The sales conversion rate is an important sales metric that helps sales managers and executives to measure the effectiveness of their sales team at converting leads into new customers. Sales conversion rates are an important KPI that helps to align sales and marketing teams and to determine the quality of leads.
Sales conversion rates vary tremendously across industries, business lines, product offerings, and companies, so it's important to analyze it in conjunction with past historical performance, industry benchmarks, and the like.
At the end of the day, the goal of every marketing and sales team is to generate new business, so sales conversion metrics are vital in understanding ROI of your investments in these areas as well as the ultimate health of a business.
How to calculate sales conversion rate?
You can calculate your sales conversion rate by dividing the number of leads that are converted into sales by the number of qualified leads your team has received. Then simply multiply this figure by 100 to get a percentage result.
In most marketing and sales funnels, conversion rates are tracked this way: by measuring qualified leads against net new sales wins.
More on the sales conversion rate
The sales conversion rate should be analyzed in accordance with historical data as well as across different time periods (for example: weekly, monthly, quarterly, and annually).
Most often, conversion rates are (and should be) further segmented by campaign type, program, channel, geography, and so on.
It’s useful to analyze the evolution of your sales conversion rate through a well defined sales funnel that has pre-defined stages. This commonly comes in the form of lifecycle stages, where leads go through various stage changes from, for example, marketing accepted leads → marketing qualified leads → sales qualified leads and so on.
Tactics to improve your sales conversion rate
While there are innumerable ways to improve sales conversion rates, some of which vary from company to company and from industry to industry, we wanted to highlight a few tactics that everyone can implement to optimize prospect conversion in the marketing and sales funnels. Here are 10 that we think you should consider:
- Dial in your website: a website that's optimized for conversions, as opposed to traffic alone, is one of the best ways to improve sales conversion. Making sure that you have clear call-to-actions, visually appealing landing pages, and technically sound SEO configurations will make sure that you not only generate more of that valuable traffic, but that you're actually able to make something of that traffic.
- Create! Creating relevant, value-adding content that attracts customers will help them view your solution as a useful tool. Whether it be in the form of blogs, videos, white-papers of eBooks, the opportunity is endless.
- Target the right leads: this is one instance where it's fair to argue that quality > quantity. You can generate all the traffic in the world, but if the people that see your product/service aren't relevant to your business, sales conversion is going to suffer. Make sure that you align your marketing and sales functions to understand why people want to purchase your offering, and then orient your efforts to appeal to the specific pains of theirs that you're uniquely able to solve. You can better understand where leads fall in your funnel using easy-to-understand sales dashboards.
- Improve product discovery: nowadays, all it takes is a laptop and an idea to start a business. So, there are tons of things that your prospects have to look at, and compare you against. Simply put, any time that they give to evaluating your solution is a gift: make the most of it. People don't want to spend hours on product demo calls. They want to be able to discover solutions, at least at first, in autonomy. Offering free trials, product discovery videos, and other product showcases can be an impactful way to make better use of your leads' time and improve your conversion rates.
- A/B test: whether tweaking your CTAs, landing pages, or email subject lines and/or copy, having a clear understanding of what you're testing, and whether those tests have a notable impact on results, can be an effective way to improve conversion rates.
- Live-chat: improving communications and access to support, with live chat functionality (such as Drift) is a great way to increase communication with leads - its an easy and desirable way for prospects to engage with your team (and for your team to convert those leads into sales).
- Re-target: retargeting leads that you've identified as having visited your website, whether via Google, Facebook or other retargeting platforms, is a great way to increase conversion. This presents an opportunity to send automated, and more contextualized, content (e.g. via email) that can include relevant information and offers that incentivize a purchase.
- Personalize: the human touch is a wonderful, yet often forgotten, aspect of the sales process that can make or break conversion rates. Personalizing calls, emails, and general content can make all the difference. One way to do this? Consider adding personalized videos to your outreach to help leads understand that you're truly invested in earning their time, and their business.
- Social monitoring: by monitoring keywords that are relevant to your offering is a great way to identify leads at all stages of the sales funnel. Whether on Twitter, Quora, or a site that are highly contextualized around your business, you're likely to find those leads that are more likely to convert to a sale.
- Incentivize referrals: it never hurts to ask! By incentivizing, or at least asking for, referrals from your existing prospects and customers, you can quickly improve your sales conversion rate.
We hope these tactics help!