Your company has worked hard to build a stable base of customers, but what do you do when those customers inevitably drop off the sales funnel? You need more customers to replace the lost ones, which means utilizing an efficient lead conversion system.
Being able to convert leads into customers is the backbone of any self-sufficient business both big and small. There are many elements necessary for conversion, such as understanding your leads, ascertaining that they’re a good fit for your company, and nurturing relationships with them in the hopes they’ll convert.
In today’s post, we’ll share our best lead conversion optimization strategies so your business can create an operational sales conversion strategy. From how to calculate your conversion rate to methods for boosting it as well as the steps that comprise a lead conversion process, you’ll learn lots of great info ahead.
Let’s get started.
What Is Lead Conversion?
Before we get underway, we should begin with a lead conversion definition. A lead is a person who has a marginal interest in your company and its products and services but has yet to make a purchase. When you convert a lead, it mostly simply means you convince them to buy your products or services. The lead likely also will sign up to your email newsletter in the process. By the end of conversion, the lead is considered a customer.
Image courtesy of Gary Smith Partnership
Not all leads are the same. Some will stumble upon your company blindly, perhaps from an advertisement they saw online or through a recommendation from a friend or colleague. These leads know little to nothing about your company, so their rate of interest is low. They may or may not convert.
Qualified leads, also known as prospects, are those that did a little more digging into your business. They’re still new to you in that you have never sold to them before, but they know through their own research what your company does and what it sells. Since they did their homework, they’re more likely to buy from you sooner than later. These qualified leads also have a better chance of converting into customers.
You can separate qualified leads into two categories: market-qualified leads (MQLs) or sales-qualified leads (SQLs). An MQL’s lead conversion candidacy is determined by which materials of yours they’ve downloaded and which pages on your site they’ve clicked on. MQLs are often managed by your company’s marketing department while SQLs are determined by your sales team, hence the name.
How to Calculate the Lead Conversion Rate
As we discussed in the last section, non-qualified leads may or may not convert into customers. Whether this happens can come down to what your company and its staff do. For example, by capturing the lead’s contact information and then developing a rapport through emails or even phone calls, you can bolster the conversion process.
Yet by waiting too long to do these things, the lead could lose interest and drop out before they ever even get on your lead conversion funnel.
Sometimes, whether a lead converts has nothing to do with your company’s efforts or lack thereof. Since they’re not a qualified lead, remember that this person knows little about your company. Once they learn more, they may find your products or services are too expensive or just not what they need at current.
To determine how many leads your company is successfully converting, you must know your lead conversion rate.
The average lead conversion rate is different from one industry to another. According to a report from Marketing Insider Group, here’s the breakdown of conversion rates by industry:
- Financial and professional services – 10 percent conversion rate
- Publishing and media – 10 percent conversion rate
- Healthcare – 8 percent conversion rate
- Education – 8 percent conversion rate
- SaaS and software – 7 percent conversion rate
- Hardware and technology equipment – 5 percent conversion rate
- Packaged goods and manufacturing – 4 percent conversion rate
- Hospitality and travel – 4 percent conversion rate
- Commerce and retail – 3 percent conversion rate
- Nonprofits – 2 percent conversion rate
- Other – 8 percent conversion rate
Once you determine which industry of the above best fits your company, you have an idea of what your average rate of conversions will be. Of course, you don’t just want to predict or assume this information.
Instead, you should calculate your company’s lead conversion rate. How do you go about doing that?
First, you must tally up your converted leads, but not all. You only want the ones who have recently converted to a campaign or opportunity. Then, take the converted leads and divide them by all the leads you reached out to for that campaign or opportunity.
Let’s say your company recently rolled out a new product, a vacuum cleaner. To broaden your audience of who might buy the vacuum, you started a new marketing campaign. Throughout that campaign, you captured the contact information of 500 leads. Of those, only 120 bought the vacuum and converted.
So, with this example, you’d take 500 leads and divide it by 120 converted leads. That gives you a conversion rate of 4.17 percent, which is low for some industries.
If you’re not quite pleased with your conversion rate, you might more closely study several metrics that can influence how many leads convert. Here are those metrics.
