SaaS Conversion Rate Benchmarks To Watch Out For In 2023

For marketers and salespeople, the conversion rate is one of the most important metrics to track. After all, it’s the key to growing your business — and ensuring that all those leads you’re generating are turning into customers.

But how do you know whether or not your conversion rates are good?

It’s one thing to be able to measure how well you are doing with the different steps in turning a  lead into a customer. But it’s another thing entirely to understand if that performance is within the standards of what’s considered “good” in your industry.

That’s where SaaS conversion rate benchmarks come in.

In this article, we will talk about different conversion rates that you should track and measure, as well as SaaS conversion rate benchmarks that you can use to compare your performance.

What Is Conversion Rate?

Before anything else, though, let’s define what conversion rate is, as well as its different components.

Simply put, your SaaS conversion rate is the number of people who complete a desired action (e.g., sign up for your SaaS product) divided by the total number of people who were presented with an opportunity to do so.

So, there are different conversion rates that you can track all throughout the SaaS customer journey.

In most cases, the first conversion to ever happen is when a website visitor becomes a lead. But even leads go through a few more conversions before they finally become customers.

This can be anything from them signing up for a free trial to becoming paying customers.

Because of this, SaaS conversion rate benchmarks are usually divided into different stages. We’ll talk about them in more detail as we discuss the benchmarks for each conversion rate.

Factors That Affect SaaS Conversion Rate Benchmarks

Although there are general standards for various conversion rates you can measure throughout the SaaS sales funnel, there are also certain factors that can affect SaaS conversion rate benchmarks.

These include the following factors:

• Industry
• Marketing and Sales Channels
• Target Audience

These factors have different effects on the various conversions you can see within the SaaS customer journey. We will discuss these effects as we go along.

So let’s get to it.

1) Visitor-To-Lead Conversion Rate Benchmarks

The visitor-to-lead conversion rate is the percentage of website visitors who become leads. This is the first conversion in the SaaS sales funnel, so it’s important to optimize this rate as much as possible.

According to FirstPageSage, the general benchmark for visitor-to-lead conversion rate is 1.9%.

However, each SaaS business will have different lead generation performances based on the factors we mentioned above.

Let’s look at some of them.

Visitor-To Lead Conversion Rate Benchmarks By Industry

The industry you’re in can significantly affect your lead generation. Potential customers in one industry may have different needs and preferences than those in another industry. Not to mention the different levels of competition for each of these industries.

Here is a breakdown of the SaaS visitor-to-lead benchmarks by industry:

As you might notice, the visitor-to-lead conversion rate benchmarks are usually low when it comes to design (0.9%) and telecommunications (also 0.9%).

Reasons for this low benchmark can vary from one industry to another.

For the design industry, the low conversion rates are usually due to high levels of competition.  But for telecommunications industries, it’s usually because most companies still rely on traditional communication platforms.

Visitor-To-Lead Conversion Benchmarks By Lead Generation Channel

The thing about lead generation is that it’s not just a one-size-fits-all approach. As a SaaS business, you must use various methods to attract leads, and each of these has different levels of effectiveness.

So here are visitor-to-lead conversion rate benchmarks for each marketing and sales channel you may use:

The data above shows that organic search (2.1%) and social media (2.2%) are two of the best  methods when it comes to SaaS lead generation. This is because they are both inbound marketing strategies, which means they attract leads who are already more likely to be interested in your product.

Visitor-To-Lead Conversion Rate Benchmarks By Target Audience

The SaaS market is very diverse. And even in the business-to-business (B2B) space, you can have quite a variety of potential customers.

So it’s important to have SaaS conversion rate benchmarks that are tailored towards each type of target audience. Here is a breakdown of the visitor-to-lead SaaS conversion rate benchmarks for various types of targets audiences:

According to our data above, SaaS businesses targeting small businesses (2.3%) tend to have higher visitor-to-lead conversion rates than those targeting small to medium-sized businesses (1.4%), the middle market (1.2%), and large enterprises (0.7%).

This is mainly due to the fact that smaller businesses are more likely to be interested in SaaS solutions than larger ones, as they lack the resources needed for on-premise solutions or large custom IT infrastructure.

What’s more, enterprise SaaS businesses usually focus on the quality of their leads, not the quantity.

2) Lead-To-MQL Conversion Rate

More than just generating leads, SaaS businesses need to make sure that the leads they get are high-quality ones. Qualified leads are those that demonstrate the purchase intent to become SaaS customers.

The first conversion to a qualified lead is becoming a marketing qualified lead (MQL). An MQL is a lead that has shown deeper engagement with your marketing materials. They may have downloaded one of your eBooks or attended one of your webinars.

Now, FirstPageSage reports that the general SaaS lead-to-MQL conversion rate benchmark is 39%.

