When it comes to your sales process, knowing what works and what doesn't will pave the way to bigger profits.
By Candice Gervase, Salesforce Team Manager, JMP Statistical Discovery
January 21, 2025
A sales conversion rate measures the percentage of potential customers who take a desired action after a sales pitch or offer. It indicates the effectiveness of your sales efforts. This calculation contains key insights that can help your organization improve its operations and sales efficiency.
Spot and address pipeline gaps that threaten your forecast. Discover how with Sales Analytics from Sales Cloud.
Tracking your sales conversion rate with sales analytics software is an important part of sales analysis. It helps teams understand how effective their sales process is and how to align their sales and marketing efforts to attract high-quality leads. It can also give sales leaders a better view of the current state of their companies and identify areas for improvement. Let's explore the importance of tracking your sales conversion rate.
Your conversion rate measures the effectiveness of your sales process. Typically, a high conversion rate is better than a lower one because it indicates that a large percentage of your prospects are taking the desired action, such as making a purchase or signing up for a newsletter. The more people who take the desired action and engage, the more successful your sales process is likely to be.
You can improve your sales effectiveness and conversion rate by targeting high-quality leads. These are leads who are more likely to convert based on their need for your product or service, how engaged they are with your brand, their buying authority, and their readiness to buy. Additionally, your sales team should engage in regular sales tracking. Regularly review your current sales strategies against key performance indicators KPIs to identify successes and areas for improvement.
You can use your sales conversion rate to look at different data points — for example, how many people attend a webinar or open an email — to help you gauge customer interest. Your sales conversion rate also helps managers evaluate what pipeline goal to set for each sales rep, such as three or five times the target. Companies with a higher sales conversion rate can set a lower pipeline goal, while those with a lower rate should aim higher to increase it.
Calculating your sales conversion rate also helps you learn which customers are most engaged with your brand and more likely to close. You can use your customer relationship management (CRM) software to measure individual or segmented customer engagement, such as behavior patterns.
Sales CRMs also help reps score leads based on engagement, so it's easy to see where to focus their efforts. For example, attending a product demo signals more potential to buy than signing up for an email newsletter or visiting your website, so that prospect should receive a higher engagement score.
Use the following formula to calculate your sales conversion rate:
Number of sales ÷ Number of leads × 100
For example, if you had 100 leads and closed 27 deals, then your sales conversion rate is 27%.
27 ÷ 100 × 100 = 27
The first step to increasing your sales conversion rate is understanding why it may be high or low. Let's look at a few factors that can affect this:
If you have a million leads in your system, but more than half are low-quality, sales reps may struggle to convert them into buyers. What that happens, they may focus on unlikely leads instead of those with higher potential. A lead is considered low quality if their information is incorrect, they don't engage with your company, they don't have buying authority, or they just aren't an ideal fit for your product or service. A company with a lower number of high-quality leads will typically have a higher conversion rate. This is because it's easier to convert prospects who are engaged with your company, need your product, and are ready and able to buy.
Both marketing and sales teams are responsible for finding and nurturing high-quality leads. And understanding the difference between an SQL vs MQL — sales qualified lead versus marketing qualified lead — is key. A seamless handoff from marketing to sales can greatly improve your sales cycle speed and conversion rate.
If you make the buying process simple for prospects, you're likely to see higher conversion rates. On the flipside, complicated or disjointed processes may cause potential buyers to walk away. For example, organizations that have a complicated payment process may lose customers even as late as the point of sale. You can improve your conversion rates by removing barriers to make the process as easy as possible for prospects to make the purchase.
Increasing your sales conversion rate can provide many benefits for your company. Here are some ways to boost it.
Each prospect has unique preferences and needs. When a message is generic or doesn't apply to them, they may delete it and write off the company altogether. Personalization should go a step further than simply using a prospect's name in your outreach. The content must be relevant to their needs. For example, a sales rep meets a prospect at a trade show and sends them an email referencing their conversation and providing a white paper that addresses challenges they discussed. The prospect feels valued, knowing the rep was paying attention and is invested in trying to solve their problem.
Organizations that use a customer relationship management (CRM) platform, such as Sales Cloud, can build sales and marketing journeys in a single location. A comprehensive view of pipeline data makes it easier to track conversions, identify what's working and what's not, and make tweaks for improvement. You can also centralize marketing campaigns, lead nurturing, and other data from your outreach efforts.
Sales dashboards provide key metric snapshots, giving sales and marketing visibility into data that can improve alignment. Critical metrics can be segmented by role with data updated in real time, so everyone always sees the latest information.
Many sales representatives rely on their intuition and experience to make decisions. While this can be effective when combined with data, gut feelings should never replace concrete facts. By using a sales analytics tool to calculate metrics instead of making decisions based on gut feelings, sales teams can get an accurate picture of where a lead stands.
Many organizations overlook their sales funnel, which helps them move prospects through the sales process methodically. As you get further down in the sales funnel, look at each prospect to see when you last interacted. For example, if a prospect is in the Interest stage of the funnel, and you want to move them to the Consideration stage, look at the last time you contacted them. It may just be a matter of following up. You can schedule these follow-up tasks and reminders right in Salesforce to make it easy.
Sales analytics software shows you a unified view of pipeline metrics, top opportunities, and weekly deal updates. You should review dashboards regularly to make sure you're not overlooking a hot lead, so you can easily move across the finish line. It's just as important to focus on refilling your pipeline with leads at the top of the funnel. You need to continuously increase your number of high-quality leads to keep your pipeline flowing.
By understanding where someone is in their buyer journey, you can communicate with them in the right channel, with the right message. Spamming prospects with irrelevant information is the fastest way to turn them off and inadvertently decrease your pipeline. Spend the extra time crafting a targeted message, attaching relevant content, and reaching out on a prospect's preferred channel based on how they've engaged with your brand so far. This shows that you understand their needs and respect their preferences. For example, sending a prospective customer a post-webinar survey asking about their experience and pain points is a good way to nurture the relationship and engage them with more content.
One of the easiest ways to increase conversions is through upselling products to existing customers. When you already understand your customer's needs and challenges, it's often easier to sell them on other products or services you offer. For example, a sales rep who's worked closely with a customer for the past year knows that they're expanding into a new market. They might suggest another product to this customer that will make their transition easier and provide additional benefits. That’s key, because relationships are the key to customer lifetime value and satisfaction.
The State of Sales report found that reps spend more than 70% of their time on non-selling tasks, giving them limited time for prospecting and developing relationships with potential customers. Automation can help sales reps with high-funnel targets meet their goals. By automating certain sales processes, such as email marketing and appointment scheduling, they can reclaim some of that time. Additionally, by analyzing customer engagement metrics, reps can identify what outreach strategies are working and determine which processes they can automate for higher productivity.
What could you do with AI-powered insights at your fingertips? Sell smarter, take action, and hit your forecasts.
Sales analytics software provides sales teams with accurate and actionable data, so they always know the next best action to take to increase conversions. Let's explore some key features to look for in a sales analytics solution.
Multiple factors contribute to sales conversion rates, making increasing them a complex process. But sales teams can start by using CRM data to optimize their sales funnels. They can identify opportunities in their current sales process where they may be falling short — such as identifying quality leads or lead nurturing — and come up with ways to improve their efforts and turn more prospects into customers. Every sales team should rely on sales analytics tools to gain these necessary insights, take the right actions, and increase their close percentage.
Spot and address pipeline gaps that threaten your forecast. Discover how with Sales Analytics from Sales Cloud.
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