Ever wondered why some sales teams are more successful than others? It could be that those teams know what it takes to increase their lead-to-opportunity conversion rate. The lead-to-opportunity conversion rate is an important metric for any sales team or process, as it measures how effectively leads are being converted into opportunities — and ultimately, deals. By properly optimizing this essential metric, any team can achieve remarkable results!
In this blog post, we'll take a closer look at the lead-to-opportunity conversion rate, what factors influence it, and how to optimize various prospect touchpoints for stronger results.
What Is the Lead-to-Opportunity Conversion Rate?
The lead-to-opportunity conversion rate is the percentage of leads received that are converted into opportunities. The rate can be calculated by dividing the number of leads that have been converted into opportunities by the total number of leads received and expressing the result as a percentage.
For example, if your team has received 500 leads and successfully converted 100 of them into opportunities, then your lead-to-opportunity conversion rate would be 20%. This means that for every five leads your team receives, one will become an opportunity.
What is a Good Lead-to-Opportunity Conversion Rate?
Determining a "good" lead-to-opportunity conversion rate is highly dependent on the specific industry, product, or service being sold, and other unique factors. As a result, it can be challenging to establish a benchmark for what constitutes a good conversion rate.
That being said, some general guidelines can be helpful in determining if a team's conversion rate is strong. For example, a conversion rate of 10-15% is generally considered to be good for B2B companies, while a rate of 20-30% is often considered to be excellent. These are rough estimates that vastly depend on the unique factors listed below.
10 Factors That Influence Lead-to-Opportunity Conversion Rates
Lead-to-opportunity conversion rates can vary widely depending on a number of factors. These include the quality of the leads, which reflects their relevance to your organization’s product or service offerings; the effectiveness of your sales process in converting those leads; and finally, the overall demand for whatever it is you’re selling. Here's the full list:
Quality of leads: The quality of leads is a key factor in determining the lead-to-opportunity conversion rate. High-quality leads are more likely to convert into opportunities, while low-quality leads are less likely to do so. Using tools like HubSpot's lead scoring feature can help sales teams identify the most promising leads and focus their efforts accordingly.
Demand for the product or service: The overall demand for the product or service being sold can also impact lead-to-opportunity conversion rates. If there is high demand, sales teams may be able to convert more leads into opportunities, while low demand may lead to lower conversion rates.
Competition: The level of competition in the market can also affect lead-to-opportunity conversion rates. If there are many competitors offering similar products or services, it may be more difficult to convert leads.
Sales process: The effectiveness of the sales process is also a significant factor in lead-to-opportunity conversion rates. A well-defined and efficient process can help sales teams effectively identify and pursue opportunities. Using a lead routing app like Distributely can automate lead management and manual sales tasks, freeing up time and resources to focus on high-value activities.
Sales team skills and training: The skills and training of the sales team can also influence lead-to-opportunity conversion rates. Teams that are well-trained and effective at building relationships and communicating the value of the product or service are more likely to convert leads into opportunities.
Marketing and sales alignment: The alignment between marketing and sales efforts is another important factor in lead-to-opportunity conversion rates. When marketing and sales teams are closely aligned and working together, leads are more likely to be passed along effectively and converted into opportunities.
Customer experience: The overall customer experience can also impact lead-to-opportunity conversion rates. Customers who have a positive experience with the sales team and product or service are more likely to convert into opportunities.
Website conversion rate optimization: The effectiveness of the website in converting visitors into leads can also impact lead-to-opportunity conversion rates. By optimizing the website for conversion, sales teams can generate more qualified leads.
Access to content: Providing access to valuable content, such as white papers and case studies, can help sales teams build credibility and trust with potential customers. By ungating this content and making it easily accessible, teams can increase the likelihood that leads will convert into opportunities.
Ease of booking a meeting with SDR: The ease with which potential customers can book a meeting with a sales development representative (SDR) can also influence lead-to-opportunity conversion rates. If it is easy for customers to schedule a meeting, they may be more likely to do so, resulting in higher conversion rates.
By understanding these factors and tracking your team’s lead-to-opportunity conversion rate over time, you can identify areas in need of improvement and make adjustments accordingly.
A lead-to-opportunity conversion rate is an important tool for any sales leader or CSO looking to maximize their team's success. By understanding what influences this metric — from quality lead sources to effective sales processes - you can identify areas for improvement and optimize your sales efforts accordingly.
With careful monitoring and analysis of this metric over time, you'll be able to get a clearer picture not only of how well your team is performing but also of where they can improve further down the line. Analyzing this key performance indicator (KPI) regularly will help ensure that your team continues delivering high-value results in an increasingly competitive marketplace.
Karly is a Lead Growth Advisor at New Breed