When it comes to numbers and metrics, there are few as important as the sales conversion rate. Businesses of all shapes and sizes survive or fail based on this rate alone, leaving you feeling anxious and worried about whether you’ve done enough planning to ensure a good rate.
For most companies, all that’s needed is a simple explanation of a good sales conversion rate and how to improve it. In this blog, we’ll clear up the confusion and guide you through the process.
What is a sales conversion rate?
A sales conversion rate refers to the assessment of your sales team's efficiency in converting new leads to customers. It is a vital metric to align your marketing and sales team, as both teams use it to determine the quality of leads.
Understanding and optimising your conversion rate is essential for company growth. It guides marketers to improve their website performance and attract more sales while showing sales how to maximise the value of leads. This is where conversion rate optimisation comes in. It ensures that there is a structured approach to improving the value of sales and customers.
However, it all starts with finding how you’re currently performing.
How to calculate your current sales conversion rate
Calculating your sales conversion rate is easy. All you have to do is divide the number of sales on your online platform by the total leads you accumulated. Then, if you want to get a percentage, multiply that number by 100.
Check out the formulas below to represent this:
Sales conversion rate = (Number of sales / Number of leads) x 100
In most marketing or sales funnels, conversion rates get tracked by measuring qualified leads compared to new wins. A lead becomes qualified when it completes the specific customer journey you have prepared. Ideally, a conversion should happen at the end of each journey, turning that lead into a sale.
This kind of sales conversion rate formula looks like the following:
Sales conversion rate = (Number of conversions / Number of qualified leads) x 100.
For example, if you had 30 sales with 100 leads, your calculation will look like this:
Sales conversion rate = (30/100) x 100 = 30%
As such, you can see that your sales conversion rate is 30%.
What is a good sales conversion rate?
Sales conversion rates vary depending on your industry, website traffic, business, and products. The ultimate goal of every marketing campaign is to attract customers and induce sales with it. As such, sales conversion rates metrics are critical to assessing your marketing campaigns' return on investment (ROI).
Additionally, it is essential to consider the channel you’re using. Conversion rates vary depending on the medium and the channel. Some channels naturally have access to a wider range of leads, while others are highly targetted. The more potential leads you have access to, the more likely your conversion rate will be lower.
As such, here are some average conversion rates for different channels:
- Organic Advertising: 16%
- Amazon: 10-15%
- Amazon Advertising: 9.47%
- Google Ads: 3.75%
- Microsoft Advertising: 2.94%
- Paid Advertising: 2.5%
- Social Media: 0.71%
In terms of industry, here are a few average conversion rates:
- Ecommerce 1.84%
- Legal 2.07%
- B2B 2.23%
- Finance 5.01%
Overall, the average conversion rate is usually between 1% and 3% for digital marketing efforts. However, there are ways you can optimise it, which we’ll discuss below.
Improving your conversion rate
There are three main strategies you can use to improve your overall conversion rate:
Experiment with different CTA offers
Your call to action plays a tremendous role in whether or not a user converts. This is why it might be a good idea to play around and experiment with different ways to present them. While you don't necessarily need a whole new offer, you might want to reconsider how you communicate with prospective leads and the platforms you use.
Experiment with different creative elements, use interactive buttons, images and engaging copy to try and grab attention. Above all, always ensure you provide ample opportunities for your leads to convert and directly encourage leads to take the action you want.
While brainstorming all of this requires time and dedication, your work can lead to massive gains in your sales conversion rate. These gains translate to more leads, sales and revenue for your business.
Improve customer support
Typically, websites with high conversion rates have excellent customer support services. While offline support doesn’t always have an impact on conversion, online support can be very effective.
Ensure an FAQ on pages where necessary, and simplify your website copy so that users are not left confused. Also, consider creating a knowledge base with answers and guides to help users find what they need on their own.
If all else fails, always have a customer service representative on hand to assist. You’ll be surprised at how many leads want to become customers, but don’t know how.
Make testing a habit
Businesses often create Conversion Rate Optimisation (CRO) plans and fail to follow through. Lack of time, limited resources, and unfinished projects are all often part of the reasons why this happens - and it means CRO plans come to a halt.
If you want to see a good conversion rate, you need to intentionally set time aside for CRO. See what works and try different approaches as part of your daily business schedule. Use reporting applications and metrics to identify what you’re doing right and what could be improved.
However, if you don’t have time for this, consider partnering with an expert to help guide your CRO strategy.
Optimising for excellence with Demodia
Finding the right agency partner to help boost your conversion rate is the first step towards having an exemplary digital sales and marketing programme. It saves you time, money, and frustration while letting you find success without the need for in-house skills and know-how. We understand how important an integrated sales and marketing campaign is today, and how limited budgets can hinder this. As a small company ourselves, we’ve gone through this process, but found a way to succeed. That’s why we've spent the last 12 years planning and implementing award-winning integrated campaigns for B2B clients worldwide.
Contact us for a quick 30-minute meeting and we will present you with an integrated marketing campaign plan with the right messages, channels, audience, and content to use, to make success an assurance.
