The contract rate is an indicator of how efficiently you have obtained these contracts.
Understand why the contract rate is brazil telegram phone number list important and the strategies and tools you can use to increase the rate and use it in your sales activities.
What is a contract rate?
The contract rate is a number that represents the percentage of cases that actually result in a contract after an approach such as telemarketing has developed into a sales negotiation.
It is an indicator of sales performance, and in order to increase sales, it is necessary to increase the contract rate.
If the contract rate drops, you must identify the cause and consider measures to improve it.
The ideal contract rate varies depending on the type of products handled by the company, sales methods, and position in the market.
It is a good idea to set guidelines and goals by comparing it with your company's past data.
Calculation formula for contract rate
The contract rate can be calculated using the formula "number of contracts concluded ÷ number of sales negotiations × 100".
For example, if there are 80 sales negotiations in a month and 20 contracts are concluded, then 20÷80×100=25 is a 25% contract rate.
Also, if there are 60 sales negotiations and 30 contracts are concluded, then 30÷60×100=50 is a 50% contract rate.
Why contract rates are important
The contract rate functions as an indicator of individual sales performance and the productivity of the entire sales department.
By combining it with other figures that measure sales performance, such as the sales conversion rate, you can understand each person's strengths and weaknesses.
It is possible to assign the right person to the right position, such as assigning personnel with a high sales conversion rate to winning sales negotiations and personnel with a high contract rate to winning contracts in sales negotiations.
Also, by exchanging each other's know-how, you can overcome your weak areas and increase the number of cases that can be brought to contracts.
This will improve the productivity of the entire department and increase sales per sales person.
Reducing unnecessary expenses for sales activities will lead to improved profit margins.
Measuring the contract rate will help you understand the current situation of your department or individual, and will help improve and streamline your work.
Strategies for improving contract rates
The shortcut to turning negotiations into contracts and increasing your contract rate is to review your sales strategy.
If your contract rate is low, it may be because you have not developed a strategy that matches your actual product or service.
Let's look at strategies that will help improve your contract rate, depending on the nature of your product and the target market that has demand.
Understanding customer needs
To increase your contract rate, you need to sell to people who really need your product or service.
In other words, you need to understand the needs of your customers for your product and approach them.
Depending on the customer demographic, it may be better to break down your approach methods into smaller categories.
Conducting a survey
In order to understand your customers' needs, it is important to collect information by surveying existing customers who have actually purchased and used your product or service.
By knowing what kind of customers, how they found out about your product or service, what attracted them to buy it, and what their impressions were after using it, you can know what approach to take when acquiring new customers.
Analyzing how to make new customers think, "This product is what I need right now," is used to improve the contract rate.
The importance of communication with customers
In order to increase the contract rate, it is important to look at the current state of the customer in front of you while referring to past data.
In other words, you need to communicate closely with the other party during the sales negotiation and draw out the customer's issues and worries that you need to solve in order to propose the product or service.
If the salesperson remains silent, the customer will not tell you the necessary information, so the salesperson who wants to get the contract will need to actively start a conversation and find out about potential issues.
Reviewing the pricing strategy
If the price is not set in line with the actual product or service, the contract rate may not increase. So, let's review the pricing once.
Even if the price is set in line with the quality and function itself, it may not be appropriate depending on the time of sale.
Utilizing discount campaigns
Even if a price seems fair to the product provider, the customer may not understand its value.
Therefore, a sales strategy that utilizes discount campaigns and other methods is possible, in which customers try the product or service once and understand its value.
If customers actually use it and realize that it has quality and functions that are worth the price, they are more likely to buy it at a fair price the next time.
Another advantage is that it attracts customers by offering a good deal, so the number of contracts simply increases.
Pricing according to sales volume
When reviewing the fair sales price of a product, it is a good idea to decide the price based on the sales volume and period for the time being.
If the sales volume is high and you want to sell a lot, setting a low price will make it easier to achieve your goal.
On the other hand, if the sales volume is low or the sale is for a limited time, it is important to set the price a little higher and clearly appeal to the fact that it is a rare product and that it is worth buying now.
It is a strategy that stirs up the user's psychology of "I want it now" before the product is no longer available.