Sales Pipeline Conversion Rates: Everything You Need to Know
Sales pipeline conversion rates are statistical figures that is critical in all forms of sales and marketing. While it may seem like a fact of life to most of us in the world of sales, there’s a lot more that goes into it than just figures on paper. At Acquirent, we understand that this number is more than just a goal or something set it stone – it provides an opportunity to learn more about our customer base and apply it to the real world.
What is a conversion rate, and how does it apply to my business? In this blog, we explore everything you need to know about calculating conversion rates, applying them to real world examples, and improving upon them with future sales.
What is a Sales Pipeline Conversion Rate?
Conversion rates are important for understanding how prospective leads flow through your sales pipeline. It calculates the number of leads that move from one stage to the next, and is represented by this simple formula:
Conversion Rate = # of potential buyers that moved to next stage / # of potential buyers at present stage
This can be applied to a variety of sales and marketing campaigns. For instance, you can use conversion rates as a measure the efficacy of a lead generation campaign. By dividing the number of appointments set by the number of leads called, you can see how effective your campaign was.
While a conversion rate is a key indicator in a sales process, it relies on context. A 2% conversion rate might be a sign of enormous success for some campaigns, but for more simple tasks can also be extremely low. More than a signifier of success, it is a tool for researching best practices and ensuring the long-term success of a campaign.
Sales Pipeline Conversion Rate Applications
The formula for conversion rates is simple, meaning it has tremendous potential for applications. It can be used to:
- Identify the best channels for lead generation
- Analyze the success of individual salespeople
- Estimate the health of a sales pipeline
- Determine which lead generation strategies are netting the strongest success
This list provides only a few of the vast applications that this number holds. It relies on good record-keeping and data collection to function properly. More, it needs to be used within the context of a broader sales strategy.
Applying Conversion Rates to a Campaign
Conversion rates can be helpful for determining whether a campaign was successful, but the reasons for success or failure must be determined outside of the numbers themselves. It is best used in comparison with adjacent campaigns to calculate efficacy. For instance, a skilled sales team calling from two different lead lists can use a conversion rate comparison to determine the quality of leads being called. It can also be used to hone in on best sales script strategies that salespeople are using.
How Acquirent Uses Conversion Rates in Our Sales Strategy
Clients approach us coming from across industries and strategies. While we have worked with companies ranging from small startups to the Fortune 500, many companies might not understand the ideal approach to reaching their targets.
Conversion rates are used as part of a process of trial and error that leads itself to finding the best way to close deals for a particular client. The logistics of this, of course, depend on unique clients. A lead generation strategy might initially begin by trying to create a script catered around a buyer persona we believe matches your product or service. By testing this and determining the conversion rate, we can fine-tune the process.
Our salespeople aren’t just good at lead generation and closing deals – they’re also experts at gathering information about what your customers are looking for. By pivoting off of knowledge of your product or service, we can tell you what features and benefits actually interest your customers, and back this up with data insights.
Conversion rates are important, but they’re only a part of the story. Acquirent can help you fine tune your process so that you have the full picture of your customer, and back it up with sales success. Contact us today for more information about our services.