Do you know the number of leads you need to generate to reach your income goals? This may seem like a simple question, but I haven’t found a lot of folks that have the answer.

There are two things to consider regarding this question.  The first is your costs.  You should make sure to have an online accounting program advanced enough to help you analyze your costs and how they relate to your profitability. 

The next factor to take into consideration is how successful you are at converting sales from your leads (conversion rate).  The better you can convert your leads, the more profitability you are capable of achieving. 

Let’s take a look at the process more closely:

The first thing you will do is to work out what sales level you want to achieve each month. For our purposes, let’s use $100,000 as your monthly sales goal.

Now you need to figure out your conversion rate. While this process can be used for any type of prospecting, for this example, let’s keep it simple and assume the only way you get leads and sales is through your website. 

Now, let’s say that for every 1000 visitors, you “convert” 2.5 into sales leads. That’s a .25% conversion rate.

Here is a formula to calculate the number of visitors your would need to meet your monthly sales goals.  To keep it easy, suppose that each conversion will ultimately result in a sale.

(Desired Sales / Sale Price / Conversion Rate) X 100

The formula would look like this, if you want to achieve $100,000 a month in sales, you have a conversion rate of .25% and your average sales price is $20:

($100,000 / $20 / .25) X 100 = 2,000,000 visitors needed per month to achieve your sales goal.

Wow!  That is a lot of visitation!  Luckily, there are a few adjustments you can make.  The average price can increase. Your can improve your conversion rate or you can multiply visitors.

For most people, the best place to start is conversion rate. If you test a bit, it’s actually quite easy to bring a .25% conversion rate into the 1.5% or even 2% range.

Let’s look at the difference that would make using the formula:

($100,000 / $20 / 2) X 100 = 250,000 visitors per month to achieve your sales goal.

That’s a nice change! 

If you want to decrease the number of visitors you need even more, try increasing average sales to $47:

($100,000 / $47 / 2) X 100 = 106,383 visitors per month to achieve your sales goal. 

Today, it’s all about working smarter, not harder.  Hopefully these examples drive home the importance of planning the leads you will need to reach your sales goals, and testing the factors you can change to become more efficient. 

Get more small business success strategies and claim your free white paper: “7 Ways Your Stone-Age Accounting System is Stealing Money From You Every Day … And, How to Get it Back This Year”  to learn about an online accounting program that makes it simple to track your conversion rates.

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