Opportunity Conversion Duration

Opportunity Conversion Duration is a KPI that measures time taken for each opportunity that was won during a specific time period. In a typical sales cycle, ratio of sales pursuits that end in favorable note for the organization Opportunity_Funnelis a small number. Here, Opportunity Conversion Rate shows the quantum of sales deals that were won during a time period. Due to this nature of, the choice of visualization is a funnel chart for sales pipeline related metrics.

In order to arrive at the time taken for those sales opportunities that were Opprotunity_Stage_Dateswon during a specific time period, one has to check and the time period during which the opportunity was actually won. In the example above, Opportunity A was closed in Q2 2016 even though the pursuit started in Q1 2016.

So, we can define Opportunity Conversion Duration as the average length of the time taken across all opportunities that were won during a specific time period irrespective of the start date of each individual opportunities.

The following steps gives an overview to derive this KPI

  1. Get all opportunities that were won during the time time period (e.g. Q2 2016)
  2. Calculate the time taken from Lead stage to Signoff stage for each opportunity (e.g. Opp A 120 days, Opp B 45 days, Opp C 71 days)
  3. Derive the average of the value for values in #2 (e.g. 78 days)
Average number of days taken to win during Q2 2016 is 78 days i.e. Opportunity Conversion Duration for Q2 2016 is 78 days.

Both KPI’s related to opportunity conversion i.e. Rate & Duration are reported together and due to nature of calculating these KPI’s, especially time context it is hard to draw trends (i.e. showing monthly conversion rates for last 12 months).  A sample visualization will look similar to the table below

Opportunity Conversions for Q2-2016
Rate 11%
Average duration for conversion 71 days

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