How many leads does your business convert into actual customers? Is it less than you desire?
Finding high-quality leads is one thing, but converting them is another skill for small businesses to master.
Hi! My name is AJ! After selling my company for multiple seven figures, I created Small Business Bonfire (SBB) to help hungry entrepreneurs reach their goals!
One thing that helped my business tremendously was lead conversion tactics!
What do I mean by lead conversion? Keep reading to learn everything you need to know to boost sales and save money on marketing campaigns!
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What is Lead Conversion?
Lead conversion involves turning prospective customers into paying ones through nurturing tactics.
Some examples of nurturing tactics include the following strategies:
- Behavior automation
- Email nurturing
Every (effective) lead conversion strategy must involve sales and marketing teams.
Also, lead conversion is NOT the same as lead generation.
For instance, lead generation focuses on turning social media or website visitors into leads.
On the other hand, converting leads is the process of turning leads into people who buy your products or services!
What is the Lead Conversion Rate?
The lead conversion rate (LCR) is a crucial metric that sales and marketing teams use.
This metric shows the percentage of leads a business successfully converts into paying customers.
Further, the lead conversion rate is calculated by dividing the number of converted leads by the total number of leads and multiplying the result by 100 to get the percentage.
For example, if you have 100 leads and 20 become customers, your lead conversion rate is 20%.
This rate serves as an indicator of the effectiveness of your marketing strategies and the efficiency of your sales team.
A higher lead conversion rate signifies that your business is turning potential leads into customers well.
Therefore, this rate indicates that your team is optimizing your return on investment (ROI)!
Lead Conversion Formula
The lead conversion formula is as follows:
(Total Conversions / Total Leads) x 100 = LCR
What is a “good” LCR?
The answer varies depending on your industry.
Lead conversion occurs at numerous stages across several communication channels and touchpoints.
Therefore, it’s challenging to determine a single average that all businesses can base their performance on.
Instead, companies should look at their conversion rates at a smaller level.
For instance, you can track your lead conversion rates in the following ways:
- Email conversions vs. landing page conversions (by channel)
- MQL to SQL rate (by stage)
Regardless of your ability to convert leads, a higher LCR is better because it shows you are getting more paying customers.
Benefits of Lead Conversion Tracking
There are numerous benefits of tracking lead conversion rates, including:
- Your company can budget better
- Your marketing and sales strategies are more successful
- You can more easily compare sales and marketing strategies
- Sales teams can better understand the buyer’s journey
- You can identify bottlenecks in the sales process
Let’s look at each of these advantages closer!
Tracking your conversion rate allows you and your team to analyze and follow the ROI of your lead generation campaigns.
Therefore, you can see whether your marketing strategies are worth their cost.
Further, you and your teams make informed, data-driven decisions regarding where you should allocate your budget.
Track Marketing/Sales Success
Tracking your LCR also lets you see if your current marketing and sales strategies are effective.
If you notice a low conversion rate, it may indicate the need to make changes in either or both areas.
Tracking this metric over time can help you identify trends and patterns contributing to successful conversions.
Compare Marketing/Sales Strategies
Tracking lead conversion metrics allows your company to compare various marketing and sales campaigns.
As a result, you can see the performance of various lead generation tactics and adjust specific settings to improve their effectiveness.
The ability to compare different strategies ensures you spend your budget wisely.
Understanding the Customer Journey
One of my favorite advantages of tracking LCRs is that it allows you to understand the buyer’s journey better!
For instance, when you analyze lead conversion metrics, you get valuable insights into each customer journey.
As a result, your teams can implement the best strategies for generating leads and turning them into paying customers!
Finally, tracking LCRs enables you to identify bottlenecks in your sales process.
For example, a low conversion rate at a specific stage of the sales funnel may signal an issue you must address.
This bottleneck could be a problem with any of the following aspects:
- Your messaging
- Website design
Identifying and addressing these bottlenecks can improve your overall lead conversion rate and ultimately increase revenue.
