What is the number of leads you will need to earn the income you want this year? As simple as this question might be, I’ve found very few people actually have this number in the top of their minds.

There are two factors to take into consideration.  First, there are your expenses.  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 second factor is your ability to convert leads to sales (conversion rate).  The more efficient you are at converting leads, the more income you will be able to make. 

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

The first step is to determine your monthly sales goal. For our example, let’s say you want to make $100,000 in sales a month.

Next, you need to calculate your current conversion rates. Let’s suppose that all of your leads are generated through you website in order to keep this example simple. 

Suppose you convert 2 and a half out of 1000 visitors into paying customers. That’s a .25% conversion rate.

Use this formula to figure out how many visitors you would need to your website to acquire enough leads to get the sales you want.  To keep this example simple, we will assume every “conversion” described above will ultimately purchase from you.

(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.

Yikes!  That is a lot of visitation!  Luckily, there are a few adjustments you can make.  You can change your price. Your can improve your conversion rate or you can multiply visitors.

For most people, the best place to start is conversion rate. It is very possible to increase to ablut 2% from an original .25% rate.

Take a look at the difference that makes to the number of visitors you need to achieve your goals:

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

What a difference! 

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.

What is the number of leads you will need to earn the income you want this year? While this may seem like an easy question, not a lot of people can come up with the number.

There are two factors to take into consideration.  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 second factor is your ability to convert leads to sales (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:

First you need to settle on a sales goal for each month. For our example, let’s say you want to make $100,000 in sales a month.

Now you need to figure out your conversion rate. In order to keep this example easy, suppose that all of your leads come from your website. 

Assume that you are able to convert 2.5 visitors into sales for every 1000 visitors to your website. You have a .25% conversion rate.

Here is a formula to calculate the number of visitors your would need to meet your monthly sales 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

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.

Ouch!  That’s a lot of visitors!  Luckily, there are a few adjustments you can make.  You can increase the average sales price. You can change your visitation, or you can change your conversion rate.

Many begin by increasing the conversion rate. By testing various options and changes, it is possible to improve a .25% conversion to about 2%.

Look at how that will affect the calculation:

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

I could live with that change! 

You can improve things even more by raising your average sale to $47:

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

If you are like most, you would rather make smart changes to improve your sales success rather than work 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.