Within Growblocks we use a time boxed approach to calculating all processing metrics: conversion rates and ACV.
Within any period shown we calculate the total number of a volume metric divided by the total number of the preceding funnel step in the same period. See the simple example with Meetings Booked and Meetings Held:
The pros and cons
➕ A time-boxed approach can be calculated straight away and gives a good indication of performance on an ongoing basis.
The alternate method which is often used is cohort-based conversions - this relies on all Meetings Booked (in the above example) in January to have either converted or closed to be able to calculate the conversation rate of the January cohort of leads. In some companies, with long sales cycles, this could mean a wait of several months or even a year before the performance of the January cohort could be measured.
− The downside to the Time Boxed approach is that calculating on a month-by-month basis becomes quite prone to fluctuations in volume if you have long sales cycles.
Let’s say in January instead of 10 meetings held you have 100 as the Sales team has been working hard to convert all of December’s booked meetings. In this case, you would see a conversion rate of 100%, overstating the actual performance.
💡 However, to mitigate the fluctuations, Growblocks can operate with shorter or longer rolling windows to increase the data set used for the calculating the processing metrics.