Close Rate vs Win Rate [Differences and How to Calculate It] (2024)

Do you also get confused between close rate and win rate? You’re not alone.

These common sales pipeline metrics leave many sales reps scratching their heads. Ask your fellow sales professionals, and you will get a different answer every time. In 2017, Beily Pan, Sales Strategy and Operations Lead at Google, did the same thing and asked her team to define a close rate.

This is what they came up with:

1. Close wons per unit time / Opened opps per unit time
2. Number of open opportunities / Number of those that convert to closed-won
3. Deals closed compared to all closed opportunities

Do you know the right answer to Beily’s question? Not sure? Let us clarify 💪

Here is a deep dive into close rate vs win rate.

What is Close Rate?

The sales close rate, also known as the closing ratio or lead-to-close rate, is the percentage of closed deals to the total number of sales-qualified leads (SQLs) in the pipeline.

You could also swap SQLs with ‘sales opportunities’ created in a given period of time to calculate.

How to Calculate Sales Close Rate?

Here is the formula to calculate the sales close rate.

So, for example, let’s assume you had 20 sales leads between September and November and closed only 15 (either won or lost). Then, your sales close rate would be 75%.

(Note: This formula will also work well for calculating individual sales rep’s closing rate, along with your sales team’s – of course!)

How to Improve Your Close Rate?

Poor sales closing rates often boil down to issues with the qualification criteria, closing methods, or a lack of high-quality sales engagement. Here are three tips to overcome the common loopholes and boost your close rate.

1. Appeal to the Buyer’s Emotional and Logical Brain

There’s a lot of sales advice leaning towards emotional selling. “People don’t buy features and benefits. People buy emotions.” But does appealing to emotions always do the trick?

Not really.

You should know when to stimulate the emotional brain of the buyer and when to simulate the logical one. A rule of thumb to follow? Use emotional selling to nudge the buyer towards the purchase decision.

Once the prospect is sold on the value you’re offering, that’s when the negotiations will start. The decision to buy will activate the critical and analytical parts of their brain. That’s your cue to switch to logical arguments to build a strong business case and win them over.

Hot Tip: The degree of emotions involved in the sales process should always mirror the degree of “risk” involved. For deals with high risks, keep the emotions on the low and vice-versa.

2. Always Be Qualifying

When do you stop qualifying the prospects?

If your answer is ‘after the discovery phase’ or ‘after the live demo’ or anything else for that matter – you’ve got a problem at hand.

Sales qualification is a continuous process, because business goals, priorities, finances, and the market itself change all the time. Especially in a B2B sales environment, with a lengthy and complex sales process, continuous qualification ensures your pipeline is full of healthy leads and gives you an accurate forecast.

You can validate (and revalidate) their needs, budget, and your own assumptions to confidently decide which opportunity is worth the chase. This keeps your pipeline momentum going and the close rate growing positively.

If you’re stuck on what qualification criteria to choose for different stages, our comprehensive qualification checklist will help!

3. Focus on the Next Steps

If you want to eliminate ambiguity from your sales process and move the deals along, ask about the NEXT STEPS. It is a simple exercise to keep the sales cycle moving forward, and moving at a favorable pace.

According to the data collected by Gong, salespeople who missed asking about the next steps saw a 71% decline in close rates.

Not to mention, ‘next step selling’ weeds out unqualified prospects early on, while nudging the interested ones forward.

This gives you time and resources to prepare for future negotiations and pivot the sales strategy as and when the prospects do. You’ll also be blessed with a clean, manageable sales pipeline.

And when you’re nearing the dotted line, seal the deal using one of the many sales closing techniques listed here.

What is Sales Win Rate?

Sales win rate is the ratio of deals won (or closed-won deals) to the total number of opportunities closed, whether lost or won, in a specific time period.

It is also called the sales pipeline conversion rate, indicating the number of leads successfully converted into paying customers.

How to Calculate Sales Win Rate?

This is how you can calculate the sales win rate using the sales opportunities won and lost.

To give you an example, if you closed 50 opportunities in a month but won only 10, your sales win rate would be 20%.

How to Improve Sales Win Rate?

If you’re struggling with a poor sales win rate, you need to run a granular analysis of the sales pipeline to find the cracks. But 4 out of 5 times, a poor selling approach caused the setback.

Here are three proven tips to improve your win rate.

1. Switch to Team Selling

Research has shown that team selling is the cheat sheet for contract games. Rather than having a single point of contact, building, and selling in a revenue team comprising sales (AEs, pre-sales SMEs, sales engineers) and non-sales (customer success manager) professionals can boost your win rates.

A study by Gong(again) shows the clear distinction below.

