Skip to content
Home » Startup Sales » How to Calculate Lead Conversion

How to Calculate Lead Conversion

Lead Conversion Rate Etched on Glass Wall

Calculating Lead Conversion 

Lead conversion rate is a critical metric for any business that relies on lead generation to drive revenue. This metric measures the percentage of leads that convert into paying customers. By tracking lead conversion rates, businesses can identify areas for improvement in their sales and marketing efforts and adjust their strategies accordingly.

What is Lead Conversion Rate?

Lead conversion rate is the percentage of leads that ultimately become paying customers. This metric is calculated by dividing the number of leads that convert into customers by the total number of leads generated. For example, if a business generates 100 leads and 20 of those leads become paying customers, the lead conversion rate would be 20%.

It’s important to note that lead conversion rate is different from sales conversion rate. While lead conversion rate measures the percentage of leads that become paying customers, sales conversion rate measures the percentage of opportunities that lead to a sale.

Why is Lead Conversion Rate Important?

Lead conversion rate is an important metric for a number of reasons:

  • It helps businesses measure the effectiveness of their lead generation efforts.
  • It provides insight into the quality of leads generated.
  • It helps businesses identify areas for improvement in their sales and marketing strategies.
  • It helps businesses forecast revenue and set goals.

How to Calculate Lead Conversion Rate

Calculating lead conversion rate is a straightforward process. Here’s how to do it:

  1. Determine the time period you want to measure (e.g. a month).
  2. Count the number of leads generated during that time period.
  3. Count the number of leads that became paying customers during that time period.
  4. Divide the number of leads that became paying customers by the total number of leads generated during that time period.
  5. Multiply the result by 100 to get the lead conversion rate as a percentage.

Here’s an example:

During the month of June, a business generated 200 leads. Of those 200 leads, 40 became paying customers. To calculate the lead conversion rate, divide 40 by 200, which equals 0.2. Multiply 0.2 by 100 to get the lead conversion rate as a percentage, which is 20%.

Improving Lead Conversion Rate

If your lead conversion rate is lower than you’d like it to be, there are a number of strategies you can use to improve it:

  • Improve lead quality: Make sure the leads you’re generating are high-quality and relevant to your business.
  • Streamline the sales process: Make it easy for leads to become customers by simplifying the sales process.
  • Create targeted content: Develop content that speaks directly to your target audience and addresses their pain points.
  • Use retargeting: Retargeting allows you to target leads who have already shown interest in your business, increasing the likelihood that they’ll convert.
  • Optimize your website: Make sure your website is easy to navigate and provides a seamless user experience.

The Bottom Line

Calculating lead conversion rate is a critical step in measuring the effectiveness of your lead generation efforts. By tracking this metric, you can identify areas for improvement and adjust your sales and marketing strategies accordingly. By implementing the strategies outlined above, you can improve your lead conversion rate and drive more revenue for your business.

Check out our own SDR services