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Every business owner is in business to impact lives while making profit. To make a profit, you have to convert your leads into sales. And that takes setting up the right marketing strategy.
If your marketing is right, then you should record a high lead conversion rate. A low lead conversion rate pretty much means something is wrong somewhere. It’s your job to figure that out and correct such anomalies.
The problem is, most business owners don’t know their lead conversion rate. If the lead conversion rate is not known, it would be difficult to ascertain if you’re generating enough conversions during your campaign.
As a business person or marketer, you need to have a good grasp of lead conversion rates. Aside from that, you should know how to calculate it. A good knowledge of lead conversion rate will help you come up with ways of boosting your conversion rate.
When your target audience comes to your website, some will be captured as leads. The percentage that is captured as leads is termed the lead conversion rate. And it’s one of the most vital metrics to measure as a marketer.
To a large extent, the lead conversion rate shows you the pace at which you’re attracting the right audience. Furthermore, it also shows you the pace at which you’re converting your audience into leads.
Your lead conversion rate helps you know how much you spend during lead acquisition. In other words, it helps you know how much you can spend for the acquisition of new leads. Let’s say you’ve got a lead conversion rate of 15% for a low-priced product (of $20/month), then you’ve got to plan your marketing budget accordingly.
A good grasp of your lead conversion rate helps you create a more feasible financial model. To build a financial model, you have to foresee the potential for customer growth in your business.
To come up with a financial model, you need to have an estimate of the number of leads you’d generate in a month. Aside from that, you also need to know the percentage of the lead that would be converted into customers.
The lead conversion rate is calculated by dividing the number of customers by the number of leads generated.
Lead conversion rate formula = Number of new customers / total number of leads received.
Let’s say you generate 150 leads and convert 15 of these leads. Your lead conversion rate will be 10%. Therefore, it’s safe to say that you’d convert 10% of your leads in the future.
There is no fixed way to determine how good your lead conversion rate will be. The quality of your lead conversion rate will be dependent on your industry. Typically, the average conversion rate of landing pages across all industries is 2.35%. And most of the top 25% convert at 5.31% or higher.
As a business owner, you have to aim to be among the top 10%. And that means recording a landing page conversion rate of 11.45% or above.
When looking at your conversion rate, figures between 2% and 5% are pretty much average. But a conversion rate of 6% to 9% is seen as above average. All in all, anything above 10% is good.
The lead conversion rate is calculated by dividing the total number of new paying customers by the number of leads (paying customers and nonpaying customers). The result is multiplied by 100.
For instance, if you generate 100 leads, and 45 of these are converted to paying customers. Your lead conversion rate will be:
45 / 100 = 0.45
0.45 x 100 = 45%.
Your lead conversion rate is 45%.
Let’s say you generate 25,000 visitors to your website each month. But 1,000 of these are converted to paying customers, the lead conversion rate will be:
1,000 / 25,000 = 0.04
0.04 x 100 = 4%.
Lead conversion rate helps you measure your campaign performance. You have to always compare your campaign performance with that of others in your industry. And that’s why you need to pay attention to metrics like:
It measures the percentage of leads that are converted into qualified leads. The calculation of the lead conversion rate is simple. All you need to do is divide the number of leads by the number of visitors. The result is multiplied by 100.
For instance, if 20 of the 500 visitors to your website fill out your lead capture form, the lead conversion rate will be 4%. These 20 leads are considered “qualified leads” because they meet the company’s criteria for potential customers.
It measures your level of effectiveness in converting leads into paying customers. The metrics help in determining the number of leads that end as sales and revenue.
It’s gotten when the number of converted leads is divided by the total number of leads. Here, the number of converted leads is the number of people who buy the product or service.
Let’s say 5 of 20 people bought your product from the previous example. The lead-to-sale conversion rate will be 25%.
The metrics show you the percentage of your leads that get converted into opportunities. It’s a sure way to build a robust pipeline. It’s not the same as the lead-to-sale conversion rate.
The lead-to-opportunity conversion rate measures how successful you are in getting your leads to a certain point. Opportunity, as used here, varies – and it’s largely dependent on how you define it.
However, the formula for calculating the lead-to-opportunity conversion rate is somewhat straightforward. The leads converted into opportunities are divided by the total number of leads. The result is multiplied by 100.
The lead-to-opportunity conversion rate varies from one industry to the next. However, you should aim for around 12%. But the figure can be improved. You have to keep looking out for ways of optimizing your campaign to get the most opportunities.
Your total marketing and advertising cost are divided by the number of conversions. The result gives you the cost per conversion. The metrics show you how much you spend to generate conversions. Various factors affect the cost per conversion. But if you’re spending so much while generating few conversions, then you need to revisit your strategy.