You’re probably wondering, how does team selling create more wins? Customer journeys are far more complex today. With a wealth of information at access, they come to the sales reps with a lot of baggage: apprehensions, perceived risks, changing business goals, and more.

In such a scenario, selling in a team means no opportunity goes unanswered. You are better equipped to engage and address the unique needs of the buying committee at different stages of the buyer’s journey. It also gives the prospects a sense of security that all their needs will be taken care of.

2. Leave Room for Buyers to Think

What do you do when prospects demand time to “think”? It’s simple! You listen.

If you hear the phrase, don’t go into panic mode. It’s not an objection, but a sign of interest and due diligence on their part.

Gong’s data backs the claim, as the chances of winning a sale go up when prospects ask for ‘time to think’ during the mid- or the late stage deals. Now, compare the numbers to when the phrase does not show up at any point in the sales cycle ⬇️

There’s quite a difference. So if you hear the phrase come up, perk up. Once you’ve given sufficient time and space to the prospects, it’s time to follow up and seal the deal.

And one of the best ways to follow up effectively via email is to share "sales leave-behind" demos. Stakeholders can run a fair assessment of the product while earning you quality mindshare after the live demo.

Seeing the benefits, Upland created a leave-behind demo using Storylane for their product Altify. And within 90 days, Upland improved its sales velocity by 3x and earned a 69% engagement rate.

3. De-Risk the Buying Decision

What do we mean when we say “de-risk”?

There’s a perceived risk attached to every deal, which stems from a lack of information or a gap in the prospect’s understanding. As a result, every prospect evaluates the risk (real or perceived) differently. This ultimately impacts the final decision.

To de-risk the decision is to understand the buyer’s worst-case scenario and pitch from there. What happens if you don’t make the decision soon? What happens if you pick the wrong vendor? Once you know what they’re afraid to ‘risk’, you can start de-risking the situation.

This often boils down to your value messaging.

(Not to be confused with its evil cousin feature dumping, which is a real deal killer!)

You’ve got to show the buyers how your solution will elevate their pains, instead of painting a rosy future.

Sales Close Rate vs Win Rate: 5 Key Differences

Comparing the close rate to the win rate is like comparing green apples to red apples. Both are vital metrics, but the former tracks unripe opportunities while the latter tracks fruitful ones.

(Ok, enough with the fruit analogy.. ❌)

Now, for the key differences between close rate and win rate:

1. Close rate impacts the sales pipeline, which in effect, impacts the win rate and the bottom line. A higher closing ratio, however, doesn’t always indicate a good win rate.
2. Close rate isn’t always an indicator of the sales team’s performance. It is actually the win rate. This is because, in some teams, AEs are responsible for qualifying leads into sales opportunities, while sales managers and reps take over the closing of the opportunity bit.
3. Sales win rates are generally lower than the close rates. But a higher sales close rate can be misleading. This is where you need to consider the context: time period, lead quality, lead volumes, and more.
4. Close rate gives you a snapshot of your sales pipeline performance. On the other hand, the win rate gives you a snapshot of your sales performance against industry benchmarks.
5. While both are vital metrics in sales; in the close rate vs win rate battle, close rate undoubtedly holds more importance (even though you’re not getting a win). This is because closing a deal as won or lost is still better than having idle leads sitting in the pipeline for a long duration.

One Last Thing…

Before you go! One of the best ways to cater to every stakeholder involved in the buying process is to use interactive product demos as your sales demos. Why? Because they can create a sandbox-like environment for all the different stakeholders in the buying process. Making it easier for salespeople to convince different stakeholders of your product’s value.

And if you use a sales demo creation platform like Storylane, you can build such personalized demos in a couple of minutes.

Before you go, here are some of the commonly asked questions about sales win rate and close rate.

Q1. What is a good close rate?

Many factors influence the close rate, from the average sales cycle to the quality of sales leads. But going by the industry wisdom, closing 1/3rd of the qualified leads in your sales pipeline or an average close rate of 30% is considered solid.

Q2. What is a good win rate in sales?

A good sales close rate will differ from one industry to another and depend on factors like business size, market maturity, average deal size, and more. However, a win rate of 20% or above is generally considered good.

Q3. Is 60% a good win rate?

A sales win rate of 60% is remarkable. B2B sales ratios, for example, tend to dwindle between 10% to 30%. So, a higher percentage would mean your average sales cycles are shorter, and your sales strategies are working, which is always good.

Q4. What is the difference between close rate and win rate?

A sales win rate is the percentage of closed-won deals against the number of deals lost. In contrast, a sales close rate, also known as the win ratio, is the percentage of closed-won deals against the total number of sales opportunities closed (won or lost).