Conversion Rate

Conversion Rate tracks stage-to-stage progression through the sales funnel, showing how effectively leads and opportunities advance rather than stalling or dropping out. In B2B SaaS, it's calculated at specific transitions (lead → MQL, MQL → SQL, SQL → Opp, Opp → Proposal, etc.) to pinpoint bottlenecks and measure process efficiency.

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Unlike win rate (final outcomes) or close rate (deals reaching decision), conversion rate reveals where deals get stuck, enabling targeted improvements in qualification, discovery, demos, or negotiation. Sales leaders segment it by channel, segment, rep, and product to optimize the full funnel.

How to Calculate Conversion Rate

Stage Conversion Rate

Conversion Rate (%) = Number Advanced to Next Stage ÷ Number Entering Current Stage × 100

Example (SQL → Opportunity Conversion)

• 200 SQLs enter the stage
• 60 become qualified Opportunities
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Conversion rate = 60 ÷ 200 × 100 = 30%

Full Funnel Conversion (Lead → Closed-Won Conversion)

End-to-End Conversion = Closed-Won Deals ÷ Total Leads × 100

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Track each stage separately for diagnostics:

• Lead → MQL
• MQL → SQL
• SQL → Opportunity
• Opportunity → Proposal/Negotiation
• Proposal → Closed-Won

Why Conversion Rate Matters

Conversion Rate identifies exactly where your sales process breaks down. Low rates signal…

• Early funnel: Poor lead quality, weak messaging, bad ICP fit
• Mid-funnel: Ineffective qualification, discovery, or demos
• Late funnel: Pricing objections, competition, procurement delays
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CROs use conversion rates to prioritize interventions (for example, 15% SQL→Opp signals qualification training needed). Higher conversion rates mean more revenue from the same lead volume and sales capacity.

Industry Benchmarks

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Inbound deals typically see 2–3x higher early-funnel conversion than outbound.

Real-World Examples

• A SaaS sales team sees 12% MQL→SQL conversion, but 45% SQL→Opp conversion; marketing improves lead scoring to 3x early conversion.
  
  
• A mid-market sales org with 25% Opp→Proposal conversion finds Demo stage is seeing the most drop-off; a new demo framework boosts conversion to 55%.
  
  
• An enterprise sales team improves Proposal→Close conversion from 28% to 42% with Mutual Action Plans and pricing playbooks.

Common Mistakes

• Tracking aggregate conversion only, missing stage-specific bottlenecks.
• Different time windows for numerator/denominator (leads from Q1, conversions in Q2).
• Not segmenting by channel/segment, hiding inbound (high conversion) vs. outbound (low) differences.
• Gaming early qualification to inflate rates, creating poor-quality downstream pipeline.
• Ignoring rep variance—top reps often have 2x conversion rates of bottom quartile.

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The Fix: Track each stage separately, segment by channel/segment/rep, use consistent time windows, and pair with win rate and velocity to validate quality.

Frequently Asked Questions

What’s the difference between conversion rate and win rate?

Conversion rate = stage progression. Win rate = final won vs. decided opps. You need to look at both to get the full picture.

What's a good conversion rate?

30–50% at key stages (SQL→Opp, Opp→Proposal). 1–5% end-to-end conversion (lead→close).

How often should I review conversion rates?

Monthly by stage/channel/segment for finding and solving bottlenecks. Quarterly to monitor trends and guide process changes.

Should I excluded ramping reps?

Track them separately. Ramping reps have lower conversion rates. Use fully-ramped benchmarks for planning.

Can high conversion hurt revenue?

Yes, if poor qualification creates low-ACV or low-quality wins. Balance conversion rate with deal size/win rate.

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Last Updated: December 18, 2025

‍Reviewed by: Ben Hale