In this article we will discuss how follow-up can increase your closing ratio. In our article on tips to improve your closing ratio, we defined closing ratio as the number of jobs won from the total number of jobs bid. For example, if you bid 10 projects and you win 2, your closing ratio is 20%.
There are many factors that influence your closing ratio, such as your pricing or your reputation. But follow-up has also been identified as a big influencer when it comes to closing ratio. There is a direct correlation between follow-up and closing ratio. The more you follow-up, the higher your closing ratio.
A Quick Review of the Construction Sales Process
A building owner/developer reaches out to several general contractors (GCs) in the area requesting budgets for the proposed construction project. Each general contractor reaches out to their network of sub-contractors requesting bids for each trade involved. Different GCs may have the same sub-contractor in their network. So, the sub-contractors end up bidding multiple GCs for the same project.
Once a general contractor is awarded the opportunity, the focus changes from one-to-many to one-to-one. The sub-contractor re-focuses sales efforts on the client with the opportunity, and on beating its competition to the finish line. The process may be a little different between Plan and Spec and Design/Build projects but, generally, this is the process flow in the industry.
Can You Increase Your Closing Ratio by Following Up More?
The answer is YES! So let’s look at HOW to increase your closing ratio with follow-up.
Follow-up at Early Stage of the Opportunity to Increase Your Closing Ratio.
When you receive those ITBs for a project, you submit your proposals to the GCs who invited you to bid. If you’re in commercial construction, chances are you’re bidding multiple clients for the same project. One way to increase your closing ratio is by finding out which client is awarded the job. And in order to do that, follow-up is key. It serves to:
- Find out when a client is awarded a job and which one.
- Help you stay in the loop of any potential issues or changes so you can address them early in the sales process.
- Deepen relationships with the clients. Even if you do not win the deal, the connection could lead to other opportunities.
- Build trust with your clients. Autodesk partnered with FMI Corporation on an industry study that showed how trust generated more repeat business and drove a higher level of operational success.
- Create opportunities for your prospect to ask questions. Be sure to answer them so the client knows that your organization provides excellent customer support.
Follow-up at this initial stage is usually in the form of email. What’s important is that you have a list of opportunities and the clients you need to follow-up with for each. iDeal CRM for example helps you track opportunities, bids, projects, and also has a built-in follow-up tool to help you send out your follow-up emails.
Follow-up email example to increase your closing ratio at this stage:
Subject Line
Following Up on Several Jobs We Bid
An Update on Open Projects Please?
Email Body
Hi John,
How are you? I’m hoping to get an update regarding the projects listed below so we can best fit them in our schedule.
Has any decision been made on these?
– [opportunity name]
– [opportunity name]
Is there anything else you need from us?
Thank you so much.
[your name and contact information]
Follow-up After the Project Was Awarded to One of Your Clients
At the point when a project is awarded to one of your clients, your proposal, price, and relationship with the client take center stage. Follow-up remains crucial at this stage in order to increase your closing ratio. Bill Corbin on LinkedIn, reports that 80% of sales are made by 20% of salespeople. And what those successful 20% of the sales people do differently is follow-up. They follow-up with the opportunity at every stage. Since apparently as many as 44% of salespeople give up after one follow-up, you could be losing opportunities to close a deal!
At this stage, you follow up to find out where your price stands against your competition. The reality of it is that lower price is still the deciding factor in winning the opportunity. Following up on price is what will help you increase your closing ratio at this stage.
- Prompt your client to look at your proposal.
- Check your price against your competition. Make sure yours is comparable or lower.
- Follow up via voice if follow-up emails go unanswered.
Follow-up email example to increase your closing ratio at this stage:
Subject Line
Checking in on a few proposals we submitted
Email Body
Hi John,
Hope all is well. Will you please take a minute to provide us with feedback on our price for the following projects?
– [opportunity name]
– [opportunity name]
Thank you so much.
[your name and contact information]
Follow-up After You Lost an Opportunity to Increase Closing Ratio in the Future
This type of follow-up may seem odd to you, but it is a crucial piece in increasing closing ratio. What you want to find out at this stage is why you lost an opportunity. And you’d be surprised how much information you’ll find out if you just ask.
If you lost because of pricing, next time you submit a proposal with this client, you can lower your margin to make sure you come in lower. If you lost because of relationship, it is time to build more rapport and deepen yours with this client. Also, if you lost because of insurance or other reasons, you tackle fixing those. The important thing is that you find out why you lost.
Follow-up email example to increase your closing ratio after you lost an opportunity:
Subject Line
Following up on the proposal we sent for [project name]
Email Body
Hi John,
Hope all is well. Thank you for the opportunity to bid [project name] and for letting us know it was awarded to someone else. Can you please let us know where we were with our price?
Thank you so much.
[your name and contact information]
Follow-up After You Win an Opportunity
You’ve closed the deal with the client, yes, and now the opportunity is yours, but the follow-up shouldn’t stop yet. Acquiring a new customer costs 5–25 times more than keeping an existing customer, according to the Harvard Business Review. At this stage you follow up to:
- Solidify your relationship with the client – Ensure you cross the t’s and dot the I’s for the deal.
- Deliver “value add” to the business relationship – Learn more about your client and their expectations and deliver more.
- Build on your success – Stay connected and position you for future opportunities.
Conclusion on How to Increase Your Closing Ratio with Follow-up
One of the easiest way to increase your closing ratio is to increase the amount of follow-ups you and your team perform. By following up at every stage of the opportunity you ensure that you know when a client is awarded, if your prices looks good, or why you lost an opportunity. Using a sales management system like iDeal CRM will help you keep an updated list of open opportunities. It will also help you send out follow-up emails and save notes for each opportunity. Sales management software like iDeal CRM helps you stay organized and on top of your follow-up.