How to calculate sales conversion rate
Conversion rate turns a vague sense of funnel health into a specific diagnosis. By measuring the pass-through between every pair of stages, you find the exact point where the most prospects leak.
The power is in stage-by-stage measurement. An overall lead-to-customer rate tells you the outcome; the per-stage rates tell you where to fix it.
- Advanced / entered The formula
- Per stage Where to measure
- Weakest link What to fix first
Short answer
A sales conversion rate is the percentage of prospects who move from one stage to the next. Divide the number who advance to a stage by the number who entered the prior stage, then multiply by 100. If 100 leads produce 20 opportunities, the lead-to-opportunity conversion rate is 20 percent. Measure it at every handoff.
Step by step
Define your stages
List the stages a deal passes through, such as lead, MQL, SQL, opportunity, and closed-won. Conversion is measured between each consecutive pair.
Count entries and advances
For each stage, count how many entered it and how many advanced to the next. Use a consistent cohort and time window so the numbers reconcile.
Divide advances by entries
Conversion rate for a step equals the number who advanced divided by the number who entered, times 100. Repeat for every step.
Find the weakest step
The lowest conversion rate is your constraint. Fix that one step, remeasure, and repeat. Small gains at the weakest link beat effort spread evenly.
Worked example
A cohort of 1,000 leads produces 300 MQLs (30 percent), 120 SQLs (40 percent of MQLs), 48 opportunities (40 percent of SQLs), and 12 customers (25 percent of opportunities). The overall lead-to-customer rate is 12 / 1,000 = 1.2 percent.
The biggest leak is lead to MQL at 30 percent, but a 5-point gain at the 25 percent opportunity-to-close step (the last multiplier) may be worth more per point. Model each before choosing where to invest.
How Ardovo handles it
Ardovo computes conversion between every stage automatically from live data, so the funnel is always current. Rook points to the stage with the biggest drop and estimates the revenue impact of fixing it first.
Frequently asked questions
What is the sales conversion rate formula?
The number who advance to a stage divided by the number who entered the prior stage, times 100. Measure it at every handoff to find where prospects leak, not just the overall lead-to-customer rate.
What is a good lead-to-opportunity conversion rate?
It varies widely by source and definition, but many B2B teams see 10 to 25 percent of qualified leads becoming opportunities. Inbound converts higher than cold outbound. Track your own trend and by source.
Which conversion rate should I focus on?
The lowest one relative to its benchmark, because it is the constraint. But weigh position in the funnel too: improving a late-stage rate multiplies against everything upstream, so it can be worth more per point.
How do I improve conversion rates?
Fix the weakest step first. Better qualification lifts early rates; better discovery and multithreading lift middle rates; tighter closing and pricing lift late rates. Measure, fix one step, remeasure.