Opportunity Win Rates by Campaign
If your company runs several campaigns at once, which is the most profitable in terms of win rates and conversions? The opportunity win rates by campaign KPI can tell you. You can create a chart that denotes both the number of leads won in a percentage as well as the amount of money won.
Image courtesy of Gary Smith Partnership
Opportunity Win Rates by Lead Source
In the same vein is the opportunity win rates by lead source metric. Your lead source is the channel the lead used to find you, such as through the phone, trade show, social media, or your website.
When you track this metric, you’re measuring which lead source is the most profitable in terms of conversions.
Opportunity Win Rates by Lead Owner
This next KPI may sound a little complicated, but it’s not. The lead owner is simply the person who’s in charge of this particular lead conversion. That’s often someone on your company’s sales or marketing teams.
With the opportunity win rates by lead owner metric, you go individually by the lead owner to see who converts the most leads.
Win Rates by Opportunity Owner
The opportunity owner in this metric is the one creating lead conversion opportunities. Conversion opportunities may be successful, but not always, so it’s important to track each marketer or sales team member’s rate of conversion to paint the full picture of how well they’re doing.
Average Opportunity Size from Converted Leads
Also known as the average size of won deals, the average opportunity size from converted leads metric compares account deal size with converted lead deal size.
Image courtesy of Gary Smith Partnership
How to Increase Your B2B Lead Conversion Rate
According to a 2013 infographic from Salesforce, the average B2B lead conversion rate is around 13 percent for lead to opportunity and 6 percent for the opportunity to deal. What does this mean? That 6 percent of your lead conversion opportunities are those that become actually profitable deals. Salesforce notes it takes about 18 days for this conversion to happen when it does.
Lead to opportunity refers to the time it takes for the lead to convert to opportunities, which is roughly 84 days. Yes, you read that right, 84 days.
Image courtesy of FunnelEnvy
As a B2B business, rather than selling to customers like the vacuum cleaner example above, you’re selling to other industries. Since you’re a company appealing to another company, you’re not working with one individual, but rather, several major parties within the company. This can make B2B conversions much more high-stakes, as you must have several people all in agreement rather than only one person like with B2C sales.
Thus, the lengthier conversion times associated with B2B businesses are not abnormal, as it can take a while for all relevant parties to gather and finalize a business decision.
How do you convince key stakeholders in a company that your industry is worth buying from? Here are some lead conversion strategies to implement.
Enmesh Your Sales and Marketing Teams
The first lead conversion method you want to do is ensure your marketing and sales teams are working in conjunction with one another. You wouldn’t want your marketers to focus their attention on one B2B lead and three employees within the target company only to find out your sales team is courting three different employees.
This makes your company look bad, as you appear uncoordinated. This could hurt your conversion chances. At every point of intersection, your sales and marketers must have clear communication with one another about who’s doing what and attempting to convert whom.
Don’t Discard Lead Nurturing
Engaging with and nurturing a lead is standard fare in the B2C world. You want this would-be customer to feel comfortable with your company. You seek to educate them about your products and services to guide them towards a purchasing decision.
In B2B business, there’s no need to stop with the engagement and nurturing. Considering it can take 84 days for a lead to opportunity conversion, which is about three months, you can’t refrain from building a professional relationship for that long. Take this time to establish your expertise and trustworthiness with your B2B lead.
According to a Forrester Wave report, when businesses focus on nurturing their leads, they tend to increase their count of sales-ready leads to about 50 percent. Even better is they save about 33 percent of their money in doing this.
You can also guide the B2B business’ decision in a non-forceful way through lead nurturing. Data from Gleanster found that those leads that aren’t quite yet ready to buy can be converted at a rate of 15 to 20 percent through nurturing.
Be Picker about Leads
Lead qualification also shouldn’t be left solely to B2C industries. When trying to convert B2B leads, you can follow the CHAMP framework. This acronym is challenge, authority, money, and prioritization.
Image courtesy of Survicate
Some businesses also follow the BANT model. This stands for budget, authority, need, and timing.
Image courtesy of FunnelEnvy
The budget part of BANT determines whether your B2B lead is even in a position to spend on your products or services. The authority part is about going straight to the big decision-makers so as not to stretch out the conversion process any longer.
