 2:40
  not impossible important. And the reason why people pay
• 2:42
  attention to this is because it helps you figure out how
• 2:47
  efficient you are at the sale. So let's remember the first
• 2:50
  example that I came up with. If you did business with two
• 2:54
  people in January and two people in February and you think all is
• 2:58
  well, actually it's not the case because two people in January,
• 3:03
  if 10 people came across you conversion, sorry, closing rate
• 3:06
  was 2 out of 10 is 20%. But then if you did lots of
• 3:13
  advertising and then 100 people came in in the month of
• 3:16
  February, but he still ended up doing business with two of them.
• 3:21
  In this case, conversion rate has gone down because if the
• 3:25
  conversion rate was the same and you do business with two people
• 3:32
  out of 10, when you get 100 customers, you're actually
• 3:35
  supposed to be doing business with 20 instead of two.
• 3:40
  So when you look at the closing rates, it's a sign about where
• 3:44
  there is a problem. So in January the closing rate
• 3:47
  was 20% and in February closing rate was 2%.
• 3:52
  That means we need to figure out something is going wrong.
• 3:55
  Maybe the advertising is bringing us the wrong number of
• 3:57
  people, or maybe we need to increase the training of our
• 4:01
  sales staff so they can learn how to close more deals.
• 4:03
  It could be a sign that something is going wrong.
• 4:06
  And so that's the reason why it's important to track these
• 4:09
  figures. So, you know, how efficient are
• 4:11
  you at selling and for your manager or for the business
• 4:14
  owner, the person is going to be able to figure out what is it
• 4:16
  that is going on? Why are we losing money?
• 4:19
  Why are we losing clients? Now there are a few other
• 4:22
  questions that I'd like to tackle because we measure this
• 4:25
  in 10s and in hundreds. There are some people who assume
• 4:29
  that 100% is possible. So let me answer that question.
• 4:33
  Is it possible to have a closing rate of 100%?
• 4:36
  The answer is a capital NO. It is not possible to have 100%
• 4:43
  closing rate, so don't even try. The reason why is because there
• 4:47
  is no way in the world that everybody you spoke to this week
• 4:52
  or this month wants what you have.
• 4:55
  There's no way that everybody needs what you have.
• 4:59
  There's no way that everybody can afford what you have.
• 5:03
  And The thing is, even if people want it, they need it.
• 5:05
  They can afford it. There's not everybody who is in
• 5:07
  a sense of urgency and who needs the thing right now.
• 5:11
  So 100% closing rate is not possible.
• 5:16
  Even if you sell water, 100% closing rate is not possible
• 5:21
  because not everybody wants water now.
• 5:24
  Not everybody needs water now. Some people can't afford the
• 5:28
  water that you sell. Even if you sell pure water.
• 5:31
  There are some people who cannot afford pure water.
• 5:33
  And then even for the person who wants it, who needs it, and who
• 5:37
  affords it, sometimes you catch them at the wrong time and there
• 5:41
  is no urgency. There's a want, there's a need,
• 5:44
  but they're not that thirsty, so they're just flashy.
• 5:48
  So 100% closing rate? Not possible.
• 5:51
  For those of you who are striving for 100%, please forget
• 5:54
  it. However, if there is anyone here
• 5:58
  who has been doing 100% closing rate, that actually is a bad
• 6:03
  sign. This is what it means.
• 6:06
  It means that you are so cheap that everybody stops what
• 6:10
  they're doing immediately and they buy from you because they
• 6:13
  see that, man, this product is good and this thing is a steal
• 6:17
  is just of so much value that everybody has to get it right
• 6:21
  now. So if you're actually doing 100%
• 6:25
  closing rate, it's a problem. It means that what you're doing
• 6:29
  is really, really valuable and the price is so dead cheap that
• 6:33
  nobody wants to pass off on this offer.
• 6:34
  They see it and they're like, please give it to me.
• 6:38
  So 100% is not possible. But just in case you're doing
• 6:41
  100% and you feel like you're a superstar, you're actually not a
• 6:44
  superstar. You're leaving money on the
• 6:47
  table. So that's on the 100% thing.
• 6:51
  Then let's see. OK, if 100% is not doable, then
• 6:56
  of course, of course, the next question is going to be what is
• 6:59
  the ideal closing rate? The ideal closing rate, it
• 7:02
  depends. It depends on your product, It
• 7:05
  depends on the service, it depends on the industry.
