Every sales manager hates end-of-quarter surprises. So how can you tell whether your pipeline is accurate? We analyzed 21,000 opportunities from multiple companies and industries to find what predicts a closed-won opportunity.
Legendary baseball figure Yogi Berra used to say: “It’s difficult to make predictions, especially about the future.” Sales managers face this challenge all the time—they are responsible for creating and managing the sales forecast, which can be a formidable task, especially as you need to avoid end-of-quarter surprises.
To answer what predicts a closed-won opportunity, Implisit analyzed over 21,000 opportunities across companies, industries, company size and deal size and came across some very interesting conclusions. Results show that you can actually use the data in your Salesforce CRM and email communications in order to more accurately assess the likelihood to win deals.
Here are the 7 predictors of a Closed-Won opportunity:
Usually when an opportunity is just created and you don’t know anything about it, it has about 30 percent probability to end up as closed-won. This is the overall average amongst 21,000 opportunities, but obviously, this number varies between companies and industries.
An analysis of the number of emails to clients that were sent for each opportunity shows that strong client communications is key for closing more opportunities. Implisit found that closed-won opportunities involved 34.9 emails on average as compared to only 7.2 emails for closed-lost opportunities—4.8 times the number of emails for closed-won deals.
This information was obtained by linking outgoing and incoming emails to opportunities. Matching emails and opportunities was done automatically, to ensure that the numbers were not skewed by reps’ varying tendency to update communications into Salesforce.
This shows the importance of communication to a deal’s progression. Opportunities with little, irregular communication should actually be assigned lower probability to close. Furthermore, sales managers should ensure regular communication with prospects to ensure that opportunities are not falling between the cracks.
There is scientific evidence that strong teamwork drives strong revenue performance. Implisit found that on average, closed-won opportunities involved 1.4 sales reps, as compared to only 1.1 Sales reps on closed-lost opportunities. Overall, this is 1.3-times more reps on winning deals.
To get this information, Implisit looked at how many sales team members were copied on opportunity emails. The results show that in a collaborative sales environment, when more sales resources and effort are concentrated at the opportunity, there is a higher likelihood to win.
B2B purchases tend to involve multiple decision-makers and stakeholders. Many times, the end user is not even the decision-maker or does not have budget authority. Therefore, involving as many people from the client-side as possible right from the start increases the likelihood to close.
Implisit analyzed emails from 12,000 opportunities and calculated the number of clients who were involved in each opportunity. Indeed, results show that closed-won opportunities involved 1.3 clients as compared to 1.1 on closed-lost opportunities—a 120% increase.
Keeping fast-paced progress on an opportunity is key for closing. Implisit’s study shows that 53% of opportunities are closed-won in the first 30 days, whereas only 24% of lost deals are closed-lost at the same time period. Furthermore, 37% of closed-lost deals are still “open” in the pipeline after 6 months.
Implisit’s research shows that if you don’t close opportunities fast, you are likely to lose. In fact, after 6 months, opportunities have only 20% chance of being won, as compared to over 50% in the first 30 days.
This has important implications on companies’ forecasts. Old opportunities that are sill open in the pipeline may present higher revenue forecast, while in reality they are 80% likely to end up as closed-lost.
Great sales reps and meticulous sales management are also great predictors of whether opportunities are likely to be won. Implisit found that about 17% of companies have close rate of 50-100%, or winning at least 1 of every 2 opportunities. The vast majority of companies close less than 50% of their opportunities. Therefore, companies that have a good close-won rate in the past, are likely to have a good close-won rate in the future.
Sales managers’ ability to provide an accurate sales forecast is key in every organization. Email and CRM data have valuable insights that can help predict opportunities’ likelihood to close. Weeding-out those likely dead opportunities in the pile will help you make better predictions about the future, and can help prevent nasty surprises at the end of the quarter.