How do You calculate your win rate ratio?
But first, should you?
First things first—what are we talking about? The Win Rate Ratio (WRR) is typically defined as the percentage of sales opportunities that a salesperson or sales team successfully closes out of the total number of opportunities pursued. It is a frequently used metric to evaluate sales performance.
Do you know the difference between “theory” and “practice”?
In theory, the WRR seems like:
A clear performance indicator: it provides a straightforward measure of how effective a salesperson is at converting opportunities into actual sales.
A focus on quality over quantity: a low win rate ratio should encourage salespeople to focus on high-quality leads and opportunities rather than chasing every potential deal, improving overall efficiency and effectiveness.
A good benchmarking tool: it allows for easy comparison across different salespeople, teams, or periods, helping identify best practices and areas needing improvement.
A strong goal-setting metric: it seems well-suited to setting performance targets.
In theory they are the same. In theory only.
However, in practice:
Lacks context: the metric does not provide insights into the reasons behind wins or losses. It doesn’t account for the complexity or size of deals, market conditions, or other factors that can vary significantly. Without context, much is “untold” and therefore lost, diminishing the benefits of this KPI.
Risk of focusing on easier wins: when WRR becomes a key KPI for evaluation, salespeople might focus only on easier wins (if such a thing exists) to maintain a high win rate, potentially avoiding more challenging but valuable opportunities for the company.
Potential for short-term focus: Salespeople might push for closing deals quickly rather than nurturing long-term relationships that can yield higher returns. This approach can be particularly detrimental if your organization is launching something new in the market.
In conclusion, before using the WRR as an evaluation tool, be sure to understand what you really want to measure. Then ask yourself if your product, solution, and market conditions offer enough similarities to ensure that you’re comparing apples to apples across the board and over time. In another words, know the game you are in and see if this tool makes sense. Remember, a hammer can be a great tool for a blacksmith but a terrible one for a glass master.