• 7:08
  Sometimes seasonality might be a factor.
• 7:10
  It depends on the price, because when you tweak the price, you
• 7:15
  know, you make it more expensive or you make it more affordable,
• 7:17
  the conversion rate changes. It depends on who the target
• 7:20
  customer is. It also depends on the
• 7:23
  individual ability of the salesman or the saleswoman, the
• 7:26
  entrepreneur, whoever it is that is doing the selling.
• 7:28
  So you can see that the ideal closing rate, it varies.
• 7:32
  Now let me go back to the pure water thing.
• 7:34
  The closing rate of somebody who sells pure water in rainy season
• 7:39
  is going to be low compared to the dry season.
• 7:41
  So you can see that seasonality is important here in the hot
• 7:44
  season, you know, after the Hamatan, everywhere is dry,
• 7:48
  things like that. It's been a very hot day.
• 7:51
  It's been a very hot week. You're a pure water seller.
• 7:54
  Your closing rate is going to be high because all you have to do
• 7:58
  is just stay in front of the park and shout pure water and
• 8:01
  then people rush you. The only question to have is, is
• 8:03
  it cold? But then in the rainy season,
• 8:06
  everywhere is nice and wet. The place is nice and cool.
• 8:09
  Your closing rate is going to be low.
• 8:12
  So I'm just using that as an extreme example just to show how
• 8:17
  all these variables affect your closing rate.
• 8:20
  Then of course, for luxury products, you know, it's
• 8:23
  questionable. It depends on the luxury product
• 8:25
  in question, because there are some luxury products that as
• 8:29
  economic times become harsher, the sales actually increase it.
• 8:35
  It happens. And then there are some luxury
• 8:38
  products that when there's a slowdown in economic activity or
• 8:42
  maybe when you think you're in a recession or things like that,
• 8:45
  that the consumption of those things goes down.
• 8:49
  So you can see that closing rate depends on the number of
• 8:53
  factors, but you can use Google ChatGPT or whatever and try to
• 8:59
  figure out what the optimum rate is for your business or for your
• 9:02
  industry or for your country or for you.
• 9:05
  Get what I mean, the particular context.
• 9:07
  And then you'll be able to judge based on that whether you're
• 9:09
  doing a good job or not. Now, what's the best way to use
• 9:13
  the closing rate? If we're able to figure it out,
• 9:17
  The best way to use it is, first of all, you need to figure out
• 9:19
  what your closing rate is now, then start trying to improve
• 9:24
  your business processes so that you can get your closing rate
• 9:28
  up. My assumption is that your
• 9:30
  product or your service is already fine as it is because
• 9:35
  sometimes improving the product might help.
• 9:38
  But let's just assume that there's no problem with your
• 9:41
  product. Your product is international.
• 9:43
  It's up to par. You're going to try and start
• 9:45
  improving your business processes.
• 9:47
  What's your what's your sales training like?
• 9:51
  What is your marketing like? What selling frameworks are you
• 9:55
  people trying to implement? What is your customer service
• 10:01
  policy and processes? You know, those are the sorts of
• 10:03
  things that you tweak that can move your conversion rate up or
• 10:07
  move your sorry, not conversion rate, your closing rate up or
• 10:10
  closing rate down. Sorry, forgive me because I keep
• 10:11
  saying conversion. And that's because the last
• 10:13
  couple of podcast episodes were devoted to conversions.
• 10:17
  So this is your first time listening to the show and you've
• 10:19
  been wondering, this guy keeps saying conversions even though
• 10:22
  you should be saying closing. What does conversion mean
• 10:25
  anyway? All you have to do is listen to
• 10:27
  the last three episodes, I think, and you get caught up to
• 10:29
  speed what a conversion is. But conversions ultimately lead
• 10:34
  to closing. So that's how they related.
• 10:39
  So if you're able to figure out the business processes that you
• 10:44
  can tweak, you're going to find that even if you make minor
• 10:47
  improvements, small improvements in the closing rate, it can
• 10:51
  usually lead to huge improvements in revenue.
• 10:55
  Because you find that there are a couple of us, a bunch of you
• 10:58
  listening to this podcast who your profit margins are high.
• 11:02
  So let me use another over at least some simplistic example.
• 11:07
  If you speak to 10 people and then you close three deals out
• 11:11
  of that 10 and each person gives you a profit of 100K, then your
• 11:17
  profit for that month IS300K at a 30% closing rate.
