Sales conversion rate formula
The sales conversion rate divides the customers won in a period by the leads that entered the funnel for them. Conversion rate, in general, is the percentage of an audience that completed a desired action;[1] in sales the action is buying.
Conversion at each funnel stage
| Stage | Count | From previous stage | From leads |
|---|---|---|---|
| Leads | 2,000 | — | 100% |
| Qualified leads | 600 | 30% | 30% |
| Opportunities | 150 | 25% | 7.5% |
| Customers | 30 | 20% | 1.5% |
The overall rate is the product of the stage rates: 30% × 25% × 20% = 1.5%. Stage rates show where to work. If opportunities close well but few leads qualify, the problem is lead quality or targeting, not the sales team. Plan lead volume backwards from a revenue target: customers needed ÷ overall rate = leads needed.
- Lead-to-customer1.5%
- Leads per sale66.7
- Leads for 45 customers3,000
Turning the rate into budget
Once you know leads per sale, multiply by cost per lead to get a sales-and-marketing cost per customer, which is your CAC. Public companies that report payback periods tie the same chain to gross profit: how long a quarter’s new customers take to repay the spend that acquired them.[3] Work it through with the CAC calculator, and for web forms measure the top of the funnel with the conversion rate calculator. Keeping the customers you win is cheaper than finding new ones,[2] so the customer retention rate completes the picture.
Sales conversion mistakes
- Comparing different periods for leads and wins. A B2B deal that closes in 90 days came from last quarter’s leads. Use cohorts: leads created in a month and what became of them.
- Changing the definition of “qualified”. If the qualification bar moves, stage rates move with it. Keep definitions written down.
- Averaging rates across channels. Add up leads and wins across channels, then divide; do not average the percentages.
Frequently asked questions
What is sales conversion rate?
The percentage of leads that become paying customers: customers won ÷ leads × 100.
How do you calculate lead to customer conversion rate?
Divide customers won by leads in the same cohort. 30 ÷ 2,000 = 1.5%.
How many leads do I need?
Customer goal ÷ lead-to-customer rate. 45 ÷ 1.5% = 3,000 leads.
Is sales conversion rate the same as close rate?
Close rate usually means opportunities won ÷ opportunities; sales conversion rate usually starts from all leads. In the example, close rate is 20% and sales conversion is 1.5%.