Conversion rate measures the percentage of prospects or opportunities that successfully move from one stage to the next in the sales process. It's a key indicator of sales effectiveness and helps identify where deals are won, lost, or stalling. According to Gartner (2024), companies that actively track conversion rates have 23% higher pipeline accuracy.
Tracking conversion rates provides critical insights:
According to Salesforce (2024), teams that optimize conversion rates across stages have 31% higher quota attainment.
The basic calculation:
Conversion Rate = (Converted / Total) x 100
| Stage | Count | Conversion | Rate |
|---|---|---|---|
| Leads generated | 1,000 | - | - |
| MQL (Marketing Qualified) | 300 | 1000 to 300 | 30% |
| SQL (Sales Qualified) | 120 | 300 to 120 | 40% |
| Opportunities | 80 | 120 to 80 | 67% |
| Proposals | 50 | 80 to 50 | 63% |
| Won | 20 | 50 to 20 | 40% |
Overall conversion: 2% (20/1,000)
| Type | Formula | Benchmark |
|---|---|---|
| Lead conversion | Qualified / Total leads | 10-25% inbound, 1-5% outbound |
| Win rate | Won / (Won + Lost) | 15-30% depending on industry |
| Demo-to-close | Closed / Demos held | 20-40% for qualified demos |
| Proposal-to-close | Won / Proposals sent | 30-50% for well-qualified |
Conversion rates determine pipeline requirements:
Required pipeline = Revenue target / Win rate
| Parameter | Value |
|---|---|
| Quarterly target | $450,000 |
| Win rate | 25% |
| Required pipeline | $1,800,000 (4x coverage) |
If average deal value = $45,000:
| Scenario | Deals | Revenue |
|---|---|---|
| Proposal-to-close 40% | 20 deals | $900,000 |
| Proposal-to-close 50% | 25 deals | $1,125,000 |
| +10 percentage points | +5 deals | +$225,000 |
| Metric | Poor | Average | Good | Excellent |
|---|---|---|---|---|
| Lead-to-opp | <5% | 5-15% | 15-25% | >25% |
| Win rate | <15% | 15-25% | 25-35% | >35% |
| Demo-to-close | <15% | 15-25% | 25-40% | >40% |
| Overall L-to-C | <1% | 1-3% | 3-5% | >5% |
Better qualification: Strict qualification improves later stages. Use BANT, MEDDIC, or similar frameworks.
Optimize each stage: Low lead-to-meeting? Improve outreach. Low demo-to-proposal? Better discovery.
Speed to lead: Respond faster. According to InsideSales (2024), conversion drops 80% if you wait more than 5 minutes on inbound leads.
For B2B SaaS, 20-30% is typical. Enterprise sales often have lower rates (15-20%) due to longer cycles and more stakeholders.
Start by identifying the weakest stage in your funnel. Often it's qualification (too many bad leads) or closing (lack of negotiation skills).
Yes. Variations between reps reveal coaching opportunities and best practices that can be shared.
Conversion rates are essential for understanding sales effectiveness and optimizing the path from lead to customer. By measuring conversion at each stage, you can identify bottlenecks and make data-driven decisions.
With Prowi, you connect CRM data with commission tracking, so you understand not just what you're earning—but where to focus for better results.