But let’s look at various standards for each factor we are considering in this article:

Lead-To-MQL Conversion Rate Benchmarks By Industry

As you might notice, the highest visitor-to-lead conversion rate benchmarks are associated with vertical B2B SaaS products. These include SaaS providers that deal with healthcare (48%), pharmaceuticals (47%), and industrial SaaS (47%).

This is usually due to low levels of competition in these industries, as well as highly targeted marketing and sales strategies.

Lead-To-MQL Conversion Rate Benchmarks By Channel

As you can see from the data above, webinars and email marketing are expected to be the two most effective channels when it comes to converting ordinary leads into SQLs. After all, both of these strategies involve deeper engagement with your SaaS business.

What’s more, organic search also tends to have high conversion rates due to content marketing and its role in lead nurturing. In-depth downloadable content such as eBooks and whitepapers can be used to generate highly-qualified leads.

Lead-To-MQL Conversion Rate Benchmarks By Target Market

It is interesting to note that SaaS businesses targeting SMBs and the middle market tend to have higher lead-to-MQL conversion rates than those targeting small businesses and large enterprises.

This could be due to SaaS businesses targeting small businesses focusing more on lead generation.

On the other hand, SaaS providers targeting SMBs and the middle market may focus more heavily on creating highly-targeted content that converts leads into MQLs.

3) MQL-To-SQL Conversion Rate

Now, let’s talk about converting your MQLs to sales qualified leads (SQLs). These are leads that have already reached out to your sales team to request a quote or a product demo.

Converting MQLs to SQLs is a matter of providing them with the right content, at the right time, in order to lead them down the funnel.

As per FirstPageSage, the SaaS MQL-to-SQL conversion rate benchmark is 38%.

But again, let’s look at specific SaaS benchmarks for each factor that affects conversions:

MQL-To-SQL Conversion Rate Benchmarks By Industry

Here, notice that insurance SaaS MQL-to-SQL conversion rate benchmarks are quite low at 28%.

This may be due to the fact that insurance companies tend to have long decision-making processes and are juggling more than one sales conversation with SaaS providers at the same time.

MQL-To-SQL Conversion Rate Benchmarks By Channel

Organic search is once again the standout here, with SaaS businesses who use content marketing and search engine optimization (SEO) to engage potential customers having the highest conversion rate at 51%.

This could be due to strategic middle of funnel (MOFU) content, such as product comparisons, buyer’s guides, white papers, and case studies.

Email marketing also comes in at a close second with SaaS providers generally converting 46% of their MQLs to SQLs. This is likely due to SaaS businesses having the ability to segment and target an audience with relevant content using this channel.

MQL-To-SQL Conversion Rate Benchmarks By Target Market

Though targeting enterprise customers usually lead to low conversion rates early on in the SaaS sales funnel, it would start to pick up at the MOFU. After all, enterprise SaaS businesses tend to focus on generating high-quality leads.

4) SQL-To-Opportunity Conversion Rate

When your sales team comes in contact with an SQL and your lead expresses their interest in purchasing a subscription to your SaaS product, then the lead becomes an opportunity.

To improve your conversion rates in this area, it’s important to make sure that your lead nurturing and sales processes are efficient and effective.

At this stage, SaaS businesses have a SaaS SQL-to-opportunity conversion rate benchmark of 42%. This is the percentage of leads that convert into actual sales opportunities.

Let’s take a look at SaaS benchmarks for each factor we are discussing today:

SQL To Opportunity Conversion Rate Benchmarks By Industry

Here, you can see that SaaS businesses in the design industry make a comeback with a relatively high SQL-to-Opportunity conversion rate of 45%.

Though earlier funnel stages have low conversions due to the competition, leads who make it far enough to talk to the sales team are likely more serious about making a purchase.

SQL To Opportunity Conversion Rate Benchmarks By Channel

At this stage of the sales funnel, organic search and email marketing still reign supreme, with SaaS businesses converting 49% and 48% of their leads respectively.

This is likely due to SaaS businesses creating educational resources that move prospects through the funnel and keep them engaged along the way.

At this stage of the sales funnel, organic search and email marketing still reign supreme, with SaaS businesses converting 49% and 48% of their leads respectively.

This is likely due to SaaS businesses creating educational resources that move prospects through the funnel and keep them engaged along the way.

SQL To Opportunity Conversion Rate Benchmarks By Target Market

When it comes to SaaS SQL-to-opportunity conversion rate benchmarks, SaaS businesses targeting SMBs to large enterprises tend to experience high conversion rates.

Generally speaking, the bigger your target audience is, the more you rely on a sales team to nurture leads and convert them into opportunities.

What’s more, SaaS businesses targeting small businesses often have shorter sales cycles as they are not required to go through a complex purchasing process.

