How to Calculate and Improve Your Lead-to-Close Win Rate
Are your qualified leads converting into clients at a rate above or below the global average? Find out where you stand with our easy-to-use win rate calculator.
What Percentage of Your Qualified Leads Turn into Customers?
This is your proposal win rate (Winning percentage)—a key performance indicator for B2B businesses and professionals. You might even know this number from your last quarterly review.
However, while the proposal win rate is often celebrated, it’s just a number unless it’s backed by real insight. In this guide, we’ll show you how to move beyond simply calculating your win rate to fully understanding the story behind your lead-to-sales process.
What is a B2B Lead-to-Close Win Rate?
Your lead-to-close win rate (also known as your bid-to-win ratio) represents the percentage of proposals that turn into successful deals. For instance, if your sales team handles a pipeline of 225 highly qualified leads annually and closes 45 deals, your win rate would be 20%.
You can take it a step further by calculating win rates for specific categories, like new business opportunities or contract renewals, by focusing on the number of RFPs (Requests for Proposals) submitted versus those won.
Keep in mind that win rates tend to be higher when you’re the incumbent, and lower when competing as a challenger. As the saying goes, “It’s easier to retain a customer than to find a new one.”
Why Is Your Lead-to-Close Win Rate Critical in B2B Sales?
Your win rate gives you a clear picture of your overall sales funnel’s health. It not only reflects how effective your marketing team is at generating quality leads but also how well your sales team converts those leads into paying customers. Although there are many metrics you can track, focusing on your win rate helps you understand:
- Are you chasing the right opportunities? Compare your winning percentage with your participation rate (the percentage of leads you respond to vs. those received). A high participation rate but low win rate might indicate that you need to be more selective.
- Are your process changes working? If you make changes—like dedicating more time to writing personalized proposals—use your win rate to measure whether those adjustments are paying off.
- How much revenue can you expect to win? By maintaining a consistent win rate, you can forecast revenue more accurately and allocate resources more efficiently.
What is a Good Proposal Win Rate?
According to research from Growth Hackers, the average B2B sales team wins around 18% of the RFPs they submit. So if your win rate is between 15-21%, you’re performing on par with one-third of global teams.
However, win rates vary by industry and company size. For example, mid-market and enterprise companies often enjoy win rates around 20-25%, while smaller companies typically fall between 12-15%. Here’s a snapshot of industry win rates:
- Advertising: 16%
- Financial Services: 18%
- Healthcare: 19%
- Insurance: 17%
- Non-profit: 22%
- Software: 17%
- Technology: 13%
How Do You Analyze Your Win Rate?
Once you’ve calculated your win rate, it’s time to dive deeper. Ask questions like: Why do we win certain deals and lose others? Did we do something different last quarter that boosted our win rate? Are there gaps in our lead generation or sales funnel that could be affecting our win rate?
To dig deeper, start with a win/loss analysis to track performance throughout your entire sales funnel.
- Participation rate: Are you responding to a healthy percentage of leads? If your participation rate is lower than the 83% average, you may need to adjust your go/no-go criteria to ensure you’re not missing opportunities.
- Advancement rate: How many RFPs make it to the shortlist? If your advancement rate is lower than the 42% average, you may need to enhance the customization and relevance of your proposals.
- Win rate: If your winning percentage is below 18%, focus on improving sales team alignment and refining your proposal process.
Uncover the Reasons Behind Your Wins and Losses
Your win rate alone won’t tell you why you’re winning or losing deals. The key lies in feedback from both buyers and your internal team. Buyers might say your proposal didn’t stand out, while your team could feel like they didn’t have enough competitive intelligence.
To analyze this qualitative feedback, consider using a win/loss analysis template to categorize feedback into themes. By doing this, you’ll quickly identify areas where you can improve or capitalize on strengths.
5 Questions to Ask Buyers After a Loss:
- What was your impression of our proposal?
- How did you feel about our solution overall?
- Which alternative solution did you choose, if any?
- What was the biggest factor in your decision?
- What could we have done differently to win the deal?
Calculate Your Cost Per Bid
It’s one thing to win RFPs, but another to ensure profitability. Tracking your cost per bid and comparing it to your win rate and ROI helps you prioritize higher-value leads and optimize proposal resources.
For example, if you have a low ROI but a high win rate, it might be time to focus on higher-value opportunities. Conversely, if your cost per bid is low but your win rate isn’t where you want it, consider investing more in your proposal process.
How to Boost Your Lead-to-Sales Win Rate
By analyzing your win/loss insights, you can tailor your strategy to increase your win rate. Here are a few best practices to get started:
- Follow a Consistent Process: Make sure your team has a clear, step-by-step approach to respond to RFPs. Break down tasks and assign them to team members for smoother execution.
- Implement a Strong Go/No-Go Process: Increase your win potential by being selective about the opportunities you pursue. Build this process into your intake form so that it becomes automatic.
- Write Customized Proposals Faster: While boilerplate proposals rarely win, personalizing every response can be time-consuming. Speed up the process by building a content library from past proposals, allowing you to tweak existing responses instead of starting from scratch.
With these strategies, you’ll not only understand your lead-to-close win rate better but also learn how to improve it and win more clients.
Final Words on How to Improve your Lead-to-Sales Win Rate
In conclusion, understanding and improving your lead-to-close win rate is vital to the long-term success of your business. By regularly calculating this key metric and analyzing the factors behind each win and loss, you can gain valuable insights into your sales process, helping you optimize everything from lead qualification to proposal crafting. Tracking your participation rate, advancement rate, and overall win rate will give you a clearer picture of where improvements are needed, while conducting win/loss analysis helps uncover the true reasons behind your performance.
Remember, boosting your win rate isn’t just about submitting more proposals—it’s about submitting the right proposals to the right opportunities, with a tailored approach that resonates with the buyer. From refining your go/no-go process to crafting personalized, compelling proposals that stand out, each step you take toward improvement can yield significant gains in your success rate.
Ultimately, a strong winning percentage not only reflects a healthy sales funnel but also positions your team to grow and scale more efficiently, drive higher revenue, and build stronger, lasting relationships with clients. By committing to continuous improvement and strategic decision-making, you can transform your win rate into a powerful driver of business growth and profitability.
Growth Hackers is an award-winning lead generation company helping businesses from all over the world grow. There is no fluff with Growth Hackers. We help entrepreneurs and business owners create sales funnels that work, generate qualified leads, optimize their conversion rate, gather and analyze data analytics, acquire and retain users and increase sales. We go further than brand visibility. We make sure that the strategies we implement move the needle so your business grow, thrive, succeed and reach new heights. If you too want your B2B business to not only have more leads on your pipeline but also convert those leads into loyal customers, get in touch with Growth Hackers today so we can discuss about your lead generation and sales enablement process so we can craft a personalized growth strategy. You’re just one message away to make your company a success.
