What’s a good closing rate?
This is another listener suggestion. I got an email from Scott, asking if his closing rate was good. He had good stats on his conversion from inquiry to conversation to sale. That already puts him ahead of most wedding and event pros. What I explained to him, and to you in this episode, is what stats you’d want to have, and whether or not you need to know what your closing rate is. You’ll hear how I have stats that I pay to more attention to than my closing rate.
Listen to this new 8-minute episode for more ideas on your closing rate and whether there are more important stats for you, too.
If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at [email protected] or visit my website Podcast.AlanBerg.com
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– What’s a good closing rate? Ooh, listen to this one.
Hi, it’s Alan Berg. Welcome back to another episode of the “Wedding Business Solutions” podcast. Here’s another indirect listener suggestion from Scott, and I say indirect because he emailed me about this and it prompted me to come up with this topic here. So, thank you, Scott for this. And what he had done is he sent me what his closing rate is, so, from inquiry to conversation to sale and so forth. And he said, is this good? It’s a really loaded question, Scott. So, thank you for asking this and let me try to break this down for everybody a little bit here. In a perfect world, what you’d want to know is how many people reach out to you? How many of those people, and Scott knew this, where you’re not available on their date.
So, they’re a good prospect, but he couldn’t possibly do it because he has no availability on that date versus ones where you are. How many of them do you get to a conversation? How many of the people in the conversation do you get to the next thing, which could be a sale, if you’re going to do it digitally, right? Or a phone call or a meeting or a tour. And then, how many of those for the phone calls, the meetings, the tours, the zooms, do you then get to the next step, which is the sale? And you want to look at it every stage there, and Scott was kind of, was smart to pull out the ones where he’s already booked on those dates because while it was a good lead, he had no way he could possibly convert that, right? No way, because they’re not going to change the date for him ’cause he’s not a venue or a caterer or a ceremony site so, he has to go by that date.
So, it was smart of him to pull that out. The best thing to look at in terms of a closing rate, I told him, I said, I want you to look at trending, which is how are you doing now versus how were you doing before? And then how are you doing in the future, looking back now? So, you can see is your closing rate steady? Is your closing rate going up? If you want to certainly break this down differently for different types of events.
So, if you do more than just one type of event, if you only do corporate, that’s fine, if you only do weddings, that’s fine, if you only do quinces, that’s fine, but if you do multiple types, you want to break it down differently for each one of those. You might even break it down differently from different sources. I know I’ve said this before, where your closing rate from different sources is going to be different. People that come directly through your website, people that might have been looking for you specifically would probably close at a higher rate than someone that’s looking at your ads on Facebook or Instagram or even the Knot or WeddingWire will probably close differently.
So, you’d want to look at the different pieces of this. What you don’t want to do is compare yours to somebody else because you don’t know their trending, you don’t know their skillset, you don’t know what their process is, and how they follow up or don’t, as I find with a lot of my secret shopping people not following up. So, you don’t want to compare it to somebody else, it’s kind of like pricing. It’s good to know, but don’t compare it and then feel good or bad that yours is better or worse because, again, their needs might be different. What I told Scott is, it’s kind of like my Google Analytics in terms of closing rate. I actually don’t pay any attention to my closing rate, what I pay attention to is my calendar and my P&L statement, my profit and loss statement. Those are the things that I pay attention to. If my calendar is as full as I want it to be, I could care less what my closing ratio is. If my profit and loss statement looks as good as I want it to be, right?
So, if I’m making the profits that I want then I don’t care what my closing ratio is. So, what I look at is every day when I do QuickBooks, I do QuickBooks, I download all my bank transactions, so, those are all the money that came in, the money that went out, credit cards, banking, everything there, right? And then I can pull up a profit and loss statement comparing this year to last year for the same period.
So, year to date this year, year to date at the same months for last year. And what I’m looking at is my profit and, so, my gross income, my gross revenues and my net after the expenses. And I’m looking at those numbers this year versus last year to see how I’m doing because I want to be, again, in terms of the amount of profit and the amount of revenue. I want to make sure that I’m pasting last year or going above if I have a particular goal for that. At this point in my career, I’m pretty much looking to go steady. I actually don’t mind if we go back a little bit because I traveled a lot and if I’m trying to travel a little bit less, you know, it might go down a little bit, but I’m looking at that profit line at the bottom. If the profit line looks good and the calendar looks good, I could care less what the closing ratio is.
So, is it an important metric? Yes, it’s kind of like the things on Google Analytics, there are important metrics there if you can take action on it. This is one that you can take action on, if you’re aware of your conversion from an inquiry to a conversation, a conversation to a meeting, a tour, a zoom, or whatever, you know, however that is or to the sale, if you can go directly to the sale from the digital inquiry, digital conversation, that’s great. And if you’re, if you can do that and then keep track of that and then see can you improve that where are the places for improvement? And again, I would probably break it down by source so that you can look at it and not just lump everything together.
It’s nice to see the high level number, this is my closing ratio, but I think it’s better to say, this is the closing ratio directly through my website, this is it through this ad medium, through this ad medium, this ad medium. They don’t have to be the same, they’re not going to be the same. And don’t drop your ads all of a sudden because the closing ratio is not as good as directly through your website. You have to look at what dollars did it bring in, which is not always a hundred percent clear with that because some people saw your ad, go to your website, and you know, now you’re attributing it to the website, you’re not attributing it to the ad itself.
So, that gets a little more gray there, but if anecdotally, you feel you’re getting business from something, the closing ratio doesn’t have to be the same as it is for something else. It just has to be enough to justify that particular expenditure, that’s what it has to be. So, what is a good closing rate? I’m not throwing out any percentages here because I don’t want you saying, “Well, Alan said it’s this percent over here.” What I want you to do is have better visibility to it. And then look, if you can look back, if you have historical numbers, look back over time and then see has it been trending up, down, staying the same, and again, if your calendar is full the way you want it to be with people paying the kind of money that you want and your profit and loss statement looks the way you want it to look, don’t worry about the closing ratio. Just keep doing what you’re doing, if it’s not, then you need to start analyzing that.
And that’s what I do with a lot of my customers with when we’re consulting, is trying to drill in and find out where are we missing? ‘Cause you know, every pipe in this pipeline has leaks, mine has leaks, yours has leaks. I don’t care about my leaks, if the calendar’s full and the P&L looks good, you might not care about yours either that way, but if it doesn’t look the way you want then you want to find those leaks and start plugging ’em up. So, thank you Scott, indirectly, for this suggestion and I hope it gave you something to think about, thanks.
I’m Alan Berg. Thanks for listening. If you have any questions about this or if you’d like to suggest other topics for “The Wedding Business Solutions Podcast” please let me know. My email is [email protected]. Look forward to seeing you on the next episode. Thanks.
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