Timo Rein of Pipedrive: SMB Sales Pros in U.S. Lag Behind Global Counterparts in Closing Deals

Sales is the universal language of business. Closing deals — and closing them efficiently — is key to the growth and success of any small business. But, according to a study done by Pipedrive, a cloud-based application aimed at helping SMBs close sales deals more efficiently, countries like South Africa, Brazil, Chile and others are finding higher levels of success closing deals than U.S.-based SMBs.

Timo Rein, co-founder and President of Pipedrive, shares with us more findings from the survey, including which countries close deals fastest, and are able to do so with minimal effort.  He also shares why he feels U.S. small businesses lag so far behind other countries in sales efficiency and effectiveness.  

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timo reinSmall Business Trends: Before we jump in and start talking about some of the survey research you guys did around the world’s best closers, when it comes to closing the sales deal, maybe you can give us a little bit of a background as to what you guys do over at Pipedrive.

Timo Rein: We’re building a software for people who work in B2B Sales, mostly, and are closing deals every day, and they have quite high volume deals in terms of their deal size. We do have customers literally from all over the globe, and that has given us a lot of encouragement that what we’ve been trying to do is something right for them.

Small Business Trends: You mention in a blog post that you have customers in at least 140 different countries, so this study you did really focuses on sales folks, in SMB businesses from around the world, right?

Timo Rein: Yeah, that’s absolutely right. That gives us a good view into how things are going in the world of sales.

Small Business Trends: I’m surprised, because maybe I look at it through the lens of somebody who’s pretty much focusing on the United States, but right off the top, “The world’s best closers are not in the USofA, they are in South Africa.” We’re not even in the medal consideration here, because Brazil is second, and Chile is third. Tell us a little bit about why South African sales folks seem to be the best closers.

Timo Rein: I need to give a bit of context around this, because the question we went in with was, “In just a wonder of how different is sales around the world, in terms of the work that sales people put in?” What we did was use the tens of thousands of users data, and analyzed metadata that we generate, and put that all together into a large database, which was literally the number of deals that people had and close, the number of activities that they initiate, mark complete, and so on.

Conversion pretty much means getting from one stage to another, through the whole sales process, so that when you talk to, let’s say 10 people, how many people you end up as your buyers, and whoever has a better conversion, has more buyers at the end. By that metric alone, when we look at it, South Africans are the best floaters, or they are the best converters, let’s put it that way.

You have Brazil, and Chile, and countries from Nordics, Denmark and Sweden right up there. Yes, US doesn’t even come close in that metric. It’s actually quite towards the bottom of the list, along with other countries, which are also large, like Russia, Canada, Poland in there.

Small Business Trends: Closing is one aspect, but what about efficiency, the average time to close? It looks like Brazil is actually in the top spot, and South Africa is following up from them. Tell us a little bit about the average time of closing and how everything works there.

Timo Rein: We knew going in that you can’t just take one metric, and say “Okay, that means that you are the best in sales.” There’s so many other things. Conversion rate, that was one. The second thing that we were really interested in was how much time it actually takes for a sales person to close the deal, from the very opening of the opportunity, and then finish with the sale. How many weeks, how many months?

That list actually had Brazil in the top. It seems that they get to the final “yes” quickest. It seems that it takes the least time for them to close a deal, but South Africa’s really up there, as well, along with Chile. The countries that don’t enjoy the quick road to “yes” are mostly European countries, along with Australia and Canada.

Small Business Trends: You have another thing here that you call, “Having the magic touch.” After looking at Brazil and South Africa, and Chile, who seem to be both efficient, and effective, in their closing, Spain is the one that comes up top with the magic touch. Maybe you could tell us what exactly the magic touch is, and why does Spain have it?

Timo Rein: Why they have it, I really don’t know, to be honest, but what it meant for the study was we just looked at how little a sales person has to do to close a sale. How many activities for the prospect you need to be completing, before you can close a sale? How many calls are placed, how many emails are sent, how many meetings are held, with each prospect, before the prospect decides to buy. In that respect, Spain seemed to have the magic touch in terms of they need the smallest amount of activities to close, and there’s Denmark, Netherlands, up there as well. Some other Nordic countries.

At the other end, you have Russia, and they almost double the amount of things to do before they take an action move to close. Again, U.S. is towards the bottom.

Small Business Trends: Looking at the conversion rates, the U.S. is on the bottom end of that. If we look at efficiency, we’re middle of the pack there. And then we don’t have the magic touch. Why do you think sales folks in the U.S., particularly SMB salespeople in the USA, are lagging behind some of these other countries?

Timo Rein: The obvious thing that comes to mind is that you have to look at the context of everything, and development of an economy, development of sales, development of the options that buyers have, that comes into play, and it is possible that the more competition you have in developed nations, that forces the sales cycle to be longer. Buyers have more options, and more sales teams competing for their attention. That all comes into play.

When you look at the conditions, I do believe that people in South Africa, Brazil, Chile, they seem to have it the easiest, one way or the other, when you look at just the condition. Let’s say that I want to come up with the perfect excuse why the U.S. doesn’t show up higher here in these metrics. Then we can say that it’s because of the toughest conditions, because United States, Canada, United Kingdom, to some extent, Australia, they have a slower pace, slower conversions, lots of activities to the deal.

I have two conclusions here. Where you sell comes into play. There’s more “no’s” probably in a country like the U.S., and more work to be done, to actually close a deal. What is important with the context, is anybody who’s globally selling, they have customers not only in the U.S., but also international. It would be a benefit to learn about the different conditions in different areas.

Second point, I also don’t think that these averages, across industries, or countries, really matter. Everybody’s thinking about their own sales. People are selfish, as we all are, and what matters most is that you breakdown your performance, and you look to improve. In that respect, that study still is a good kicker, because it could force you to look at some of the good things that you can do, and there are at least two great goals here. There’s, “Can I have a better conversion?” Let’s just put it that way. From one stage to another, can I get more people to talk to me after my phone call, for example, or meet with me after my phone call, and stuff like that.

Small Business Trends: Are you seeing high adoption rates of applications like Pipedrive in countries outside of the U.S.?

Timo Rein: I don’t think so. First of all, we haven’t run a specific study [on that], but when we look at the overall numbers, there’s not a lot of difference in terms of adopting it.

Small Business Trends: So technology may not be one of the leading drivers of why certain countries are ahead in conversions, and efficiency, and have the magic touch. Maybe it’s more of the business culture, and the way things are done in those countries, as opposed to the technology that they use?

Timo Rein: Yeah, exactly. Obviously sales is an interaction between people who are strangers to each other, at first. Getting to know each other, starting an open, candid talk between these parties, that might be different when you have a country like the U.S., or Russia, or Brazil, or South Africa. I’m not saying that there are less barriers, but maybe the people have a way in these cultures to go through these barriers quicker.

Small Business Trends: Timo, where can people learn more about some of the findings here, but also more about Pipedrive, in general?

Timo Rein: Pipedrive.com. And you can sign up for a trial, or we have a blog, blog.pipedrive.com, which we use to publish the studies.

This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.

Brent Leary Brent Leary is the host of the Small Business Trends One-on-One interview series and co-founder of CRM Essentials LLC, an Atlanta-based CRM advisory firm covering tools and strategies for improving business relationships. Brent is a CRM industry analyst, advisor, author, speaker and award-winning blogger.