Alright, you’ve done it. Your marketing strategy? Flawless. Your contact form? Filling up faster than you can make outreach calls. Your sales. . .not quite up to par.
If this situation sounds uncomfortably familiar, you’re not alone. Finding prospects can feel so difficult that many companies throw excess resources toward lead generation, but then stall when it comes to converting those leads into sales.
With so much effort going into gaining initial interest, it’s doubly frustrating when sales leads aren’t immediately ready to buy. This may feel like an issue unique to your company, but only 1 in 25 website visitors are ready to make a purchase. And it’s up to your sales team to take them the rest of the way.
In this article, we’ll help clarify that journey as we reveal our key tips for successful lead conversion.
What is lead conversion?
Lead conversion is the process of turning a lead into a customer. This process includes everything from sales tactics to marketing materials and varies significantly between companies (though many of the principles of the process stay the same across the board).
The process of lead conversion starts where lead generation ends. Once a potential customer visits your website and offers their contact information, they leave the generation stage and enter the conversion stage. There are endless strategies for moving leads through the conversion stage, but most processes include three key transitions:
- General lead → marketing qualified lead (MQL)
- MQL → sales qualified lead (SQL)
- SQL → Paying customer
The first two steps are part of lead scoring. We’ll get into the full process of lead scoring a little later, but in essence, these first two steps are about taking any new lead and making sure they fit the criteria for an MQL and a SQL before being assigned to a sales rep.
The third step encompasses the entire sales process from the first rep outreach to the final transaction.
How to calculate lead conversion rate
Calculating your lead conversion rate (LCR) is straightforward. Take the total number of converted leads (within a given time period), divide it by the total number of leads (within that same time period), and then multiply by 100.
As an equation, your lead conversion rate looks like this:
Let’s look at an example. Say you want to calculate your conversion rate for the month of April. In April, your team spoke with 200 leads and 67 of those leads moved on in the sales pipeline.
Do note that converted can mean several different things when looking at your lead conversion rate. Converted is often assumed to mean a lead who has chosen to make a purchase and become a customer—but that’s not always the case. It can also mean that the lead has simply moved forward in the sales pipeline, whether from MQL to SQL or SQL to prospect. You’ll need to define what conversion means to you before starting your calculations.
It’s also beneficial to run multiple LCRs at once. Your whole team’s lead conversion rate may look great at 34 percent, but if one rep is responsible for 80 percent of those conversions, you still have a problem on your hands. Luckily, the LCR equation is simple enough that running it multiple times through multiple scenarios is still a quick and easy process.
Related conversion metrics that can help you zero in on your trouble spots include:
- Cost per conversion (the amount it costs in pay and resources to convert a lead)
- Conversion ROI (the amount you make from that lead in comparison to your cost per conversion)
- Lead value (the total value of the leads in a given time period, measured in sales amounts)
- Time-to-conversion comparison (the amount of time it takes to convert the average lead for your company)
How to convert leads
The concept and the calculations behind conversion may be simple, but the actual practice of converting is anything but. Right now, 90 percent of buyers in the U.S. find the idea of personalization appealing—even at the cost of personal privacy. In fact, the draw of personalized selling is now so high that 72 percent of customers admit they only engage with personalized messaging.
Right now, 90% of buyers in the U.S. find the idea of personalization appealing.
If you know how many leads your sales team deals with on a daily basis, then you know you can pay personal attention to everyone. It’s not feasible with only 24 hours in a day. The question then becomes, what’s the workaround? How do you convert leads through personalized tactics while still maintaining an efficient workflow?
Here are five ways you can utilize your current resources for maximum lead conversion impact.
Develop a lead scoring process
The first step to converting leads is making sure that your team’s efforts are going toward the most likely conversion candidates. These candidates are determined through a process of lead scoring (or lead qualification).
Lead scoring involves analyzing a lead’s potential value based on a series of predetermined characteristics. This can be done manually, but it’s much faster and more accurate to use lead scoring software.
Different companies use different scoring criteria, but as an example, here are the five questions the Zendesk sales team uses to score leads:
1. Is this lead genuinely interested in the product?
2. Does this lead have a genuine use for the product?
3. Can this lead afford the product?
4. Is this the best time for this lead to buy the product?
5. Is this lead the decision-maker in their company? (relevant for B2B sales)
Ideally, a qualified lead checks all five boxes. If they’re missing one box, they still might be worth pursuing, but if you have enough fully qualified leads, it may not be worth the effort.
