Ten Lead Conversion Metrics You Can Track for a Business
By Indeed Editorial Team
Published April 25, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Tracking conversions from leads often enables companies to optimize their revenues efficiently. As a result, they can also objectively measure the success of their sales and marketing teams to generate leads and convert them into customers. Understanding essential metrics in converting leads can help you learn how to influence customers' purchasing decisions. In this article, we explain lead conversion, list ten metrics that a business can track, explore strategies that convert more leads, and provide tips to increase them.
What is lead conversion?
Lead conversion is the process of turning leads into customers through strategies like re-targeting, discovery calls, and email nurturing. This process often occurs when an employee on the sales or marketing team converts an existing lead into a contact, opportunity, or account. Conversion of leads is when a company's visitor usually performs an action that turns prospects into leads. Most businesses convert leads to get new customers. For instance, customers may receive follow-up emails when they purchase a product, deepening the relationship between the company and the buyer.
It's essential that a company creates leads to increase its revenue. Converting leads involves:
Nurturing visitors to become leads
Using structured queried language (SQLs) to convert customers
Monitoring leads as they become market qualified leads (MQLs)
Metrics for conversion of leads
Conversion metrics can help a company evaluate the success of its marketing efforts. The following are conversion metrics that a brand can track to increase its revenue and measure its marketing performance:
Opportunity win rates by lead owner
This metric examines win rates by the lead owner, which commonly refers to the employee that converts high-quality leads. A company can use win rates to determine how its leads are converting into customers. Most businesses have a sales team that performs the prospecting tasks and outreach to make qualification calls to leads.
A company can quickly assess each team member's performance in converting leads to revenue. Win rates by lead owners typically enable employers to identify employees who drive a high revenue level. It also helps them determine which employees may require additional help or training.
Related: A Guide to Marketing as a Career
Opportunity win rates by lead source
Lead sources usually vary depending on the type of business. Opportunity win rates by lead source refer to the standard field that records a lead's originating channel or source. This can be a good insight for businesses looking to optimize their outputs. Lead sources are bridges that can lead customers to a company's website or store to complete their sales. Examples of lead sources include social media, store visits, phone inquiries, and search engine results.
This metric can also enable companies to monitor employees' efforts in generating leads from various sources. By tracking each lead source's win rates, a business can determine the steps to improve its leads.
Converted leads by campaign
Businesses usually attach labels and tags to track their progress when launching campaigns. Converted leads by campaign is a metric that often enables companies to determine which ads are valuable. This metric can also help organizations identify campaigns that bring high-value leads to their business. By reviewing advertisements, a company can quickly ascertain which ads perform effectively.
Cost per lead (CPL)
This is the amount of investment a business requires for generating a new lead. It can be a valuable metric to track because it often helps companies measure the success of their marketing budget. Companies can discover the channels that bring them the most leads and reduce investments in less profitable channels. Using this metric, businesses can find the channels that get them the most leads and reduce investments in less profitable channels. Here's how to calculate cost per lead:
CPL = total marketing cost / the number of leads generated
Example: If a company spends $500 on an ad campaign that results in 50 leads, they can use the following formula to determine the campaign's CPL:
Total marketing cost: $500
Number of leads generated: 50
Formula: $10 = $500 / 50
Cost per acquisition (CPA)
This is the price a company pays to gain a new client. With CPA, a company can directly measure the impact of marketing on its revenue. If a business uses CPA for search engine ads, it may be higher than their cost per click. When a company tracks its CPA holistically, it can likely get a return on its investment. Many businesses also use CPA as a determining factor for their campaign direction. Follow this formula to calculate cost per acquisition:
CPA = total marketing cost (MCC) / total customers acquired (CA)
Revenue contribution of converted leads
Revenue is crucial for the growth of any business. This metric shows a brand's most expensive leads and typically measures the monetary contribution of converted leads. Most start-up companies contribute highly to converted leads, while established companies with many customers experience low contributions. This can occur because companies often get their revenue from repeat business. Using this metric, an organization can track the business' sales growth.
Conversion rate lead
The conversion rate lead can measure the effectiveness of a company's ability to convert its website visitors into leads. Monitoring the percentage of leads that convert into opportunities can be vital when identifying high-quality leads. To know a company's conversion lead rate, it's essential you calculate its ratio of leads and number of visitors within a period. You can follow this formula to calculate conversion rate lead:
Conversion rate lead = (number of leads / total number of visitors) x 100
Example: An organization generates 150 visitors to its landing page, and of those 150 visitors, 20 fill the lead capture form and become a lead. The Chief Operating Officer uses the following formula to calculate the lead conversion rate of the company:
Number of leads: 20
Total number of visitors: 150
Formula: 13.3% = (20 / 150)
Win rate by opportunity owner
This metric enables companies to compare several salespeople's win rates. It often measures how many opportunities a salesperson has won and divides it by the total number of opportunities that the company created. For example, if a company creates ten opportunities in January and a salesperson wins five deals, then the win rate by the opportunity owner is 50%.
Time to conversion
Time to conversion can let a company know how long it takes a visitor to become a lead. One essential way a business can fasten its time to conversion is by aligning its marketing and sales team. These teams work together to achieve a goal can easily optimize their resources to drive and convert new leads effectively. To calculate this metric, you can use the following formula:
Time to conversion = total time all visitors spend / total number of leads
Conversion return on investment (ROI)
This helps organizations track the return on investment per conversion. It also usually enables companies to evaluate their campaign cost-effectiveness. Here's how you can calculate conversion return on investment:
Conversion ROI = (lead value - cost) / cost
Lead conversion strategies
The following are strategies that can help a business reach its revenue goals through lead conversion:
Using email marketing
Most businesses consider email marketing as their primary customer retention channel. Through this strategy, a company can nurture leads and boost conversions. It's essential that an organization segments its mailing list to personalize lead nurturing. They can also provide each lead with customized content by making offers based on their client's gender or age.
Related: Top Product Management Skills
Businesses with a chatbot typically experience a high return on investment because the bots often make it easy to understand their audience's needs and identify solutions. It's important that a chatbot style reflects the company's tone of voice. A company can implement chatbot marketing on its social media pages.
Using landing pages
Landing pages are usually good in driving a better conversion of leads because they address specific audiences. Getting conversion via landing pages is often helpful if a company defines its audience by highlighting their needs and showing how its product provides solutions. For example, by including a subscription form on its landing page, a company can quickly generate leads and convert them into customers.
Starting content marketing
This strategy involves creating content to educate the company's leads about its products and services. By using content marketing, a company can easily engage its customers and help them make a purchasing decision. For example, a brand can write a blog post, e-book, or webinar on how to solve its customer's problems.
Tips to increase the conversion of lead rate
Some best practices for increasing the conversion rate for a company include:
Work with quality leads: It's often essential that a business qualifies leads before turning them into customers. They can achieve this by learning their lead's occupation, geographic location, marital status, and interests.
Make personalized offers: An organization can customize offers by tracking its lead's behaviour on its website because customers are more likely to patronize brands that provide relevant recommendations and offers.
Use call to action (CTA): Brands with clear content and one call to action button often have a higher conversion rate. A clear CTA may encourage leads to stay on a company's landing page.
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