What Is a Good Funnel Conversion Rate and How to Calculate It

What is a good funnel conversion rate and how to calculate it

You have built a sales funnel, you’re attracting traffic and leads, and helping them convert and become customers. However, you don’t know if your funnel conversion rate is good enough. Not enough customers going down your funnel? Maybe there’s something wrong, and you need to optimize your funnel! 

You should set a funnel conversion rate and aim for that to see if your marketing efforts are paying off, but what should it be? How can you measure it?

In this article, we’re going to learn what a conversion funnel is, its important metrics, how to calculate it, and what a good conversion funnel should be.

Note: One of the best ways to understand if your sales funnel is doing good enough is using session replay software. WatchThemLive offers you the best session replay software. We will explain further; keep reading to find out more.

What Is a Conversion Funnel?

The conversion funnel or sales funnel defines the stages potential customers go through on their journey to convert and purchase. A good conversion funnel leads buyers through all the steps. Many people might enter your funnel, but not all of them will make it to the end and purchase. A well-defined funnel turns most of these potential customers into actual shoppers. 

Usually, the conversion funnels contain three steps:  top, middle, and bottom of the funnel. However, it depends on the company’s sales model; some of them can be more complex. 

An excellent way to track your funnel functionality is using session replay software such as WatchThemLive. With this software, you can follow leads as they go through each stage of your sales funnel. It records visitors’ moves from the moment they enter your funnel until they leave. Watch this video for a better understanding: 

Interested? Sign up for FREE and see WatchThemive’s other amazing features. 

What Are Sales Funnel Metrics?

If you want to improve your marketing efforts and increase sales funnel conversion rate, you need to track some metrics. These metrics show in which stage of the funnel customers are dropping and help you calculate your ROI to build more effective sales strategies. Here are four important sales funnel metrics you need to measure. 

1. Leads

You need to know how many leads enter your sales funnel in a specific period of time. For this mean, first, you should determine the source of these leads. They could have entered your funnel from email, marketing, or SEM campaigns. Also, they might have entered from sales department efforts, events, etc. 

However, this can be tricky because calculating the number of people who entered your funnel is not easy. To know the real number, you have to collect the numbers from all of your business efforts and easily add them together. 

2. The Duration

This metric shows the amount of time a potential customer takes to become a buyer. Usually, the shorter the duration, the better the quality of your sales funnel.

You can easily calculate the sales funnel duration by subtracting the prospects’ entry time from the time they made a purchase. Also, it is a good practice to calculate the duration of each funnel stage. This way, you can understand how efficient each stage is.

3. Sales Velocity

Sales velocity shows how long it takes to make revenue. Calculating sales velocity is especially important for forecasting revenue over a specific period of time. 

You can calculate sales velocity by this formula:

Sales velocity = (number of opportunities * average deal value * win rate) / average length of the sales cycle 

sales velocity formula

4. Average Sale

Average sale is the value generated at the end of your sales funnel. This is the average amount of money customers spend. If it’s low, then maybe you need to start improving it by conducting market research or targeting people who would spend at the end of your funnel.

You can calculate average sale by this formula:

Average sale = overall income (for a specific period of time) / Sales funnel customers

average sale formula

How to Calculate Funnel Conversion Rate?

The most important metric you have to measure is the funnel conversion rate, and it shows the number of leads who convert into customers. Depending on your goal, conversion can mean a sale, subscribing to a weekly newsletter, signing up on your site, downloading an ebook, etc. Measuring funnel conversion rate helps you come up with ideas on how to improve it and increase revenue

You also have to measure micro-conversions to better understand how to improve this metric. For example, customers entering their email address on their way to purchase also counts as a conversion. So you need to track the funnel conversion rate of each stage.

Here is the funnel conversion rate formula: 

Funnel conversion rate = (number of conversions / number of leads) * 100

Take a look at this conversion funnel for a better understanding: 

funnel conversion rate calculation

What Is a Good Funnel Conversion Rate?

The average funnel conversion rate of most businesses is %3. If your conversion rate is under %2, then maybe you should start conducting funnel analysis to see where it needs improvement. A funnel conversion rate above %2 is considered good, and a rate between 3.1% to %5 is great. 


The funnel conversion is a very important part of your business. If its stages are not optimized, you will experience a decrease in your revenue. If you want to take a step forward in becoming successful, then start tracking your funnel conversion rate now to find the areas of friction. 

This article explained what a conversion funnel is, the metrics you need to measure, how to calculate funnel conversion rate, and what a good rate is. 

To make your sales funnel perfect, you need a tool to do this for you. WatchThemLive is a solution that helps you monitor leads’ interactions with your sales funnel. You can capture their interactions as they go through each stage of your funnel. This way, you will understand at what stage they drop off and why. Sign up here and snag their free plan!

Kimia Rafiee
Kimia Rafiee
Sheida is the content manager at WatchThemLive. She’s a friendly person and likes to work in a team environment. She has written many articles about marketing, customer experience, eCommerce, CRO, etc. She is a hardworking person and aims to be better than her yesterday. She’s currently working on her SEO skills.
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