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CRM and Sales

What is lead conversion and why is it important?

Alicia Schneider 8 min read
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Sales leads are the lifeblood of any business, yet converting them into paying customers is no easy feat. The process of lead conversion can be complex and time-consuming, but it’s essential for businesses to get it right if they want to thrive.

There are a number of different strategies that businesses can use to convert leads into customers, and the most effective approach will vary depending on the industry and product. However, there are some common best practices that all businesses should follow to give themselves the best chance of success.

In this post, we’ll take a deeper look into lead conversion, discuss some of the best lead conversion strategies, and take a look at how monday sales CRM can help teams with lead conversion management.

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What is lead conversion?

In marketing, lead conversion is the process of turning a lead, or prospective customer, into an actual customer.

The term “lead” can refer to a person or a company who has shown an interest in your product or service in some way such as through an online form or sign-up.

How to calculate lead conversion?

Businesses can calculate their lead conversion rate (LRC) by taking the number of leads and dividing it by the number of conversions and then multiplying the result by 100. The formula for calculating your lead conversion rate looks like this:

LCR = (Total number of conversions / Total number of leads) x 100

Using this formula, if a business has 100 leads and 10 sales, the lead conversion rate would be 10%.

Why is tracking lead conversion important?

There are a number of advantages to tracking your lead conversion rate that range from financial reasons such as budgeting to operational ones like optimizing your lead-to-sale pipeline. But the bottom line is clear – lead conversion can benefit your business in a number of ways:

  • Improve budget planning: Your LCR allows you to track the ROI of your lead generation campaigns, which can be used to justify your marketing spend and make informed decisions about where to allocate your budget.
  • See what’s working: By tracking how many leads are converting, you can clearly understand which marketing campaigns, lead sources, or sales methods are resulting in the most conversions. Having the access to this information allows you to make better decisions and fine-tune your efforts.
  • Compare strategies: Your lead conversion rate enables you to compare the performance of different lead generation campaigns to improve their effectiveness.
  • Understand the customer journey: Tracking lead conversion can provide valuable insights into the customer journey. For example, you may notice that leads from a particular source are more likely to convert if they receive a follow-up call within 24 hours.
  • Identify bottlenecks: Following the lead conversion process allows businesses to identify bottlenecks in their sales process. For example, the monday sales CRM allows you to visualize the percentage of leads lost at each specific stage. So if a company identifies that a percentage of leads are lost at the proposal stage, it can investigate and take steps to improve the proposal process.

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5 strategies for optimizing lead conversion

Improving your LCR involves a lot of trial and error. What might work for one business may not be relevant to another, so it’s important to build a strategy that specifically works for your company and audience. Here are different ways to build and optimize a lead conversion strategy:

1. Nurture your leads

Nurturing leads involves providing leads with additional information to help them make a decision. For example, if a lead is considering your product but is unsure if it is the right fit for their needs, you can provide them with a case study, email newsletter, or additional product information that can help them see how your product can benefit them.

2. Optimize your lead capture

Review lead capture forms to make them as concise as possible while still providing the necessary details. Providing clear follow-up instructions to sales teams will also help them quickly contact and nurture leads. Additionally, segmenting leads into lists can help ensure that the right teams are working on the right leads.

3. Apply lead scoring

Lead scoring can help optimize lead conversion by helping sales and marketing teams identify and prioritize the leads that are most likely to convert into customers. By assigning a score to each lead based on factors like demographics, behavior, and engagement, teams can prioritize their outreach and focus their efforts on leads most likely to convert.

4. Run retargeting campaigns

Retargeting can help optimize lead conversion by allowing businesses to show ads to people who have already shown interest in their products. Pay-per-click (PPC) campaigns are a great way to retarget leads specifically to people who have already visited your site in order to improve the chances of getting them to convert.

5. Employ social proof

Increase the likelihood that a lead will convert by providing social proof that others have found value in what you’re offering. This could take the form of testimonials, social media posts, product reviews, or case studies. Providing your leads with real-life examples of how others succeeded with your brand undoubtedly increases the perceived value of your offering and encourages them to take the next step.

Read: The Lead Management Process: A Practical Guide

Using monday sales CRM to support your lead conversion strategy

The smart way to do this is by using a simple and intuitive lead tracking software, which allows all team members to collaborate and keep track of where a lead is in the pipeline

Use monday sales CRM to:

  • Save time with pre-made, customizable lead management templates to immediately begin creating an efficient and collaborative lead conversion strategy.
  • Maintain an organized lead management board where you can assign owners to each lead to make sure team members are held accountable and leads don’t slip through the cracks.
  • Designate lead scores based on existing data in your contacts to prioritize your leads.
  • Ensure follow-up with leads at the right time through easy-to-use automations.

Statistics show that targeting leads based on their position in a funnel results in a 73% higher conversion rate, demonstrating how categorizing leads using a product like monday sales CRM can help teams maximize their lead conversion process.

 

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FAQs

How can you increase your lead conversion rate?

Employing strategies such as the ones mentioned in this article is a good way to begin improving your LCR. Trying out different methods, tracking metrics, and regularly checking in on how your lead conversion strategies are performing can also help increase your LCR.

What is a good lead conversion rate?

The exact number of a good LCR is highly subjective as it’s based on different factors that are unique to each business. LCRs also differ based on where leads are generated, such as from a landing page, PPC ad, or email. While some businesses may consider 2-4% a good global conversion rate, others may strive for a rate closer to 10%.

How many leads turn into sales?

This is highly dependent on your strategy, number of leads, and sales funnel. Some studies say 10-15% of leads can turn into sales, but the best way to get an accurate number for this is to use the formula to calculate your LCR over time.

Improve your lead conversion process with monday.com

Many moving parts are involved in lead conversion, and if you’re not organized your leads can easily fall through the crack. The monday sales CRM provides your team with one centralized place to track and manage leads so you can take control of your lead conversion process.

Teams can better collaborate on leads, set follow-up reminders, and track conversions. Plus, monday.com has an intuitive, visual interface that can help teams spot patterns and optimize their process over time. Try using monday sales CRM today and give your team the resources they need to score the most leads possible. There’s no lead that will feel out of reach!

Alicia is a digital marketing and tech freelance writer with a passion for turning complex jargon into engaging content that everyone can understand.
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