Why Close Rate is the Metric of 2024 + 5 Ways to Increase Yours

Close rate is the metric of 2024.

New meetings booked have dropped off across the board, and unfortunately, top-funnel activity isn't making up the difference.

Even if more activity could cover the full pipeline gap, a pure focus on adding more opportunities hits a point of diminishing returns, fast.

There are a few reasons for this.

Close rate is directly tied to increased revenue in a way pipeline coverage isn’t.

You can increase your pipeline coverage without actually increasing revenue.

That's because of a counterintuitive link between each variable in the revenue equation:

[1] Revenue = [2] Close Rate (x) [3] Pipeline Value

[3] Pipeline Value = [4] # of Qualified Opportunities (x) [5] Average Contract Value (ACV)

When reps are behind on revenue, they often focus on adding more opportunities.

It seems like the fast path. But a focus on increasing [2] close rates will often mean:

• [4] The number of opportunities in a seller’s pipeline decreases.‍
• [5] The average contract value of each opportunity increases.

Why is that? Well, that’s because:

• Your time to sell each week stays the same.
  
  As the number of opportunities you're managing increases, existing deals start to get short-changed. Something’s gotta give, so eventually, the resulting drop in quality time outweighs the gains in pipeline.

• There’s a compounding effect as “deal debt” piles up.
  
  You accumulate deal debt when you invest your TEA (time, energy, attention, as my friend Brandon calls it) into low-quality deals, which starves high-potential deals of that same TEA. You’ll eventually pay for those shortcuts, just like a product team with too much tech debt.

• Paying down deal debt drives both revenue metrics at once.
  
  Take a look at the leaderboard on your team. What you’ll likely see is that the leading reps aren’t just closing at a higher rate — they’re closing larger deals.
  
  Investing more time and energy into a deal means discovering new use cases, building deeper value, less price sensitivity, and more buying confidence. Which = a larger ACV.
  
  In other words, there’s a “co-linear” relationship between ACV vs. close rate, whereas pipeline coverage vs. close rates have an “inverse” relationship. (The JOLT Effect authors point this out in this their research. As ACV is discounted, close rates decline as well.)

Here's a set of examples to put some numbers behinds these points.

Let's suppose that for every 5 opportunities you stop working, your win rate jumps up 5%.

If you make that trade once, your revenue stays the same, and then drops off:

But that's not the full story. Now, let's look at the scenario again, but with a $15K increase in ACV for every 5 opportunities given up this time.

Now, you'd definitely make the trade down to 20 opportunities.

In fact, you'd even prefer 15 to 25 opportunities:

Often, however, the differences aren't so small. The typical gap between low and high performers in The JOLT Effect was typically as significant as 20% vs. 50%.

So, take a look at the difference in revenue between a seller who invests their TEA in winning 10, high-value opportunities instead of spreading themselves thin across 25:

And, depending on how strategic each deal is that you're working on, the difference between your high and low value opportunities can be millions. $150K vs. $1.5M, $15M, or more.

When pipeline becomes the goal, it’s no longer an effective measure.

If the number one metric that comes up in every 1:1 and forecast call is pipeline coverage, what do you do? You try to open as many opportunities as you can.

You relax your acceptance criteria a bit. You start nudging first conversations forward in the pipeline earlier, hoping they turn out for the best.

(This is often called the “Cobra Effect,” which refers to when the British government paid people in Dehli for each dead, venomous snake they turned in during their colonial rule. They wanted to get ride of them. So what did people do? They started breeding cobras like crazy, and the number of cobras only increased.)

But close rate is a much more difficult metric to “game.” Closed won vs. closed lost is pretty black and white. Did they sign and pay? Or didn’t they? 

Okay, the table set. It’s time to eat.

Close rate’s important, so how do you increase it?

Here are five points to start with:

1. Measure and improve close rates one stage at a time.
2. Break down “closing” into a series of smaller skillsets.
3. Shape your message when won/loss decisions are made.
4. Measure and manage your personal tipping point.
5. Reset your definition of productivity.

1/ Measure and improve close rates one stage at a time.

Choosing to buy something isn’t making “a” decision.

It’s making a series of small decisions that add up throughout the buying process. Which means:

• Close rates increase when you win repeatedly, at every stage.
• Close rates can decrease at any point in the buying process.

In other words, your close rate is the average of every stage’s close rate in the cycle.

Which means that if you’re not already calculating your close rate by stage, you should, to:

→Understand the value of your personal, discounted pipeline.

Different reps have different close rates at each stage in the process. So relying on "raw" pipeline values, or even discounted pipeline applying default rates, gives you false signals.

For example, let’s say two reps have the exact same pipeline. The same number of deals, in the same stages, with the same forecasted contract value.

Look at the difference in discounted pipeline, using their individual close rates for each stage:

vs. 

Again, they both have the same deals, in the same stages. But very different forecasts.

677K vs. 508K.

→Focus on a smaller set of stage-specific close rates.

It’s hard to approach a composite metric like close rate when you’re only looking at it in the aggregate. Instead, try to:

1. Break out new pipeline stages based on buying behaviors.
2. Assign clear exit criteria to move stage → stage.
3. Look for the lowest close rates by stage.
4. Ask, what’s preventing them from moving forward?
5. Pin point their fear / doubts / uncertainty.
6. Intentionally address it in the prior stage.
7. Repeat, from the lowest → highest close rate.

