B2B Sales Conversion

B2B Sales Conversion Ratios

B2B sales is all about B2B sales conversion and driving revenue. That process is comprised of a series of steps, a methodology or cadence that are designed to continually push things to a close – either a yes, or a no. However to be honest, I don’t really ever hear “no’s”, rather just not now’s. 

Part of the B2B sales conversion effort is understanding the metrics of the sale and how your investment in sales translates to output. It takes resources to grow sales and it is also important to understand the costs, results and ROI of those investments.

There will be a lot of models that can be built to articulate this and in many cases, different factors will come into play when assessing results. These could range from complexity of sale, newness in the market, type of sale – opex vs capex to other things that may affect the sales process like exchange rate fluctuations, shipping challenges, border blockades (unbelievable that this happened in Canada) to Covid shutting entire economies down. So, my point really is that every situation will be different and you will have to make adjustments to your metrics and expectations to take into account those factors but there are some core things that you can start to track now so you can begin to build your sales ROI by understanding your basic B2B sales conversion ratios.

Here are some conversion metrics to capture to begin to run some conversion ratios. Remember, this is a done over time on a continuous basis. The reason for this is that as an example, if you are launching a new B2B product to market and have to go through a long customer educational process and pilot process vs launching a bolt on product to something you are already selling that has an established customer base, your time to market will be completely different.

So that being said, here are some B2B sales conversion metrics to start to capture:

  • Accounts
  • Contacts targeted
  • Tasks (calls, calls with no answer & emails)
  • Meetings (virtual or in person)
  • Number of Opportunities in the funnel
  • Value of funnel
  • Closed deals
  • Average deal size
  • Timeframe

As we build out the ROI, lets look at a few conversion ratios including:

  • Accounts to Meetings:
  • Tasks to Meetings:
  • Meetings to Closed Deals

Next, lets look at a couple of examples for us to begin to run some basic conversion numbers off of and then begin to work on final ROI. I have purposely chosen these two firms as they are completely different in their product set and target market. I will not name companies but will articulate what they sell.

Company 1 makes a software solution for the Institutional market. They have a decade in the market, are well respected in their field and their solution has a payback of under 1 month. Savings by using their product can be in the millions of dollars.

Company 2 is a distributor for an imported product in the construction and renovation space with limited or no mindshare in the market or installations. The product has great advantages over traditional renovation methods but requires a lot of customer education.

Company 1: Software company

  • Accounts target – 600
  • Contacts targeted – 800
  • Tasks (calls, calls with no answer & emails) – 1800
  • Meetings: virtual or in person – 60
  • Opportunities in the funnel  – 90
  • Value of funnel – $200,000
  • Closed deals – 190
  • Value of closed deals – $1,100,000
  • Average deal size – $5,789
  • Timeframe – 12 months
  • Renewal Rate – approx. 95%

Lets look at some conversion ratios

  • Accounts to meetings: 10% (600/60)
  • Tasks to meetings: 3%
  • Meetings to closed deals: 316%

Of note here, the meetings to closed deals is very high – the reason why each situation is different is that some customers have under them multiple other customers each with their own sub licenses. These sub-licenses are each considered a “closed deal”.

Company 2: Product distributor

  • Accounts target – 700
  • Contacts targeted – 1100
  • Tasks (calls, calls with no answer & emails) – 2400
  • Meetings: virtual or in person – 77
  • Opportunities in the funnel  – 30
  • Value of funnel – $660,000
  • Closed deals – 4
  • Value of closed deals – $10,000
  • Average deal size – $2,500
  • Timeframe – 12 months
  • Renewal rate – N/A

Lets look at some conversion ratios

  • Accounts to meetings: 11%
  • Tasks to meetings:  3%
  • Meetings to closed deals: 0.05

Of note in this situation, the clients being sold to are on a national level, initial projects are pilots and it takes many months to even secure a pilot. In some cases the pilots are done at or below cost to provide tangible proof the product is viable. The upside is that if the pilots are successful, the product has the chance to be spec’d in nationally which would lead to a substantial increase in sales with less prospecting. 

As you can see, the conversion ratios and any conclusions you draw need to be taken into context as the stage and type of company matters greatly. 

In the end, these numbers are interesting to start to set baselines for success and measure future successes against. Understanding your conversion metrics can help you identify the effort required to close business, where improvements can be made, which ultimately factors in to your ROI. Over time, as well, you will be able to identify the ROI of the sales effort by factoring in that cost (total cost of sales) vs sales results.

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B2B Sales Conversion Ratios