Closed-won and closed-lost are two essential metrics for B2B companies. Assuming your B2B company uses a sales funnel, you should track these metrics. Tracking your B2B company's closed-won and closed-lost opportunities will provide insight into its success. A high number of closed-won opportunities indicates your B2B company's sales strategy is working. A high number of closed-lost opportunities, conversely, is typically a sign of an underlying problem. What's the difference between closed-won and closed-lost exactly?
What Is Closed-Won?
Closed-won is the number of prospects at the bottom of your B2B company's sales funnel whom you successfully converted into buyers. Converting a prospect into a buyer, of course, involves closing the deal. Once you've nurtured a prospect to the bottom stage of your B2B company's sales funnel, you'll need to pitch a product or service while persuading the prospect to make a purchase. Closed-won opportunities represent the number of prospects who agreed to make a purchase.
What Is a Closed-Lost?
Closed-lost, on the other hand, is the number of prospects at any stage in your B2B company's sales funnel whom you failed to convert into buyers. Conversion rates in the B2B industry can vary. Some B2B companies will naturally experience higher conversion rates than others. According to one report, though, most B2B companies experience an average conversion rate of about 2% to 3%. Closed-lost opportunities are prospects whom rejected your sales pitch. They explicitly declined to make a purchase.
Differences Between Closed-Won and Closed-Lost
In the B2B industry, closed-won opportunities are prospects at the bottom of a sales funnel whom agreed to make a purchase. Whether a prospect agrees to make a purchase or rejects your offer, you'll essentially close that sales opportunity. Closed-won specifically refers to the number of deals that you won. Prospects who agree to make a purchase are converted into buyers. At the same time, you'll close that opportunity while winning a deal.
Closed-lost are prospects who reject your sales offer. They still involve a closed opportunity. Rather than winning a deal, though, you'll lose a deal with closed-lost opportunities. When a prospect rejects your sales offer, you'll have to count him or her as a closed-lost opportunity.
It's important to note that closed-won opportunities occur exclusively at the bottom of a sales funnel. In comparison, closed-lost opportunities can occur anywhere in a sales funnel. Prospects at the top or middle of your B2B company's sales funnel may reject your sales offer. You'll have to close those opportunities while counting them as closed-lost opportunities.