How to Build a Lead Conversion Process
What is the best and most efficient way to build a lead conversion process?
To new business owners, implementing the best strategies can seem challenging.
However, building an excellent lead conversion process is more manageable when you put the three practices I’ve compiled into action!
Gather Lead Information
First, collecting information about your leads and target audience is critical.
Otherwise, your lead conversion strategy is pointless.
Gather any data to help your marketing and sales team build a strategy that aligns with your leads’ needs.
For instance, this information could include things like:
- Communication channel preference
- Source of the lead
- Employee size of the company
- Pain points
When gathering lead information, think about where your leads are.
Some lead sources can include the following outlets:
- Company newsletter
- Messaging channels
- Social media platforms (Instagram, Twitter, Facebook)
When you understand where your leads come from, you can create nurturing tactics to connect and convert.
Identify High-Intent Behaviors
Does your sales team know when a lead is ready to purchase your products or services?
For example, do prospective customers exhibit behaviors that indicate they’re ready to buy?
Meet with your sales team to identify signals of low-intent and high-intent buying behaviors.
By determining these behaviors, your marketing department understands what tactics and follow-up strategies to implement and at what point.
An example of low buying intent is a customer only reading your newsletter.
Yes, this person engages with your brand but is less likely to purchase something than a lead who visits your pricing page.
Build a Lead Conversion Path
Once you collect essential lead data, it’s time to build out a customer conversion path.
The conversion path essentially outlines the steps leads take from their first interaction with your company to when they become buying customers.
Typically, the conversion process involves four parts:
- Understanding the Buyer Journey
- Defining Your Target Audience
- Nurturing Leads Through Email Campaigns
- Converting Leads into Customers
Creating a clear path ensures marketing and sales teams understand what actions to take at each stage.
As a result, you can convert leads efficiently without spending too much time or money in the process!
Lead Conversion Strategies
Lead conversion strategies are crucial for any company.
Your team can implement more effective lead nurturing with the right tactics and enjoy more sales.
Some of the best ways to convert leads include the following strategies:
- Lead scoring
- Lead nurturing
- Utilizing social proof
- Retargeting campaigns
- Optimizing lead capture
- Behavior automation
In this section, I’ll explain these strategies in greater detail.
That way, your company can implement the best strategy for your target audience!
Use Lead Scoring
If your business has trouble aligning your marketing and sales teams on your MQLs vs. SQLs, lead scoring is an excellent strategy.
With lead scoring, you assign numerical points based on each lead’s actions.
Then, these points determine how ready the prospective customers are to buy your products or services.
Some attributes teams use for lead scoring include the following actions:
- Website Activity
- Interaction with social media
- Previous purchase history (if applicable)
- Email marketing engagement
How does scoring help drive better lead conversion?
Scoring leads ensures your sales reps prioritize their time effectively.
What determines a well-qualified lead from a low-quality one?
High-quality leads mean the person is more likely to convert to a paying customer once they are in contact with your sales team.
For instance, when someone has a lead value, your sales agents implement more strategies to try and convert them.
On the other hand, if someone has a low score, your sales reps know they should spend their time on other people.
Further, lead scoring ensures your sales and marketing departments are on the same page and qualify leads the same way.
Ensuring everyone is on the same page translates to a good lead conversion rate!
Nurture Your Leads
Another lead conversion strategy is to nurture your leads.
Usually, companies nurture leads via email marketing messages.
However, other ways to nurture prospective customers include:
- In-person meetings
- Online chats
- Connecting through social media
Regardless of the strategy, the end goal of nurturing prospective customers is to turn them into customers.
If your business implements email nurturing, you might send messages that explain your brand’s mission or pricing information.
Some tactics to make your email nurturing messages catch your target audience’s attention are:
- Personalizing emails with the person’s name (it allows the prospect to feel like you’re catering to them)
- Using automation technology to trigger actions based on how a customer engages with your emails (this saves your marketing and sales team time)
- Segmenting your email list (this ensures you send messages that resonate with various customer groups)
The most critical aspect of nurturing leads is collecting data.
