Welcome to the Metric of the Week. This week we’ll be discussing ‘Lead Conversion Rate.’
What is the metric?
Your Lead Conversion Rate is the rate at which leads convert into paying customers.
For instance, let’s say you get 100 leads per day and your lead conversion rate is 10%. Thus, you’re getting 10 new customers per day.
On the other hand, let’s assume your competitor is getting half the leads (50 per day), but has a 30% conversion rate.
In this case, your competitor is getting 15 new sales/day to your 10 (and their advertising costs may be significantly less since they only needed half as many leads as you).
Why should you care?
By increasing your lead to sale conversion rates, your profits grow dramatically since revenue rises sharply while your advertising costs stay the same.
What does it look like?
The chart below shows Lead Conversion Rate by day, week and month. The monthly decrease shown on the chart on the right would result in significantly reduced profits.
How can you positively effect this metric?
There are several ways to increase your lead conversion rate. One way is via lead nurturing which can be accomplished by sending emails, letters, videos, etc. to your leads to better educate and “warm” them. Another way is to improve your sales scripts, so leads are more likely to buy. There are numerous other ways to improve your lead conversion rate, but the first step is tracking this key metric.