5) Opportunity-To-Close Conversion Rate

The last conversion rate you can track within the SaaS sales funnel is the opportunity-to-close conversion rate. This metric reflects how well your SaaS sales team is doing at closing deals and generating revenue for your business.

The SaaS opportunity-to-close conversion rate benchmark is 37%. Let’s look at the different specific benchmarks for each factor we are discussing today:

Opportunity-To-Close Conversion Rate Benchmarks By Industry

Closing the deal is usually the most difficult and time-consuming part of the SaaS sales process, especially for B2B leads in various industries, such as finance, insurance, and healthcare.

Companies in these industries tend to have long decision-making processes and may require multiple touchpoints to close the deal. SaaS businesses targeting these industries should be prepared with a comprehensive sales strategy and efficient lead nurturing process.

Opportunity-To-Close Conversion Rate Benchmarks By Channel

When it comes to closing the deal, email and webinars tend to do the job as these are the channels where you have your target audience’s exclusive attention.

These platforms are also where you can showcase your SaaS product’s features, highlight success stories, and give prospects the chance to ask questions.

Opportunity-To-Close Conversion Rate Benchmarks By Target Market

While SaaS businesses targeting small businesses have higher opportunity-to-close conversion rates compared to the other target markets, SaaS companies targeting large enterprises tend to struggle in this department.

This could be because larger enterprises usually have complex decision-making processes and often require multiple stakeholders involved in the purchase decisions.

SaaS businesses targeting large enterprises should have a comprehensive sales strategy to make sure that all their leads are nurtured and closed successfully.

6) Freemium Conversion Rate

Remember that the five previous conversion rates we’ve just talked about are the SaaS sales funnel conversion rates. However, there are also other types of conversion rates that SaaS businesses aim to improve.

One of these is the SaaS freemium conversion rate — IF you’re using a freemium marketing strategy.

The freemium conversion rate is the percentage of freemium users that convert into paying SaaS customers.

According to Toplyne, the ideal freemium conversion rate is around the 2% to 5% range. 

7) Free Trial Conversion Rate

Another SaaS conversion rate that’s worth mentioning is the free trial conversion rate. This metric demonstrates how well your SaaS business is at converting users that sign up for a free trial of your SaaS product into paying customers.

Now, there are several factors that may affect how well your free trial strategy is winning new customers for your SaaS business.

But mainly, conversion rates vary based on whether or not you require credit card information upon signing up.

Let’s talk about conversion rate benchmarks for these two free trial methods:

Free Trial Conversion Rate Benchmark (With Credit Card Details)

Whether or not it’s a good idea to require credit card details during the free trial signup process is a matter of debate. However, each method has its own pros and cons.

If you require payment information, it may be more difficult to get people to sign up. Some potential customers might get intimidated by the requirement for credit card details, and may not continue.

However, it can also be a great way to filter out users that have no intention of ever becoming paying customers. By requiring credit card information upon signing up, you can make sure that those who do sign up are genuinely interested in your SaaS product.

What’s more, already having your free trial users’ payment information in your system will help them seamlessly transition into becoming paying SaaS customers when the trial is over.

According to Lincoln Murphy of Sixteen Ventures, the free trial conversion rate benchmark for cases like these is at 25%.

Free Trial Conversion Rate Benchmark (Without Credit Card Details)

On the other hand, SaaS businesses can also offer a free trial without requiring payment information.

This is a great strategy if you’re gunning for product-led growth. Not requiring payment information may make it easier for customers to sign up because there is no perceived barrier to entry (no need for them to input their credit card details).

And that gives your SaaS product plenty of opportunity to sell itself by providing value to your free trial users.

However, the downside of this method of providing a free trial is that you won’t filter out the users who have no intention of ever paying for your SaaS product.

And in contrast to the previous method we mentioned, the paywall will also make it harder to sign up for a paid plan when the free trial is over.

As a result, SaaS businesses that offer free trials without requiring credit card details usually have a lower conversion rate of around 8% to 10%.

Final Thoughts About SaaS Conversion Rate Benchmarks

Tracking your conversion rates is a great way to measure the success of your SaaS business.

Conversion rates give you an idea of how well you’re doing in each stage of the SaaS sales funnel and are key indicators that you can use to optimize your customer acquisition strategies for better results.

But more than just tracking your conversion rates and other key performance indicators (KPIs),  you should also strive to reach and eventually exceed the industry benchmarks for those metrics.

That’s how you will know that you have a SaaS business that competes with the best.

SaaS conversion rate benchmarks are a good place to start. But bear in mind that there are many other factors to consider when optimizing your SaaS strategies.

Looking for more guides to help take your SaaS business to the next level? Check out our blog site here.