Sales conversion rate (SCR) is the rate of conversion from leads into new customers. Tracking conversion rates is an important part of finding out how the sales funnel is performing.
Leads and Conversions
A lead is any person or business that is possibly interested in buying your product. Some leads are better than others though. This is why the sales funnel is so important; so that conversions can be more efficient. To learn more about different forms of leads and the funnel that they create, you can read about Marketing Qualified Leads and Sales Qualified Leads.
Conversions can be defined in many different ways: a purchase, download, video watch, sign up, or a plethora of other goals. The type of conversion being used is unique based on company needs and goals. The most common conversion is the number of sales, which is the conversion type used in calculating the sales conversion rate.
How to Calculate Sales Conversion Rate
Calculating this form of conversion rate is quite simple. First and foremost, you need a way to track the number of lead and total sales. Once this information is obtained, it becomes as simple as plugging into the following formula:
Conversion Rate = (Total Number of Sales / Number of Leads) * 100
For example, say there are 1,000 unique visitors on a site in a given week. If in the same week you know that 30 sales took place, you can easily calculate the SCR. The 1,000 visitors is the number of leads in this instance and the 30 sales is the number of conversions. Plugging this information in the formula then, we get: (30/1000) * 100 = 3%.
Knowing conversion rate is important in a lot of cases. It is important to try and optimize your conversion rate in order to make the most of leads. Sales conversion rates can frequently be found on OKRs as it it is an important metric to track and always improve upon.« Back to Glossary Index