After collecting and analyzing lead information, your team can deliver messages and content that resonates with them.
Use Social Proof
Social proof is an excellent strategy for prospective customers considering your products or services.
What’s social proof?
Social proof gives leads an example of other customers who purchased your products or services.
That way, the prospective buyer knows your company is legitimate.
Some examples of social proof include the following:
- Customer reviews (either on your website or on search engines like Google)
- Customer testimonials
- Influencer messages
- Promotion on social media platforms
Social proof allows potential customers to see how others enjoyed their experience with your brand.
After all, who wants to shop with a company with poor customer service and low-quality products?
Typically, social proof is most effective when leads are close to their decision-making phase.
These customers frequently visit your pricing or landing page to gather information about future purchases.
Social proof can be that extra nudge they need to officially make a purchase.
Additionally, user-generated content (UGC) is an effective social proof method.
UGC content is easy to incorporate into your social media platforms and email marketing content!
Run Retargeting Campaigns
The average website conversion rate is 2.35%.
That means for every 100 visitors to your site, only two or three will convert into customers.
What do you do about the other 97 visitors? That’s where retargeting campaigns come in!
Retargeting campaigns serve ads to leads who have already visited any of the following communication channels:
- Your business’s website
- Your business’s blog
- Your business’s social media pages (Twitter, Instagram, Facebook, LinkedIn, etc.)
These retargeted ads remind leads to return to your site and complete a desired action, such as subscribing to your email list or purchasing your products or services.
Further, retargeting campaigns are an excellent marketing strategy to convert leads because they specifically target people who have already shown an interest in your brand.
These campaigns provide a more personalized experience for the lead, making them more likely to convert.
With retargeting campaigns, it’s essential to understand your target audience and which marketing efforts will resonate with them most.
Therefore, collecting customer data is crucial to optimize lead conversion and retargeting ad campaigns!
Optimize Lead Capture
Another crucial aspect of lead conversion is optimizing your lead capture forms.
Lead capture forms are where prospective customers provide their information in exchange for something of value from your business, like a free e-book or access to a webinar.
Customer information should be valuable data your team can use for future marketing and sales strategies.
For example, your team should consider collecting information like:
- Customer name
- Addresses (physical and email)
- How do they hear of your brand
To optimize these forms, keep them short and straightforward, only asking for essential information.
Avoid overwhelming potential customers with too many questions, or they may abandon the form altogether.
Additionally, consider implementing a progress bar to show how much of the form is left to complete because this can increase completion rates.
Further, ensure your lead capture forms are mobile-friendly as more and more people browse the internet on their phones.
Optimizing your lead capture forms will ensure you retain potential customers due to a complicated or unappealing landing page!
Implement Behavior Automaton
Automation is a helpful tactic for two reasons:
- It saves time
- It can scale well
One example of behavior automation is sending a follow-up email after someone visits your website and browses your products or services.
In this email, you could also include a discount code for the lead’s first purchase, encouraging them to buy from your company.
Activity-based triggers are effective ways to implement email marketing campaigns.
Still, you and your marketing team must get creative when defining the behaviors suggesting a purchase-ready lead.
Here are a few examples of behaviors or actions that automation can help with:
- A lead reviews your business’s pricing page or product page
- A lead signs up for a free trial
- A lead schedules a product demonstration
- A lead asks about product features via your customer support outlet or email
- A lead downloads a high-intent content offer
- A lead follows your social media accounts and shares your posts
Identifying and recognizing key behaviors is crucial to automating follow-up content that leads to more conversions.
Lastly, consult your sales team about specific actions that indicate a customer is ready to purchase your products or services.
Sales reps talk and interact with your target audience regularly so they understand which behaviors indicate high purchase intent!
How to Increase Lead Conversion
What strategies lead to successful lead conversion?
Numerous tactics can help your business capture leads without so much effort that you end up spending hours on the process.
Below, I’ve compiled the best ways to get more qualified leads under your radar!
