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.

When answering this question, there are two considerations.  Expenses are your first consideration.  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).  If you are successful at lead conversion, you will see a significant improvement to your bottom line. 

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. Let’s use $100,000 as the figure for our purposes.

The next step is to work out what your conversion rates are. Let’s suppose that all of your leads are generated through you website in order to keep this example simple. 

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

This is the calculation you can use to determine how many visitors you will need to your website to meet your income goals.  Let’s assume every conversion will actually purchase from you in order to keep it easy.

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

Therefore, if you have a $20 average sales price, a conversion rate of .25%, and you want to achieve sales of $100,000, your calculation would look like:

($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!  Not to worry, there are things that can be adjusted.  The average price can increase. You can change your visitation, or you can change your conversion rate.

Most find the easiest fix is to improve 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.

Look at how that will affect the calculation:

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

That’s a nice change! 

By increasing your average sales price to $47, you can improve your results even more:

($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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