Fixed/Fluid Closing Rate

Derrick Woolfson

Question: How do you calculate your closing rate? There has been a lot of conversation regarding the fact that if the lead were to come in the "previous" month, but closes in the current month that it should not count towards your "closing rate" for that specific source. The issue with that argument is that less than 20% closes within the same month. Albeit, it is important to know how many leads you closed in that month (especially for used), but if the lead sold (for that source regardless of the month it closed) it should count. How do you guys handle it? 

Pierre Legault

Unfortunately you are right and it becomes almost impossible to have 100% accuracy. The industry kind of set a base rule where you calculate the number of deals within a date range divided by the number of new leads within that same date range. At the end of the year, the difference is minimal. As an example, you get 1000 fresh leads in August and sell 250 vehicles in August from any leads even if some of those leads came in the month before, your closing ratio will be 25%.

Derrick Woolfson

Exactly, and really I offer that the benchmark should be a "trend," and in doing so you can start to see what the average closing rate is for the lead source. But in many cases (as you mentioned) you have many of the deals that close coming from leads from the previous month.

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