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. 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 next factor to take into consideration is how successful you are at converting sales from your leads (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 purposes, let’s use $100,000 as your monthly sales goal.
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.
Assume that you are able to convert 2.5 visitors into sales for every 1000 visitors to your website. Your conversion rate is .25%.
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
So, if you want $100,000 in sales and your average sale price is $20, with a conversion rate of .25%, the formula would look like this:
($100,000 / $20 / .25) X 100 = 2,000,000 visitors needed per month to achieve your sales goal.
Ouch! That’s a bunch of visitors! Not to worry, there are things that can be adjusted. You can increase the average sales price. Your can improve your conversion rate or you can multiply visitors.
Many begin by increasing the conversion rate. It is very possible to increase to ablut 2% from an original .25% rate.
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!
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.
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