• 11:22
  So let me repeat if my mouth is wrong, no problem.
• 11:26
  Eventually you run into my math teacher.
• 11:27
  You tell her she didn't do a good job.
• 11:29
  So if you speak to 10 people and you close three of them in a
• 11:35
  month, each person giving you a profit of 100 KA profit IS300K
• 11:42
  for that month and your closing rate was 30%.
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  But if you increase your closing rate by just 10%, that is
• 11:50
  instead of closing three, you close 4, you get an extra 100K
• 11:54
  per month. So that is the reason why
• 11:58
  businesses hustle and struggle to get closing rate from 3% to
• 12:03
  maybe 3.5, because that 3.5, if you're looking at in terms of
• 12:06
  percentile, that is just .5. But .5 actually translates to
• 12:11
  10s of thousands or hundreds of thousands or 1,000,000 by the
• 12:15
  time the money enters your account.
• 12:17
  So it's a big deal. If you go from 3% closing rate
• 12:22
  to 3.5, it'll be fantastic. If you go from 3% closing rate
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  to 6% closing rate, it will be absolutely fantastic.
• 12:31
  Your business partners will be happy, your wife will be happy,
• 12:34
  your spouse will be happy, your kids will be happy.
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  That's if you choose to spend the money on them.
• 12:40
  And for those of you who had side pieces, your side piece is
• 12:43
  also going to be happy. So how do we increase the
• 12:48
  closing rate? Because that's what this whole
• 12:50
  podcast is about, right? At least the next couple of
• 12:53
  episodes. Some of you are going to assume
• 12:56
  that the answer when it comes to increasing your closing rate is
• 12:59
  to learn how to close the deal, which is what lots of you are
• 13:03
  focused on. Lots of you will wake up and
• 13:05
  think, how can I close more deals?
• 13:07
  How can I close more deals? Unfortunately, the answer is not
• 13:13
  in learning how to close the deal.
• 13:15
  If you want to increase your closing rate, the answer is not
• 13:19
  to learn how to close the deal. Let me say one more time, you
• 13:22
  want your closing rate to go up. The answer is not to focus on
• 13:26
  the art of closing the deal. If you want your closing rate to
• 13:30
  go up, the answer is to learn how to open deals better.
• 13:36
  If you open deals the right way, your closes go up.
• 13:40
  Let me repeat that again. If you open deals the right way,
• 13:45
  your closing rate is going to go up.
• 13:48
  For those of you who are focusing on close the deal,
• 13:50
  close the deal, the out of the close the out of the close,
• 13:53
  you're going to end up becoming pushy.
• 13:56
  You're going to end up becoming rude, impudent, what else?
• 14:03
  Obnoxious, all kinds of things. Because you're going to be bye
• 14:07
  bye bye bye bye bye bye and bye bye bye.
• 14:11
  I'm being rude, I'm being torn. Deaf actually makes your closing
• 14:14
  rate to go down. So if your closing rate is
• 14:18
  currently 30% and you get into that bye bye bye bye bye bye
• 14:23
  obnoxious tone deaf mode, your closing rate will actually fall.
• 14:27
  But if you learn how to open your deals better, then your
• 14:33
  closing rate is going to go up. And then plus it also preserves
• 14:37
  your reputation, which is not a bad thing because you don't want
• 14:40
  to go around trying to do business with people.
• 14:42
  And then people will say, ah, see him, see him, see how, look
• 14:45
  at how that's came in. That's how that's by your,
• 14:48
  they've come again. And of course, we don't want
• 14:51
  that. So how do we learn how to open
• 14:55
  deals better? We're going to get into some
• 14:57
  more of those details from tomorrow's episode onwards.
• 15:00
  So for now, that's all for today.
• 15:03
  Please connect with me on WhatsApp.
• 15:04
  The phone number is 08064662140. The country code is +234.
• 15:11
  Also connect with me on LinkedIn.
• 15:12
  My name is Tava Shima Ayede, you can confirm the spelling of my
• 15:16
  name. So you can find me from the link
• 15:18
  where you're currently listening to this episode.
• 15:20
  My e-mail address is going to be there.
• 15:22
  Oh, and by the way, I've been chatting with someone who's a
• 15:24
  podcast listener already giving him a shout out, so no need to
• 15:26
  repeat his name again. But he seems to think that I'm a
• 15:29
  catfish person. I like catfish.