Develop a Better Lead Scoring Process
A great way to boost conversion rates is to re-evaluate your lead scoring system.
If your conversion ROI is low, it indicates the way you rate leads needs to be more accurate, meaning the people with high values aren’t interested in your products or services.
Improving lead scoring processes starts with your marketing and sales agents.
These departments must be on the same page regarding which actions signify a prospect is ready to buy or uninterested.
Adjusting your lead scoring system is one of the best ways to turn leads into customers.
Know the Numbers
Data and analytics are your best friends!
If your lead conversion is low, your first action should be checking the data.
For instance, two details to review include the following:
- Your company’s conversion path over a long time frame
- The specific point where your lead conversion dipped
Review various aspects that could have led to this change if you notice a particular moment that caused a low conversion rate.
In comparison, running experiments in your conversion path is a good idea if your company has continuously struggled with low conversion.
There are endless causes for low conversions, so starting with data analysis is a smart move!
Define High-Intent Behavior
High-intent behavior refers to any action that suggests a lead is close to conversion, such as downloading a trial or filling out a lead capture form.
To improve your chances of converting leads, you must understand what high-intent behavior looks like for your business.
For instance, some companies may see high intent in someone following their social media pages and engaging with their content.
In contrast, others may consider high-intent behavior to be someone requesting a product demo.
Defining high-intent actions for your business will help you target these leads more effectively and increase conversion rates.
Experiment with Conversion Paths
Your conversion path is a lead’s journey from initial contact to becoming a customer.
If your conversion rates are low, it may be time to experiment with different paths to see which yields higher success rates.
For example, you could offer a limited-time discount or run a social media ad campaign targeting specific demographics.
Experimenting with different conversion paths allows you to see what strategies work best for your business and adapt accordingly.
Overall, increasing lead conversion takes effort and continuous improvement.
However, it’s important to remember that each business is unique, and what works for one may not necessarily work for another!
Automate Lead Nurturing
When it comes to lead conversion, timing is everything!
If you don’t follow up with leads promptly, they may lose interest or forget about your business altogether.
This is where behavior automation comes in handy!
By setting up automated processes for following up with leads based on their actions and behaviors, you can increase the chances of converting them into customers.
Automation saves time and ensures that no leads slip through the cracks.
Using customer relationship management (CRM) software can also help you track and manage leads more efficiently, making the nurturing process smoother.
Keep Your Sales Content Fresh
Outdated or uninteresting content can be a significant turnoff for potential customers.
To increase lead conversion, ensure your sales content is relevant and engaging!
Sales content includes the following things:
- Social media posts
- Email newsletters
- Any other forms of communication with leads
Keeping your content fresh and up to date shows that you are an active and reputable business and can help build trust with potential customers.
Map Out Follow-Up Points
Following up with leads is essential in converting them into customers.
However, it’s crucial to have a structured approach when following up, rather than just randomly contacting leads whenever you feel like it.
By mapping out specific points for follow-up based on a lead’s behavior or actions, you can ensure that your communication is timely and relevant.
Lead Conversion Example
Let’s imagine a cupcake shop as our business.
Suppose a customer, let’s call her Jenny, walks past our shop and sees a poster advertising a new flavor of cupcakes.
Intrigued by the ad, Jenny decides to walk into the store, where she becomes a lead (someone who might be interested in what we’re selling).
To turn Jenny into a customer (called “conversion”), the staff in the store offered Jenny a free sample of the new flavor.
Jenny loves it and decides to buy a dozen cupcakes.
This is a successful lead conversion; Jenny has gone from being someone who might buy our product to someone who does!
In this case, the poster was the ‘lead magnet’ that attracted Jenny, the free sample was the ‘lead nurturing’ that convinced her, and the purchase was the successful ‘lead conversion.’
Lead conversion is when your teams convert a prospect to a paying customer.
Various strategies, like email marketing and correctly timed messages, help turn more leads into loyal customers.
What lead conversion strategies does your company use? Let us know in the comments section!