I probably talk to more than 10 people per day who are involved in selling Post Frame Structures. Since I’m trying to learn all the time, I’ll usually ask an important question –
“What kind of close ratio do you have when you bid?”
The answer to this question certainly varies from industry to industry and can vary depending on geography, business model, and other factors. Still, what I’ve found is that the overwhelming response puts the close ratio in the neighborhood of only 10 to 20 percent. It’s a little disturbing to look back and observe that the majority of one’s time is spent in an effort that yields no result.
So, I’m wondering a couple of things I think we should all discuss – First…
Why is the close ratio in the Post Frame Industry so low?
Here are some possibilities, but I would like to invite other suggestions:
- It is relatively easy to quote post frame versus something like custom homes. It may not seem like it at nine o’clock at night but it probably takes less time per square foot to bid post frame than more complicated residential and commercial structures.
- There are so many Post Frame contractors per Post Frame sales dollars. I don’t know if anyone has done a study on this. Anecdotally, it seems there are a lot of small contractors who populate this industry and are all seeking their piece of the pie.
The second thing I’m wondering is:
What can any individual company do to increase their close ratio?
Here are some things I routinely hear:
- Get the quote back more quickly than the competition.
- Present the quote in person – don’t just email.
- Include a professional presentation – make sure the contract proposal is thorough and professional – include a 3D graphics model of the building.
When you analyze how much of your time is spent pursuing the business and bidding, these become crucial questions.
- Why are our closing ratios so low?
- What can we do to make those ratios better?
Please share your thoughts, and let’s have some dialogue!