• 15:33
  I realized that that's because I keep talking about catfish all
• 15:35
  the time. But sorry, I might have given
• 15:37
  some of you the wrong impression.
• 15:39
  I actually do not like fish, and I have had allergic reactions to
• 15:43
  catfish. It's just that, unfortunately, I
• 15:47
  married a woman who is in love with fish.
• 15:50
  She likes her shrimp. She likes her panda.
• 15:53
  She likes her ice fish. She likes her octopus.
• 15:57
  She likes her snail, she likes her crab, she likes her whatever
• 16:04
  it is. If it is seafood she likes it.
• 16:08
  Now my mom is also that kind of person too.
• 16:10
  If it's seafood she loves it. Even if it's shark fin, she will
• 16:14
  eat it. My in laws happen to be fish
• 16:17
  people. I am surrounded by fish people
• 16:21
  and every single time we go on a holiday it turns into a fish
• 16:25
  fest. The last time when I been
• 16:26
  wasted, my in laws were there and or like air catfish this
• 16:30
  size, this amount. Please let's have some more.
• 16:34
  So my last Christmas holidays, I was surrounded by fish.
• 16:39
  And I just thought that that would be a good case study to
• 16:46
  start expanding upon some of the business principles, the sales
• 16:49
  principles that we talk about over here on the show.
• 16:51
  Which is why from December last year, I used a couple of catfish
• 16:55
  people. You know, people want to open
• 16:57
  fisheries and stuff like that. It's just convenient because I
• 17:00
  happen to be surrounded by fish lovers who are enjoying
• 17:02
  themselves eating peppered catfish and grilled catfish and
• 17:08
  other kinds of varieties of catfish.
• 17:11
  So it's not that I love catfish, I am just surrounded by fish
• 17:15
  lovers. But it got me thinking, I guess
• 17:19
  it's time for me to look for other examples to start fleshing
• 17:21
  out the principles that we talk about over here on the
• 17:25
  broadcast. Eventually, I'll think about
• 17:27
  something else. But when I talk about catfish
• 17:30
  and I talk about and I relate you to the business principles,
• 17:33
  I'm just trying to show that all the things that we talk about
• 17:36
  here on the podcast work and they work for you.
• 17:39
  No matter your class. If you're a catfish seller, it
• 17:42
  will work for you. If you're thinking of entering
• 17:47
  the fintech space, it will work for you.
• 17:50
  If you sell cars, it will work for you.
• 17:53
  If you are one of these fraudsters who opens an
• 17:56
  evangelical church branch, it'll work for you too.
• 17:59
  So the point I'm just trying to say is it'll work for anyone.
• 18:03
  So that's why I talk about catfish people, and that's why I
• 18:06
  talk about our fintech brothers and sisters, just to show you
• 18:09
  that no matter where you fall within the gamut, it'll work for
• 18:14
  you. So I'm not a fish lover.
• 18:17
  For those of you who think I'm in love with fish, just in case
• 18:22
  some of you come to an event and you want to Take Me Out, you
• 18:26
  want to give me a good time, please let us go to a joint
• 18:30
  where they sell nice, cool beer and where they sell nice
• 18:34
  peppered meat, Hastun, all those sorts of things.
• 18:38
  That's my jam. Unfortunately, one of my
• 18:41
  speaking engagements, there was a cardiologist there.
• 18:44
  So I told her that look, by the time we're done, let's you know,
• 18:47
  I know that you you're a club person.
• 18:48
  So Take Me Out now. Show me Lagos.
• 18:51
  Let's enjoy, let's eat as soon and let's drink some beer.
• 18:55
  And she was like, you know, you're talking to a
• 18:56
  cardiologist, right? I'm like, yeah, I know you're a
• 18:58
  cardiologist. So what gives?
• 18:59
  She said, look, as soon is not good for your heart because cow
• 19:04
  is blah, blah, blah, goat is this, this, this vegetable oil
• 19:09
  is blah, blah, blah, blah, blah. Beer is not good for your heart
• 19:12
  because alcohol this, this, this da da, da, da, da da.
• 19:14
  And the bottom line is I didn't get the as soon.
• 19:17
  So the moral of the story here is if you want to have a good
• 19:20
  time, don't hang out with cardiologists.
• 19:22
  They're going to tell you that everything is bad for your heart
• 19:24
  and you're going to have a very bad evening.
• 19:27
  So thank you very much, guys, for listening to the show.
• 19:30
  I'll catch you guys at the next episode.