Conversion

Conversion is the share of deals that moved from one stage to the next. It shows how well each step of your sales process works. A single number from inquiry to payment hides where deals stop. Conversion between neighboring stages shows you the exact step.

The formula has two parts. "Deals that moved on" is the number of deals that reached the next stage. "Deals at the stage" is how many were at the earlier stage in the same period. Both come from the CRM: a report by stage, or a count by stage in your spreadsheet. Multiply by 100% to get a percentage. Example (invented numbers): of 27 conversations, 14 reached a proposal: 14 ÷ 27 = 52%.

Count the same period for both stages.

Of 27 conversations, 14 reached a proposal: 14 ÷ 27 = 52%.

The head of sales calculates conversion for each step once a month and watches the trend every week. Each seller sees their own numbers next to the team's. The owner looks at the bigger picture: which step is lowest, and is it moving.

Conversion decides what you work on. A weak step from conversation to proposal points to qualification or the first call. A weak step from proposal to payment points to price and follow-up. Fix the weakest step first, then measure that same step a month later.

Three neighboring terms build on it. The funnel gives the counts at each stage. The leak is the stage with the lowest conversion. Win rate looks only at deals the customer has decided on and shows what share ended in a sale. The forecast is built on it.

• Mixing periods. Conversations from one month and proposals from another give a number that means nothing. Count both stages for the same period, or follow one group of deals from start to finish.
• Losing deals that skipped a stage. A deal that went from inquiry straight to proposal still passed the conversation stage. Count it at every stage it passed, or your shares will be off.
• Trusting small numbers. With a handful of deals, one customer shifts the share by many points. Start with a longer period, such as a quarter, before you draw conclusions.
• Comparing with someone else's figure. Another company has other customers and other prices. Compare each step with itself, month to month.

By Friday, the head of sales takes last month's deals from the CRM and counts them at each stage. Calculate conversion for every pair of neighboring stages, with the same dates for both. Write the results in one line, from inquiry to payment, then do the same line for each seller. At the weekly meeting, show the team line and circle the weakest step. The team starts there next month. Keep the line, so next month you compare the same steps.

Which numbers to check every week, with one definition for the whole team.