The exception is the fourth question. If a lead checks all the boxes except “Is this the best time?” they’re still a qualified lead—for the next sales cycle. Put these leads aside and return them to the sales team when the time is right.
Nurture qualified leads
Most of the time, but especially in B2B sales, it takes more than one conversation to convert a new lead. Lead nurturing is the process of building relationships with leads and continuing to foster those relationships throughout the entire sales process. A huge part of personalized sales is sticking with your leads over an entire journey, not just at the beginning and the end. This lets potential customers know that your company actually cares about them and your sales reps aren’t just trying to meet their quotas.
Lead nurturing is also proven to work. According to a recent study by Marketo, strong lead nurturing campaigns can generate up to 50 percent more SQL conversions at a 33 percent lower cost per lead. Of course, you don’t need to manually manage all these conversations. By using lead management software, you can automate key outreach points with personalized touches to keep your leads coming back for more.
Take advantage of reviews and referrals
The worst crime you can commit in sales is not taking advantage of free publicity. If your clients are posting glowing reviews on social media or review sites, grab them. Nothing convinces new leads to buy like positive customer reviews. Strangers don’t have anything to gain from recommending a product, so their word is more likely to be trusted. The more social proof you can show your potential buyers, the more appealing your company and products will sound.
Additionally, don’t be afraid to reach out to favored clients for referrals. Any lead coming in via a referral is already primed to buy. A difficult sale might feel more validating at the end of the day, but an easy win looks exactly the same on paper when it comes to lead conversion metrics. Don’t look a gift horse in the mouth—just say thank you and celebrate another sale.
Keep your sales content fresh and accurate
You can’t keep your conversion rate consistent without the right prospecting tools and sales/marketing materials. This lift isn’t on the sales reps—it’s your company’s responsibility to provide the best possible sales support materials while maintaining an up-to-date knowledge base. With these fundamentals in place, all employees have access to the same information, which helps with our next point: alignment.
Make sure your marketing and sales departments are aligned when it comes to what leads are seeing before they speak with a rep. If your marketing department updates digital marketing content and doesn’t tell sales, then leads may walk into a conversation with more knowledge than the rep—and that’s never a good situation.
Keeping everyone on the same page when it comes to marketing, sales, and product inventory/ability is vital to entering your conversions with the best possible information.
Map out key follow-up points
We mentioned follow-up points when we talked about lead nurturing, but let’s dive a little deeper. Follow-ups with leads are a proven way to produce a higher conversion rate. That said, too many follow-ups or follow-ups at inopportune times can hurt the conversion process.
Looking at your sales analytics, you can put together a pretty solid picture of when leads should be contacted. Creating a basic timeline map of outreach points not only keeps your reps organized, but also allows for automated campaigns. It’s all about finding the sweet spot between making your leads feel ignored and making them feel spammed.
Outreach maps can take a bit of trial and error to get right, but once you figure them out, they’ll drastically improve lead communication and conversion.
How to improve conversion
Now that we’ve described how to convert leads, let’s look at conversion rate optimization. There are three areas you can address when looking to improve your lead conversion:
- The quality and number of leads
- The conversion resources available to your team
- The conversion strategies used by your team
Below, we’ll go through five ways you can target these areas to boost your conversion rates.
Maximize your lead sources
If you’re having trouble with lead conversion, the first places to look for trouble are your lead sources. Leads come from everywhere under the sun. They can come from traditional sources like cold calls and billboards, or they might come from contemporary digital sources like social media and search engines. Nowadays, most successful companies use a combination of traditional and digital lead sources. Odds are, if you’re struggling with conversion, you’re probably not using as many sources as you could.
Because the digital landscape is evolving so quickly, newer social media platforms are often an overlooked lead source. But leads from social media have a lot of unique benefits. These leads are already somewhat qualified (via targeted advertising), and they’re primed to interact with your company on a more casual, personal level. Expanding your company’s use of social media as a lead source is a great way to increase awareness of your brand while generating leads who are primed for conversion.
Don’t believe us? It turns out social media lead conversion rates are 13 percent higher than the average conversion rate from any other lead source.
Listen to the data
While numbers may feel less personal than a sales rep’s instincts and charisma, using sales data is crucial if your company hopes to stay competitive in the 21st century. And with the right sales analytics software, it’s easy to break down your entire conversion process and history into actionable statistics.
In order to solve a problem, you have to know where and when the problem occurred. Start investigating your conversion process with questions like:
- Is my LCR consistent or has it dipped over the past few months?
