Do You Have Bad Pipeline Conversion Rates? (Here's How You Know)
Over the last ten years, I've managed, and researched sales funnel analysis on conversion rates.
The truth is, 90% of the time, I wasn't sure I was working off the right metrics.
Use these assumptions below and throw the rest away:
Funnel Stage Average Conversion Rate:
Note: The problem here is that every company/person has a different definition of an MQL, SQL, and Sales Opportunity. Make sure yours is transparent so as not to skew numbers.
New Lead > Meeting attended
A meeting attended > SAL
SAL > Opportunity
Opportunity > Deal
If 31% seems high, you can also assume from SQL to close that 20% is about average. 30% is a good target; obviously, anything above is phenomenal.
Opportunity-to-Close rates should be >20%, but they vary widely depending on the industry, product offering, and price. It's painful to be a marketer when rates are <20%. There's honestly not a ton Marketing can do to help, but it puts exponential pressure on the top of the funnel (I've been there, it's no fun).
Deal close rate assumptions:
1. Deals < $2,000 in ACV should close on average within 14 days.
2. Deals < $5,000 in ACV should close on average within 30 days.
3. Deals < $25,000 in ACV should close on average within 90 days.
4. Deals < $100,000 in ACV should close within 90-180 days, depending on # of stakeholders and gates.
5. Deals > $100,000 in ACV will take 3–9 months to close on average. They can take the better part of a year, as these purchases are budgets on Annual cycles. Some deals will be faster, some shorter. But on average.
Now, like magic, you don't have to spend ten years learning about *conversion metrics* and focus on improving revenue flow-through.