The N in BANT, or need, gauges whether the lead company has pain points or a need for your company’s products or services. Finally, the T or timing is about getting a solution to the B2B company in a predetermined timeframe.
Whichever method suits your company best for qualifying your leads, you want to work with only those that are the most willing to buy from you.
Building a Lead Conversion Process: Here’s What to Do
Now it’s time for your company to formulate your lead conversion system. That all starts with a working lead conversion process. The following tactics will allow you to get your process underway so you can start bringing in more leads (including qualified leads), scoring or filtering the ones you most want to convert, and effectively making them into purchasing customers.
Have a Testimonials Section on Your Website
You have happy customers, surely, or you wouldn’t be in business. If you haven’t already, send your customers an email and request they write a testimonial or review to publish on your website.
This is a great method for building trust, as your leads see what you can do for other customers like them. They then seriously begin to consider where your company’s products and services can fit in their life and which problems your products/services could overcome for them.
You might choose to add your testimonials to the homepage or on your pricing page, as both are visible locations sure to garner a good deal of traffic.
Streamline Your Sales Processes
With more converted leads comes more sales, so your company’s sales team may be doing twice, even thrice the work. If you don’t already have a rock-solid sales process within your business, now is a very good time to change that. Training your current sales team or hiring new staff are two of your options here.
You might also utilize software, such as customer relationship management software or CRM, to create lists of leads and customers, hold onto recorded instances of communications, automate tasks, and see where the leads are on your sales and conversion funnel. CRM in sales is of great assistance.
Communicate at the Right Times
Remember how earlier we mentioned that failing to get in touch with your lead or waiting too long could cause them to drop off the funnel? It’s true. If a lead shares their contact information with you, they expect some sort of confirmation or follow-up shortly thereafter. This inspires confidence that their giving you their email address was a good idea.
Even once you’ve converted the lead into a customer, you don’t want to go dark on them. That will make them feel abandoned and have them second-guessing their decision. Keep up the communication and follow-ups when necessary. If you’re having a hard time managing when to send emails to so many leads or customers, use email automation.
Rely on Social Media
We haven’t talked much about social media in this guide yet, but it’s a great option for lead conversion. If your company isn’t yet active on all the popular social platforms, such as Facebook, Twitter, LinkedIn, Pinterest, and Instagram, then you want to change that immediately. Post relevant, educational, and thoughtful content on your social accounts that are targeted to the audience segments that are most receptive to your products and services. Between posting content of that nature, share promotional information as well.
This tip doesn’t just apply to B2C industries, but B2B ones as well. Hootsuite mentions that B2B companies can gain significant leads, up to 80 percent, by marketing on LinkedIn alone. Social media is powerful, so leverage it!
Focus on Your Landing Pages
As you begin promoting your lead gen tactics, your landing pages will get a lot of traffic. You need to ensure that for each product and service your company sells that you have a landing page for each one.
Don’t write paragraph upon paragraph of promotional information and sales talk for your landing pages, as this will bore any lead fast. Instead, add CTA buttons, videos, and images to break up the text. Keep your copy clean and informative and shorten your paragraphs to a few lines for each.
Landing page templates can help you set up your ideal landing page in less time, but do change some elements of the template so yours isn’t just a copy.
Prioritize Your SEO
Your company is one of the millions across the world. How do you ensure that leads and customers can find your business and yours alone? You need to get your site at the top of search engine results, and that means working on your SEO.
Search engine optimization rules and Google algorithms change frequently, but you can’t go wrong with writing quality page content (no keyword or link stuffing), having page headers, using keywords in your page URLs, and titling your pages.
Produce Quality Content
From your homepage to your blog, your social posts, and any other written communications, you want all this to be high-quality. Writing in such a way allows you to establish your company’s brand voice, which should be consistent from one piece of published writing to another. That’s a great way to build up your lead’s trust in you.
Lead Conversion Strategies for Your Company
Now that you’ve got the lead conversion process underway, you could also do with some lead conversion strategies to follow.
Here’s a conversion strategy definition. Your conversion strategy is your action plan that combines the processes from above with several methods to boost your lead conversion rates.
Once you see the conversion strategy examples and ideas we have for you, you can use them to create a workable plan for your own company.