- Where in the sales process am I seeing the most churn?
- What lead sources show the most conversion success?
- Which products or product packs are associated with the highest number of conversions?
- How many times are my sales reps following up with individual leads?
When you can examine specific data that impacts your LCR, you can see which metrics need improvement. For example, if your LCR significantly dropped over the past quarter, you’ll want to know as soon as possible so you can determine what changed—and why.
Between October 2020 and October 2021, the price of beef rose 20 percent in the U.S. If your business was selling beef products to distributors, you were probably hit with a few challenges: distributors responded by reducing purchase volume while demand for meat decreased. This is one example of an LCR drop caused by external circumstances. While not ideal, context is important—it means your company wasn’t necessarily doing anything wrong.
Alternatively, if the beef market was booming and you still noticed a drop, you’d know something was wrong with your internal conversion process.
Try different tactics
The buyer market is always changing, so why shouldn’t your conversion tactics? Sales is a continually evolving industry. If your current conversion plans aren’t giving you the results you want, change them. Trying different tactics, even if they don’t succeed, is a great way to find out what your audience wants, what your teams are capable of, and what long-term changes you might want to make to your process.
Your tried-and-true strategies will always be there for you in a pinch. That doesn’t mean you need to rely on them for every conversion. Spend a few months trying out new sales prospecting techniques. You can always keep what works and toss the rest.
Re-delegate your team
Sometimes, improving your LCR is as simple as moving around a few tasks. A common trap for many companies is that sales teams spend so much of their work week generating and qualifying leads that they’re left with very little time to actually speak with prospective customers.
Every company needs a healthy lead funnel in order to generate customers; that’s never going away. However, your team doesn’t need to spread themselves thin to keep the lead flow steady. Instead of leaving every rep to their own devices, try creating a structured team where different members have different, specialized jobs.
If you have a few people on lead generation, a few on qualification, and a few on lead management, you’ll ensure all your bases are covered and no pipeline stage gets neglected.
Invest in lead management software
According to a recent study by Ascend2 and Verse, there are more than 8,000 sales software solutions on the market, but only 25 percent of marketing and sales professionals use automation software designed for lead conversion.
That’s a mountain of untapped potential waiting to be set free.
The good news is, you don’t have to invest in new software just for lead conversion. A good CRM will give you the management platform you need alongside sales prospecting features and lead conversion tools. Time is money, so the more you can rely on your software to automate aspects of your conversion process, the better off you’ll be.
Lead conversion process example
Let’s go back and check in on our hypothetical beef products company, which we’ll call Sam’s Free-Range Farms. Sam’s Free-Range Farms provides organic beef products to local customers and national distributors. The rise in beef prices has impacted the business, but for now, lead conversion remains consistent.
Sam’s Free-Range Farms uses traditional marketing (local advertising, farm stands, billboards) as well as digital marketing (healthy livestock blogs, sponsored ads, and social media accounts). The company’s goal is to bring in approximately 50 SQLs per month, with a conversion rate goal of 40 percent.
The company’s lead sources are all helpful, but the one it’s most interested in is website clicks redirected from the healthy livestock blog. These are leads who read about the values of the company and were interested in learning more—a great place to start.
These leads are researched and qualified within 24 hours; sales reps are then alerted through their CRM when these leads are ready to go. Next, the sales team initiates a customized outreach plan for leads from this particular source. This plan includes cultivated reviews, case studies, and testimonials—they understand these leads are attracted to the company values and want to appeal to the leads’ interest in ethical meat production.
The sales team then sends out an automated message that will set up a meeting if any leads click on a link within the initial outreach email. Following that, the sales reps start a conversation and follow a series of timed outreach steps to guide the leads toward the purchasing finish line. Because of the specificity of these leads, they might even seal the deal with a discount to a distributor who solely focuses on organic, sustainable products.
Other lead sources might work differently, but this is one example of a well-planned conversion path.
Improve your lead conversion with Zendesk
Conversion is never going to be a simple, clean-cut process, but you can make it easier with the organization and automation of a lead-focused CRM. Zendesk Sell is a unique, all-encompassing CRM with numerous lead-focused features including:
- Pipeline tracking and visibility
- Lead scoring
- Lead management
- Automated messaging
- Complex customer profiles
- Cross-departmental alignment
No matter what lead conversion strategy you’re using this week, your team needs to feel supported by their sales software. Request a demo of Zendesk Sell today and start increasing your LCR tomorrow.