What is the ideal pipeline conversion rate?

I feel this falls short of what matters because it’s focusing attention on the problem not the solution. I get why everyone does this but why aren’t we starting with a better question? How do I create the conditions where we convert 100% of what we propose? Impossible? Unrealistic? Maybe. And I know which end of that spectrum is like to start closer to. We start off with the wrong intent if we are thinking about selling and conversion rates. Those are SYMPTOMS of the buyer achieving what they intended.

The ideal pipeline conversion rate from lead to win depends on the lead source. Here are some handy markers I have learned over 30 years in sales: Door knocking: every 21 doors knocked results in one sale. Cold calling phones: every 100 dials lead to one sale. Cold emailing: please advise. Pro-active calls to existing customers: every 3 calls (spoken to) results in one order. Existing customer enquiries: 7 out of 10 enquiries become an order. Referrals: 7 out 10 people/businesses that you are referred to by one of your customers will buy from you. The above are averages and also depend on the seller’s ability to sell.

I think this is actually a false premise. Because people aren't in a funnel. Otherwise how could you follow up with somebody and they become a client? Really it's more like people are different places on the Way toward the end goal. Some are right at the starting line, some are further down and some are nearly at the goal post. I got this idea from a article by data driven a company that does a lot of social media and analytics. I prefer the term customer journey. And on the customer journey you are looking at a person who is ready to buy, maybe thinking about buying, and maybe hasn't really thought about buying. And when you do marketing that's what you should be looking at, who are you talking to and at what stage in the journey.

Always start by looking upstream and asking, are we attracting only our ICP or our anti-ICP too? Every non-buyer (not yet a buyer) who is also a non-customer (cannot and will never be a buyer of your solution) has to be followed up - 6-11x for a warm inbound and 33-46x for a cold outbound! What do those numbers tell you is coming downstream? How can we stop attracting the wrong prospects? If we do then I recover thousands of dials and at 15 manual dials an hour with a hit rate of 1 effective connection every 2-3 hours is it any wonder conversion rates are shocking? 3%CTR x 15% close rate = 0.0045% success rate at generating revenue 99.9955% failure to convert into cash pass on to my sales team. NO THANK YOU!

Connecting with new business leads in a timely manner is also a key lever to increase pipeline conversion rates. Contacting prospects within hours vs. days or weeks of showing purchase intent will increase the possibility of converting them.

Improving pipeline conversion rates takes an analytical approach to identify what is happening first. Then look at the possible reasons and decide how to address them. It is not guessing and jumping to conclusions by those not involved in the selling process.

I believe it's important to consider the size of deals and volume of flow in the pipeline before deciding whether conversion rates even matter. In a scenario where deals are relatively small, and very numerous, it might help. But in a scenario where deals are large but much fewer in number I don't think it helps too much. In the latter scenario I think it's more important to look at deals qualitatively, not quantitatively, which requires having a much deeper understanding of the many different aspects of a sales opportunity, and stronger qualification criteria.

There is nothing like the ideal pipeline conversion rate. The pipeline conversion rate depends on your business. The relevant question is, whatever the conversion is today, can we make it a little bit better? What can we change in the skills, tools or behaviours of the sales team, to support an improvement in sales effectiveness? And don't cheat to yourself: the easiest way to have a high conversion rate is to report less opportunities, but that is not what we are talking about. (Although that is what you will get if you make the conversion rate a target).

All businesses, products and target markets form a unique palet to win deals on. Improve your conversion ratio by knowing your product, understand the market you work in and match your product to help customers move forward faster and better.