Calculating the conversion rates of a B2B funnel can be extremely complex.

It might seem counterintuitive since conversion rates should be easy to calculate - it's just a matter of dividing one transition (such as MQLs) by another (Leads).

But things get complicated very fast when you realize that in B2B, such transitions can take months, making the MQL group from our example an entirely different group from the group of leads.

Moreover, how do you calculate, for example, Lead to Opportunity conversion rate? If you have 5 leads from 1 account, that converted into 1 opportunity, is your conversion rate 20%, or 100%?

Below, we explain the problems of regular conversion rate calculations, and how InfiniGrow solves them with a unique conversion rate calculation that you can rely on.

Let's break it down.

# Cohort Conversion Rates

Let's say your lead to opportunity velocity is 3 months. When you look at this month's conversion rate between the two stages, what are you actually looking at?

There's nothing in common between this month's new leads and this month’s closed wons, other than that both transitions occurred during this month. The leads have not transitioned into the customers, and calculating the conversion rate between those leads and the customers is misleading.

**Solution: Cohort Conversion Rates**

Conversion rates help you understand how **companies** moved through your funnel.

For any conversion rate calculation, InfiniGrow will calculate the transition of one cohort from one stage {stage X} to the next {stage X+1} during a selected time period.

For example, to calculate this month's conversion rate between Leads and MQLs -

InfiniGrow will check - out of all leads **that transitioned during this month**, how many **also** transitioned into MQLs?

# Same-Object & Object-to-Object Conversion Rates

InfiniGrow calculates the percentage of prospects who transitioned both to {stage x} and {stage x+1} during a selected period.

But what if stage x counts leads, while, for example, stage x+1 counts deals?

Depending on the objects of each stage, InfiniGrow will apply a slightly different calculation, to better reflect reality:

Same-object conversion rate - Simple CR.

Object-to-object conversion rate - Account-Based CR.

Let’s dive deeper into the two calculations. We’ll use this funnel for all following examples:

*Leads - Count by people.*

*MQL - Count by people.*

*SQL - Count by people.*

*Opportunity - Count by deal.*

*Closed won - Count by deal.*

## Simple conversion rate calculation

Same-object conversion rates are used when both stages use the same object - have the same "count by". In our funnel example, this is the case in transitions between Leads→ MQL→ SQLs (people) and Opprotunity→ Close won (deal).

For same-object transitions, we want to use the simplest calculation possible. Since both stages use the same object, if a person transitioned from MQL to SQL, that would represent a 1-to-1 transition, and the same goes for a deal transition from Opportunity to Closed.

For example,

According to your funnel, this quarter:

100 Leads

60 MQLs

InfiniGrow’s Cohort (mentioned above): Out of the 100 leads, 30 transitioned into MQLs.

All other MQLs (30) are leads generated in previous timeframes who transitioned during this quarter.

**Leads→MQL CR is 30/100 = 30%.**

## Account-based conversion rate calculation

Trying to calculate object-to-object conversion rates in the same way is impossible - that’s because such transitions don’t have a 1:1 relationship.

A single account can have multiple leads that transition into a single opportunity (one deal).

How would you calculate the leads’ conversion rate?

Let’s take this example to the extreme:

You have 100 leads that convert into one opportunity.

A Simple CR calculation will result in a conversion rate of 1%.

If all 100 leads came from one company, shouldn’t the conversion rate 100%?

If you bring in another 100 new leads, how many deals do you expect to generate?

**Introducing Account-based conversion rates.**

It's common to have multiple leads and multiple deals in one account journey.

When multiple leads convert into one deal, what is the conversion rate? Can you tell if it's one lead for one deal or multiple leads for one deal?

Comparing different objects is like comparing apples and oranges.

**You cannot compare one ton and 10 pounds without first converting them into the same unit.**

Similarly, the first step in object-to-object CR is to convert both stages into a unit that they both share - Accounts.

In order to calculate conversion rates between stages of different objects, you need to convert each stage into number of accounts, then use the new account metric for the percentage calculation.

| SQLs | Opportunities |

Number of {object} | 100 | 10 |

Number of accounts | 20 | 5 |

20 ** SQL accounts** converted into 5

**= 5/20 = 25%.**

*Opportunity accounts*

Hence, if you bring 100 new SQL accounts, regardless of how many people were qualified on those accounts, 25% of these accounts should also transition to Opportunities.

In InfiniGrow**, ALL** object-to-object conversion rates are account-based conversion rates.

# Summary

To round up:

InfiniGrow automatically calculated cohort conversion rates.

For same-object transitions, InfiniGrow uses a simple conversion rate calculation.

For object-to-object conversion rates, InfiniGrow converts each stage into accounts, then calculates the

**account conversion rate**.