Sales conversion: how to count it right

How to calculate conversion so the number does not lie

in short

A conversion rate with no agreed numerator and denominator means nothing. We have seen the same company in the same month read as both 7% and 12%, the only difference being what counted as an enquiry. The working standard: count enquiries per customer rather than per message; a customer returning after thirty days of silence is a new enquiry; a sale is money received, not an order created; and the month a deal belongs to is set by the date of first payment, not by the date the record was created.

Why one company has two conversion rates

Conversion is a fraction. Until you agree what sits in the denominator and what sits in the numerator, arguing about the percentage is pointless.

The usual disagreements: in the denominator, every message versus every customer; in the numerator, an order created versus money received. Each of those pairs shifts the answer by half again or double.

Four definitions to lock down

Enquiry. One customer in one period is one enquiry, however many messages they send. Otherwise a talkative customer distorts your statistics.
Repeat enquiry. The same customer after thirty days of silence counts as a new enquiry. Thirty days is our threshold; yours may differ, what matters is fixing it once.
Sale. A sale is money received. An order with no payment is not a sale, however inconvenient that is for some people.
The month a deal belongs to. Set by the date of first payment, not by when the record was created. Otherwise a deal booked in June and paid in July disappears from both months.

On a furniture project this distinction flipped the conclusion: a month that read as a failure by record dates turned out to be over plan by first-payment dates.

Three conversion rates you must not mix

Enquiry to order. The headline number for a sales team.
Qualified lead to payment. A smaller denominator, so the number always looks better. Saying «qualified» out loud is mandatory.
Viewer or follower to payment. That is a marketing metric, not a sales-team one.

All three can live in one report, as long as each is called by its own name. When a deck says simply «35% conversion», it is the third number, or the second, and almost never the first.

What to do with your own reporting

Write the four definitions above out as one page and show it to your reps.
Check whether your CRM can calculate on those definitions. Often it cannot: no payment date, or no repeat-enquiry flag.
Calculate one month by hand on the new definitions and compare it with what the CRM shows.
If the gap is more than a tenth, fix the CRM rather than the definitions.

Questions people ask

Should an enquiry mean a message or a customer?

A customer. One person in one period is one enquiry, regardless of message count.

After how long does a returning customer count as a new enquiry?

We use thirty days of silence. The threshold can differ to suit your cycle; what matters is fixing it once and not changing it between reports.

Can an order count as a sale?

For production planning, yes. For sales-team conversion, no. A sale is payment.

Why does first payment set the month?

Because otherwise a deal created in one month and paid in another either vanishes or doubles, and monthly figures stop reconciling with the bank.