Are Your Lead Conversion Rates Above Average?
If you want to improve your conversion rates, you need to implement the right sales funnel optimization strategy to get the results you want. This means taking a closer look at your current process and making improvements based on what you see behind the scenes.
From the top of the funnel where visitors get converted into leads, all the way down to acquisition, there’s always something you can tweak to make the most of your lead generation efforts. Effective optimization results in above average conversion rates and sustainable revenue.
Your lead generation plan should include sharing content that’s compelling enough to encourage your target audience to become qualified leads. You know you’ve successfully acquired a lead when they download your e-book, become subscribers, or fill out an inquiry form.
However, the funnel doesn’t end with a lead acquisition. You need to continue nurturing the relationship to turn them into loyal customers. Whether it’s by sending them relevant content, the latest industry news, or updates that reinforce their decision to buy your product or service, don’t neglect the importance of keeping in touch with current clients.
How to Compute Lead Conversion Rates
Before you can calculate these rates, you need to define what type of action defines lead conversion in a particular campaign.
More often than not, lead conversion is defined as being accomplished when the lead becomes a paying customer. But conversion in itself can mean any of these other customer behaviors: becoming a newsletter subscriber, downloading your white paper offer, signing up for an online seminar, sharing content on social media, or a specific length of time spent on your homepage.
Once you’ve clearly defined what a conversion is, you now know what to measure and how to compute your lead conversion rate. Conversion rates are equal to the total number of conversions divided by the number of leads and then multiplied by 100.
If your conversion is defined as leads who become new customers, then the formula should look like this:
Lead Conversion Rate = Total No. of New Customers / Number of Leads * 100
So if you had 100 leads, and 20 of them became new customers, your lead conversion rate is 20%.
Average Conversion Rates per Industry
Conversion rate averages will vary depending on what industry you belong to, so you need to be aware of these figures to accurately gauge if your lead generation campaign is a success or if there’s room for improvement.
In most cases, you should also expect traffic coming from the top of the funnel to be a lot higher than those who have moved further down the tunnel to become Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL).
MQLs and SQLs provide bigger opportunities because they have been identified as leads who want to hear from you and learn more about your product. On average, SQL conversion rates are higher than MQL conversion rates because these are leads that have been identified as those who are interested in your product, and therefore, have a higher propensity to buy.
According to Capterra, the conversion rate average for lead generation in the software industry hovers between the 5% to 10%.
Meanwhile, a Marketing Sherpa study revealed that website conversion rates of traffic that come from the top of the funnel across various industries typically fall within these ranges as well:
|INDUSTRY||AVERAGE CONVERSION RATES|
|Retail or Commerce||3%|
|Travel or Hospitality||4%|
|Manufacturing or Packaged Goods||4%|
|Technology Equipment or Hardware||5%|
|Media or Publishing||10%|
|Professional or Financial Services||10%|
Based on these findings, how is your business performing? No matter where you fall in that range, there’s always something that can be tweaked. What can you do to improve your batting average?
For one, you can streamline your sign up form by removing a few fields that you can do without. When your form is longer than five fields, many visitors get discouraged and end up not submitting their contact details. Instead, try to narrow it down to 3 fields, five at the most.
Another way to improve your lead conversion rate is to use a clear, straightforward Call to Action (CTA) that leaves no room for doubt as to what their next steps should be. Visitors should know what to expect as soon as they click on your CTA button, so pay attention to how you design it.
Are your client testimonials readily accessible on your landing page? If not, it helps to improve your trust elements this will enhance your credibility and inspire confidence in your brand.
As long as you continue A/B testing, tweaking, and improving your strategy based on quantifiable data and industry averages, your conversion rates are bound to improve. It takes consistency, continuous optimization, and persistence to bring your lead conversion rates above average.