In the example we used above, I’d suspect Rep #2 needs to sharpen their discovery skills.

They win a far lower percentage of deals through Stage 2 (20%) than Rep #1 (who wins 55%).

That's likely because Rep A has figured out how to go deep on quantifying pain that relates to an exec-level priority.
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2/ Break down “closing” into a series of smaller skillsets.

Related to this last point, a lot of us have a bad habit of referring to reps as “closers.” As if it’s a skill some have, others don’t.

Closing isn’t a skill. It’s an outcome. The byproduct of a long list of skills working together.

The rep who...

1. Finds and frames a high-cost, high-priority problem.
2. Develops committed, high-influence deal champions.
3. Builds consensus across a team on the right approach.
4. Gains executive-level attention by painting a bold vision.
5. Crafts a case for investment & change with a compelling narrative.
6. Maintains genuine urgency and follow-through with a mutual plan.
7. Gracefully navigates blockers that come up along the way.

...is a "closer."

Yet too many drive-by managers will tell a rep who’s behind on quota, “Just focus on closing!”

Here's my analogy for that.

That's like standing in a kitchen, feeling hungry, and someone walks by eating a warm, crumbly, delicious scone and they say, “Just make a scone!” and you think, “I’d love to… how?

Well, there's a specific set of ingredients that all add up into the finished product. And just like you can’t try baking a scone’s ingredients first, then mixing them after, there's a sequence. Plus, if you try to turn up the heat to bake (close) faster, you’ll just burn your scones (buyers).

(What’s with the strange scone analogy you ask? Well, dear reader, I’m drafting this blog post with my thumbs on an iPhone, on an 11 hour flight home from Copenhagen with a dead laptop, after eating an incredible scone in the airport. And I’m hungry, wishing I bought a second.)

3/ Shape your message when decisions are being made.

Out of all the skills above, there are two that rise above and influence close rates the most:

1. Building and testing committed champions.
2. Building a compelling narrative.

The reason is that every “micro” decision that’s made throughout the buying process will happen during internal meetings — not sales meetings. Without sales reps in the room.

During the conversations that happen about you, without you.

Which makes controlling your message, especially when you’re not directly sitting at the proverbial decision table, key. And entirely possible when you focus on winning in writing.

Like we covered in The Build Loop, you'll do this by creating champions, by creating a written business case:

4/ Measure and manage your personal tipping point.

The tipping point is when new gains in pipeline coverage require too much of your TEA to manage, so you experience too large of a drop in close rates and average contract values.

This is entirely personal to you, because it’s based on factors like your level:

• Deal complexity
• Skill & experience
• Style & energy

The tipping points for someone in mid-market vs. enterprise will be different. As are the tipping points for a first year seller, and someone who’s sold for a decade.

Now, here’s why this is a powerful idea.

I was recently catching up with a friend, Justin Hastings, who’s a Strategic AE. He was telling me how he had his pick of 30 enterprises to fill out his target account list at the start of last year.

Then, he did something most reps would call crazy:

I took the top 7 accounts I felt were a good match after some deep research, and I gave away all the others to other reps. Sure, I could have kept all 30, but I knew I didn’t have the bandwidth to run a quality process like I wanted to across more than 7.

In fact, I went so deep on 3 accounts, with over 100 meetings in a year inside one company, that I blew my annual number out of the water after just closing that one deal alone.

Get this. That massive deal he referenced? That took 4-5 meetings a week, every week, during a 4-month POC phase. Which just wouldn't have been possible while trying to work 30+ accounts.

My comment to him after? "You might as well be on their payroll as an internal consultant at that point. You probably knew more about their business than most employees."

So, why did Justin make the call to “give away” other accounts? He knows his tipping point.

He knew he could increase his ACV and close rate to a point that outweighed the gains of a few (or many) more accounts in his target list.

So how do you measure and manage to your tipping point?

1. Add up how much time you invest per deal, in each stage.
   
   We'd track this in a good old timesheet, similar to how consultants track time spent on different projects. But you can use tools like Timeular to make this an easier process.
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2. Once you get a baseline, start to drive toward zero time selling, as Andy Paul says.
   
   Andy's point is that as you start to sharpen your sales skills and process, you'll drive down the time you need to manage an opportunity. Which also means you'll start to operate below your tipping point — and then, you can increase the total number of opportunities.
   
   Adding opportunities in that moment is how you'll drive more revenue.

5/ Reset your definition of productivity.

The conversation around sales productivity is often framed in a way that's not very helpful.

The question most people ask is:

How do we help reps save time to increase their revenue-generating activity?

When the question they should be asking is:

What’s the fastest path to revenue?

Here's the difference:

• The first question = addition and subtraction. Less time per task, and more tasks completed.
• The second question = multiplication. It’s doubling-down on the highest-impact activity.

Activity is always a fallback for sellers who try to win by force — not finesse — when they’re falling short. Which is often counterproductive if you’re in an enterprise or strategic role.

For example, pressing send on a template follow-up email, while “link-stacking” (adding a stack of hyperlinks to enablement decks and case studies) is fast. You can ship out a lot of those.

But if buyers don’t read or use them to guide internal buying conversations, what’s the point?

Better to spend more time crafting a business case. Something that buyers will use to guide dozens of internal conversations.

(Which, by the way, Fluint can help you with — grab an early access onboarding slot here.)