Create Buyer Personas
In the B2C sphere, buyer personas are a great way to visualize and get to know a lead that’s new to you. Based on your current audience of leads and customers, you take the most prevalent traits and pain points and use this data to create personas.
These buyer personas tend to have fun names like “Hard-Working Harold” or “Tough Sell Terri.” Each buyer persona has their own job, income, family, pain points, and personality, some of which is fictional and the rest of which is based on your data. When your sales team comes across a real Hard-Working Harold or Tough Sell Terri, they can use the personas as sort of like a blueprint and possibly boost conversions of this lead.
Run a SWOT Analysis
SWOT is short for strengths, weaknesses, opportunities, and threats. Look to your company as well as the competition in your industry to get a feel for what the market will be like for the coming year and how ready your company is to cope.
You can also rely on a SWOT analysis as yet another way to get a glimpse into your audience, specifically, their dominant income and shopping preferences.
Create Conversion Goals
Converting leads is great, but you don’t just want to attract a bunch of leads you have no long-term plans for. How many leads does your company need to grow financially? How realistic is it to expect a quarter of those leads in a few months? How long would it take to generate half the leads you want? Which products and services could you introduce that suit your growing leads and customers’ needs?
Without conversion goals, answering the above questions is next to impossible. Whether your company opts to create weekly, monthly, or quarterly lead goals, put these down on paper (or your computer). Then, determine the steps to follow to meet all your conversion goals, both the smaller, short-term ones and the larger, significant ones.
We discussed the importance of CRM earlier, especially as part of your lead conversion system, and we want to take a moment to reiterate that now. Through CRM, you can load all your new contacts or leads to one dedicated system. If a current sales team member is associating with that lead, you’ll see a record of communication between the lead and the sales rep. Other relevant information about each lead is included in their profile as well.
Through automation, you can also assign leads to the appropriate sales team members, send emails and follow-ups, book meetings and consultations with interested leads, and schedule blog articles and social media posts.
Watch Your Leads on the Conversion Funnel
The above illustration of an average sales and marketing funnel shows the steps needed for a lead to convert. As the lead begins at the first stage, which is awareness, they’re the most likely to jump off the funnel. Once the lead has converted into a customer, you can safely trust that they’ll be with your company for a while, although likely not indefinitely, as we said.
When you use a tracking system for your conversion funnel, you can gauge which leads are where on the funnel from start to finish. You’ll also have your finger on the pulse of what else you’re lead is up to, such as which pages on your website they’re visiting and what they’re doing when they’re there (like clicking links).
Having this information handy allows you to keep the lead conversion process moving smoothly. You could also potentially retain a disinterested lead before they exit the funnel if you can catch them quickly enough and regenerate their interest.
Start a Referral Program
Once your customer base is a healthy, robust one, you don’t necessarily have to do all the hard work to generate and convert leads yourself. Ask your customers to refer their friends, neighbors, family, and colleagues to your company. As part of a referral program, the customer would get something back in return, such as a discount on their next purchase or maybe even an occasional freebie.
If the customer’s friends and loved ones begin referring yet even more people, then these new customers can take advantage of referral discounts and deals as well. You also net twice the leads.
The good thing about a referral program, besides letting your customers get leads for you, is that the trustworthiness is already there. If a friend asked you to buy from a company because they had a good experience, wouldn’t you give that company a chance? After all, you trust your friend and their judgment, so you assume they wouldn’t steer you wrong.
You could thus end up with more qualified leads who are ready to buy through a referral program.
Analyze Your Growth and Your Successes
No matter which of these methods you add to your lead conversion system, be it some or all, you have to track your successes along the way. Analytics such as those in your CRM or another software can automatically produce reports with charts and graphs highlighting what you did right for the recent period and what you could do better.
Even if your company has successfully converted a lot of leads lately, you want to keep thinking of inventive ways to draw in more. Lead gen is a never-ending process, so remember to prioritize it even when all those new leads-turned-customers bring in a lot of money for your company.
Lead conversion is the process of nurturing leads into buying customers. Converting a lead entails knowing about their pain points, developing a professional bond with them, reaching out at the right times, and offering a product or service that’s relevant to them specifically.
Whether you’re targeting B2B or B2C leads, the information in this article can inform your most powerful lead conversion strategy yet.