How to track Lead to Opportunity Conversion Rate in Google Sheets using AirOps
Lead to Opportunity Conversion Rate: What it is, how to improve it, and best practices for tracking it.
What is Lead to Opportunity Conversion Rate?
Lead to Opportunity Conversion Rate helps you determine whether leads are being converted into opportunities (and eventually paying customers) in a timely, efficient manner.
It measures the number of leads generated by your marketing team and the rate at which those leads result in opportunities. If you have a team of Sales Development Representatives (SDRs) generating leads through outbound prospecting efforts, this metric can also be used to assess individual and team performance.
Note that every company has different definitions for “leads” and “opportunities” – you’ll want to align organizationally on your exact definitions. Generally, a lead is someone who has indicated interest in your product or service, for example, by providing their email address, phone number, or other contact information. An opportunity is a qualified prospect with a strong chance of closing.
Your definitions will also depend on the sales tools that your team uses. For example, Salesforce allows you to customize your lead statuses beyond the default options. You could use these five categories to give your sales team the context they need to prioritize leads that are most likely to become opportunities: New, Open - Contacted, Working, Qualified, and Unqualified. If a lead is Qualified, it can move onto the Opportunity stage. Opportunities can also be broken down further based on their stage: Qualification, Need Analysis, Proposal, Negotiation, and Closed.
How to calculate Lead to Opportunity Conversion Rate
The calculation for Lead to Opportunity Conversion Rate is a relatively simple and straightforward one:
Lead to Opportunity Conversion Rate = (Number of Leads Converted to Opportunities ÷ Number of Total Leads) x 100
Here are some basic examples:
- If you have 100 leads and 10 of those leads turned into opportunities, your Lead to Opportunity Conversion Rate is 10%.
- If you have 1,000 leads and 625 leads moved to the opportunity stage, your Lead to Opportunity Conversion Rate is 62.5%.
Track Lead to Opportunity Conversion Rate alongside other important sales performance metrics
On its own, Lead to Opportunity Conversion Rate doesn’t provide a complete picture of your sales team’s performance. That’s why it should always be tracked alongside other service metrics.
Lead to Opportunity Conversion Rate is commonly tracked in a tool like Salesforce. And while Salesforce is a powerful tool, we’ve noticed something interesting: Sales teams and individual sales representatives strongly prefer to access and analyze data in operating documents that they already use everyday, like Google Sheets ❤️.
Getting high-quality data into an operating document like a GSheet isn’t necessarily easy, though. Especially if it requires you to spend hours manually downloading CSVs from different sources and copying the data into a rickety, VLOOKUP-filled spreadsheet 👎.
You can use the basic calculation above, but there’s a much more efficient way to calculate your team’s First Contact Resolution rate (and other important customer service metrics): AirOps.
With AirOps, you can automatically sync data from tools like Salesforce to Google Sheets, Notion, AirTable, and other operating documents.
In addition to Lead to Opportunity Conversion Rate, you can use AirOps to easily track sales performance metrics such as:
- Customer Lifetime Value (CLV)
- Net Revenue Retention (NRR)
- Monthly Recurring Revenue (MRR)
- Net Promoter Score (NPS
… and more! Get in touch with our team to learn more and get started. While Lead to Opportunity Conversion Rate is an important metric for sales teams to measure, you need a more complete picture if you want to measure overall performance and effectiveness.
Frequently asked questions about Lead to Opportunity Conversion Rate
Should my company track Lead to Opportunity Conversion Rate?
Every organization’s metrics framework will be different. Lead to Opportunity Conversion Rate can be a helpful indicator of your company’s sales performance. Tracking these rates can help you qualify leads better and identify sales employees who have high success rates. It also helps you find gaps in your sales pipeline and understand which nurturing tactics are working or not.
Lead to Opportunity Conversion Rates may deserve a place in your framework if you need a metric that allows you to:
Review your sales team's effectiveness: Lead to Opportunity Conversion Rate is a good way to measure the effectiveness of your sales team and individual SDRs. It reflects how well they are converting leads into opportunities.
Spot opportunities for improvement: Use your Lead to Opportunity Conversion Rate to identify long-term trends related to sales and marketing efforts. You can determine whether a specific campaign should be continued, revised, or abandoned altogether.
Identify bottlenecks in your pipeline: For example, if your Lead to Opportunity conversion rate is 20% and you have 100 leads per month, you have 20 opportunities. This means that 80% of your leads are not converting. If you can identify the root cause, you can unblock the bottleneck.
What is a “good” Lead to Opportunity Conversion Rate?
A “good” Lead to Opportunity Conversion Rate is highly dependent on your industry, your marketing campaigns, and what you’re selling.
It’s somewhat difficult to get accurate benchmarking data on Lead to Opportunity Conversion Rates. ChiliPiper did some digging and here’s what they found:
“.. a benchmark I’ve seen on most sites is from an outdated Salesforce report and it shows the average lead to opportunity conversion rate across different industries is 13%. In an effort to provide more up-to-date information I asked around in a couple of Marketing Slack groups I’m in and the results weren’t surprising either. Most lead to opportunity conversion rates were around 12%, except one which surprised me at 26%, from Ashwin at Optmyzr.”
Why is it important to have a high Lead to Opportunity Conversion Rate?
A high Lead to Opportunity Conversion Rate shows that your organization is attracting qualified, relevant leads that are interested in your product or service. Once a lead reaches the opportunity stage, it’s up to your sales team to nurture and convert.
However, the total volume of leads that move through your funnel and become opportunities isn’t the only metric to assess. Overall lead volume and opportunity volume also matter – you want to see steady growth for both over time. Focusing on increased growth will prevent your sales manager from gaming the system by disqualifying “okay but not great” leads in an attempt to raise their Lead to Opportunity Conversion Rate.
How can I convert more leads to opportunities?
First, you want your sales team to be able to identify which leads are most likely to turn into opportunities. You can do this by using lead scoring — if a lead scores high enough on your lead scoring system, it'll get automatically assigned to the opportunity stage in your pipeline.
This makes it easier for your sales team to focus on deals with relevant, highly qualified leads, instead of wasting time trying to close deals with dead-end leads.
Second, make sure that your sales reps are getting all the information they need about each lead for them to be able to qualify them effectively. This includes things like their industry and company size, as well as any other information that might be important for making an informed decision about whether or not your company’s offerings are a good fit for both parties.
What are some other types of lead conversion metrics my sales team should consider tracking?
You need to track the right metrics to know how effective your marketing and sales efforts are, otherwise you'll have no way of knowing what's working and isn't.
Here are some additional lead conversion-related metrics that you can track to gain a complete understanding around the efficacy of your sales and marketing processes:
1. Conversion Rates measure how many people complete a desired action, like making a purchase or downloading a lead generation asset. Every company has a different definition of conversion (and often even different types of conversions)
2. Cost Per Lead, which provides insights into how much you’re spending to acquire new leads.
3. Lead Response Time, a sales performance metric that tracks how quickly your team responds to new leads.
4. Lead Quality Score, which measures the quality of a lead based on factors like industry, company size, and role, then assigns it a score from 1 to 100 based on how well it matches up with your target customer profile. A higher score means better leads, and better leads mean more conversions and ultimately more sales.
These metrics are just the tip of the iceberg. When you’re trying to get a better understanding of how well your lead generation campaigns and sales team members perform, there’s no shortage of potential metrics to track. That’s why it’s extremely important to remember: If you measure everything, you measure nothing. Choose your metrics wisely.
Recommended resources related to Lead to Opportunity Conversion Rate