Conversion rate” can refer to any of four different meanings, depending on the context of the marketing or sales conversation.  As a marketing director, manager, or CMO, you deal with each of these. 

  • Landing Page Conversion Rate 
  • Leads Pipeline Stage to Stage Conversion Rate 
  • Lead to Opportunity Conversion Rate 
  • End to End Conversion Rate 

Landing Page Conversion Rate   This is the fraction of unique visitors who reach our landing page and then successfully fill out a lead form or take some other conversion action.  If you have 1,000 unique visitors on your campaign’s landing page, and 100 fill out a form with valid contact information, then you have a 10% conversion rate on your landing page.  You should always be working on improvements to your offer, to your call to action and with other page elements to improve this conversion rate.  A/B testing is a good tool to improve landing page conversion rates, although other tools such as departure detection can be used. 

Leads Pipeline Stage to Stage Conversion Rate    We calculate stage to stage conversion rate in the leads pipeline, like from lead to qualified, as the fraction of the first stage that survives to the next.  If we receive 100 leads and 45 are qualified, the lead to qualified conversion rate is 45%. 

Lead to Opportunity Conversion Rate   This is hard-core sales and marketing stuff.  In every lead generation meeting that you attend, you will need to discuss your lead to opportunity conversion rate.  If it is too low, you are spending too much money to buy leads that cannot be converted to legitimate opportunities.  If your conversion rate is too high, you may be over-targeting and limiting the scope of your campaign to too narrow of an audience.  This can yield too few qualified leads. 

End to End Conversion Rate    This is the conversion rate that is best recognized by your VP of Sales, CSO, COO, or CEO.   This is defined as fraction of all leads that become closed-won opportunities.  If 100 leads result in 32 sales, then our end to end conversion rate is 32% for the cohort of leads examined. 

Having campaign hours called out, we can now calculate our monthly spend for all lead sources, including both advertising and other marketing campaign spending.   

Here, the Advertising Spend values are just copied in from our Google AdWords, Facebook, and LinkedIn accounts.   

The spend values for Sales Farming, Nurturing, SEO Content Development, and Free Trial are each calculated by multiplying the hours applied (from the table above) by the respective hourly cost that we gathered earlier.  

Lead Pipeline State to Stage Conversion Rate

There is a conversion rate from each stage of a leads pipeline to the next. 

These conversion rates can be easy to analyze if you have Salesforce or a similar tool that will let you count how many leads from your original cohort have reached each stage.   

Here, as an example, we have tracked a cohort of our leads and calculated the totals shown here.  We enter these example leads into the amber-shaded column.  Our stage-to-stage conversion rates are shown in the light blue-shaded column. 

You can see that our conversion rate from opportunity to closed-won (sold) is 35.2%, as an example:

We have also calculated our average deal size at $847.72 by dividing our total dollar sales by the number of deals closed. 

Get the Free Model

You can get an example leads pipeline model referenced here, and a PDF copy of “Guide to Leads Pipelines for the CMO”, by downloading the model (in Excel spreadsheet form) and guide.

Free Model

With the Excel spreadsheet, you can follow the example data shown here.  You can also plug in your own data to build your own pipeline model and forecast your sales in any future month. 

Follow us for the most current, most exciting, most helpful news and tools from Blackstone+Cullen.

Would you like to be notified on our next post?

Provide your name and email below and we'll send you a note.

Name

Your Email (required)