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“Lead conversion” is defined as the process of converting a prospective client, referred to as a lead, into an actual customer. A “lead” can be either a person or a company that has shown interest in your product or service through various methods, such as completing an online form or signing up.

More specifically, it refers to the stages in the marketing lifecycle that result in a lead taking action and becoming a customer, such as purchasing a product or registering for a service. One of the primary goals of marketing is to turn as many leads into customers as possible, so lead conversion is incredibly important. The duty of lead generation is shared between the marketing and sales teams.

Get a more comprehensive answer to the question, “What is lead conversion?” below.

What Is Lead Conversion for?

All customers start as leads at some point in the marketing lifecycle. Lead conversion is turning leads interested in your products and services into paying customers, increasing revenue. The more leads you convert, the more customers and revenue you will generate.

The “end game” is not only to rack up leads but to close those sales, yet many marketing teams don’t focus enough on step between a lead coming in and when the sales team closes them. Improving lead conversion can produce more revenue by turning leads into bona fide customers.

What Is Lead Conversion Rate?

When learning about “What is lead conversion?” it’s important to know about lead conversion rate (LCR) — a metric that measures the effectiveness of converting leads into customers. You can calculate LCR by taking the number of conversions you generated in a specific timeframe, say the last 12 months, and dividing that amount by the number of leads in your organization during the same period. Then, you multiply this number by 100. Another way to express this calculation is:

LCR = (Number of conversions / number of leads) x 100

Say you had 1,000 leads in the previous 12 months and converted 200 of these leads into paying customers. Your conversion rate will be 20% ((200 / 1,000) x 100 = 20.)
Analytics software will let you track your conversion rate over different periods and learn whether it’s improved or declined.

How to Perform Lead Conversion

After businesses learn the answer to “What is lead conversion?” they want to know how to convert more leads into customers. There are several ways to achieve this goal:

Use lead scoring

You must convert leads to customers at the right time. Converting leads too soon or too late can cause potential customers to fall out of your marketing funnel. Lead scoring is a technique that helps you determine whether your leads are ready to convert.
Lead scoring involves assigning a numerical value to each lead in your organization based on factors such as demographic information, behavioral information, and purchasing intent. This way, you can identify high-value leads likely to become customers soon. You can perform lead scoring manually or use software to do all the hard work for you.

Engage with leads

Engaging with leads about your products and services might encourage them to purchase a product or sign up for a service. You can improve lead engagement by sending out regular communications about your offerings via email, social media, and other channels. The more you communicate with leads, the more likely they are to become customers — a process called lead nurturing.
For example, you might want to create a marketing campaign that lets you communicate with leads at different touchpoints. This could involve sending several emails about your product to a lead before calling them on the phone to reiterate your product’s features.

Invest in analytical tools

Analytical tools and lead conversion go hand-in-hand, allowing you to track leads across different channels and decide when to convert them. These tools provide real-time insights about the people you are trying to convert, helping you fine-tune your marketing strategies and improve your conversion rate. For example, you can learn where your most valuable leads come from and which channels are the most effective for converting leads. Share data insights and metrics with members of your marketing team for more effective results.

Segment your leads

Not all leads are the same. For example, some people might respond better to a particular marketing channel, say social media, than others. That’s why it’s essential to segment leads based on their demographic information, purchasing behavior, and other factors. By segmenting your leads, you can send targeted marketing messages to different groups of people and increase the likelihood of conversions.

Generate more leads

The more leads you have, the better. If you have a small group of leads who are unlikely to convert, you won’t be able to generate additional revenue. Expand your lead sources and incorporate search engine optimization (SEO), SMS marketing, cold calling, direct mail, and other strategies into your marketing mix. With more lead sources, you can produce more leads and convert them into paying customers.