Lead value is obtained by dividing the total sales value by the total number of leads. The result shows you the value of leads that contributed to your business’s success. In the long run, you get to figure out how to generate more leads for your business.
Lead values help you to forecast sales. Marketers also get to use the figure to justify the amount spent on acquiring new customers. Lead value shows you the lifetime value of each converted lead.
Conversion ROI is obtained by subtracting your cost from your lead value. The result is divided by the cost – and that’s your percentage value. You get to gauge your overall effectiveness from the percentage value.
The basis of the conversion ROI is the assumption that your sales growth is linked to your marketing campaign. Your sales activity is not taken into consideration. And most times, the sales activity affects your conversion.
It measures how long it takes a visitor to be converted into a lead. You calculate it by dividing the total time spent by the number of web visitors. The result is divided by the total number of leads. It helps you determine if there are other entry points in your website to optimize.
There are chances that a long time to conversion means that your visitors are taking time to consume your content. If your visitors are consuming your content, then you must be doing something right.
As a business person, you have to place some priority on your leads. Your leads should always come first. People won’t just navigate to your website, and fill out your lead capture form. If you want to generate more leads and sales, you have to be deliberate about it.
You should be sure that your potential customers have a good grasp of your offerings. To improve your lead conversion rate, you have to consider the following steps below:
You’ve probably heard about the marketing rule of seven. That’s the number of times customers get to hear or see your offering before making a buying decision. As a business person, you have to come up with a strategy to help you keep connecting with your customers.
To nurture your leads, you have to consider using promotional content, and demo videos. There is also room to incorporate other marketing materials into the mix.
Your sales and marketing teams should be in sync. After a lead fills out the lead capture form, the sales team should be ready to follow up on the lead. And that can be done via automated email marketing or with a phone call. You could also send out some personalized emails urging the lead to try out a demo.
You have to publish lots of engaging content on your website. If your website is somewhat scanty, then you’d probably record low conversions. To convert your visitors into customers, there has to be lots of content for them to consume.
To get the most out of your content, it has to be compelling and engaging. Moving on, you should consider inserting some calls to action (CTAs) in your content.
If you’re generating leads with Google Ads, you have to keep a close eye on your campaign. And that’s somewhat difficult if you’re managing multiple campaigns from a single account. To get the most out of your campaign, you need to consider PPC Signal.
The PPC Signal shows you any anomaly with your campaign. This way, you get to quickly correct such an anomaly.
Let’s say you want to optimize the cost per conversion of your online campaign. You can do that with the PPC Signal. To get started, navigate to the PPC Signal dashboard and click on the cost per conversion metrics. An automated signal will be generated in the middle of your screen.
The PPC Signal uses real-time data to generate the signal of your campaign. From the signals, you get to know insights about your campaign. You also get to know about the trends, anomalies, outliers, and shifts in your data. To explore the signals, you have to click on the Explore button.
After clicking on the Explore button, a graphical representation of your campaign will be displayed on the screen. From the data, you get to see how your cost per conversion is performing.
When you compare with conversions, you will realize your conversions are actually decreasing which is leaving impact in high cost per conversion.
There is also the option of representing your data in a tabular format. This format helps you compare other metrics that are affecting the cost per conversion.
From the generated signal report, you get to make a decision that will help boost your campaign performance. The PPC Signal uses machine learning and artificial intelligence to boost your ROI. You get to generate the most result in less time.
About 10% to 15% of leads get converted into sales. But that doesn’t dispute the possibility of converting all potential leads into sales.
Ideally, you have to aim for an 11.45% or higher lead conversion rate. Breaking into that means you’re among the top 10%. But that’s not always the case with most landing pages. Anything between 2% to 5% is seen as average. Anything around 6% to 9% is seen as above average. And anything above 10% is good.
This is the percentage of visitors that are captured as leads on your website. It shows your ability to attract the right audience to your business. And also convert them into leads.
Lead generation involves converting potential customers into leads. And that can be accomplished by persuading potential customers to give out their email addresses. Lead conversion involves getting potential customers to take your desired action. And that could be buying your product, subscribing to your email list, or clicking on your ad.
A healthy pipeline of leads is not enough. You need to figure out ways of converting your leads into loyal paying customers. And that’s why you need to create a robust marketing strategy. Aside from having a good marketing strategy, you need to know how to calculate your lead conversion rate.
The lead conversion rate measures how well you convert your visitors into leads. But to attract lots of visitors, you have to consider PPC advertising.
Managing multiple campaigns from a single account is not easy. And that’s why you need the PPC Signal. The PPC Signal helps you identify any anomaly. This way, you get to quickly fix it and keep optimizing your campaign for improved performance.
Now you know what a lead conversion rate is, what was the conversion rate of your most recent campaign?
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