YOUR Magic Number in Lead Generation

 
Jul 6, 2016 4:38:00 PM

How Many Leads Do You Really Need?

When it comes to generating leads for your company, knowledge is one of the most important advantages you can have over your competitors. The same goes for understanding just how many leads you need in order to achieve the results you want. For instance, if you set a goal of $10,000,000 in new sales and your average price per sale is $100,000, then you’ll need to know how many leads you need to source, qualify, pursue and close to reach your goal.

This information can play a big role in determining where the line rests between quantity and quality. So, in order to assist you with finding the right number for your needs, we present this easy-to-use infographic:

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Filling Up the Sales Funnel

Step 1: How many clients do you need to hit your revenue goal?

Annual Revenue Goal Divided by Average Selling Price. 

First, you must establish your Annual Revenue Goal and divide that by your Average Selling Price (ASP). In our example above, we assume that you want to generate $10,000,000 in new revenue for the year with an ASP of $100,000. By dividing the Revenue Goal by the ASP, we now know we need 100 new clients to reach our revenue objective of $10,000,000.

Step 2: How many opportunities should sales pursue?

Number of New Clients (from Step 1) Divided by Average Sales-Qualified-Leads Conversion Rate. 

Going one step up the funnel, we need to figure out how many Opportunities it takes to create one new client. For this example, let’s use an SQL-to-client conversion rate of 25% to calculate how many SQLs are necessary to create the 100 new clients that we needed.

By dividing the number of new customers (100) by the SQL conversion rate (25%), we discovered that we need 400 Sales-Qualified-Leads to create 100 new clients.

Step 3: How many Sales-Accepted-Leads do you need create?

Number of SQL (from Step 2) Divided by Average Sales-Accepted-Leads (SAL) Conversion Rate. 

For this example, let us assume that 50% of Sales-Accepted-Leads (SAL) become Sales-Qualified-Leads (SQL). By dividing the number of our target SQL (400) by the Average SAL Conversion Rate (50%), we can see that we need more than 800 Sales-Accepted-Leads to create our desired 400 Sales-Qualified-Leads.

Step 4: How many Marketing-Qualified-Leads must be sourced?

Number of SAL (from Step 3) Divided by Average Marketing-Qualified-Leads Conversion Rate.

Moving up to the top of the sales funnel, let us assume that only 10% of the Marketing-Qualified-Leads are converted to Sales-Accepted-Leads. With this in hand, we now know that we will need more than 8,000 MQLs to create our desired 800 SALs. This will give the marketing team a clear goal of sourcing no less than 667 Marketing-Qualified-Leads (MQLs) every month to achieve the previously determined Annual Revenue Goal.

Using the Insight to Build Competitive Advantage

By simply identifying a strong reference point for both your sales and marketing teams to embrace, you’re allowing them to better understand each other’s goals and aspirations. It enables marketing to focus on the ideal strategy mix to meet the company’s goals; while allowing the sales team to know what they can expect from the marketing department, thus better calibrating their practices and efforts to achieve success.

Clear expectations can make all the difference when it comes to your bottom line. Especially, when you’re dealing with two highly coveted teams such as these. But, with a few simple calculations, you can better navigate your business path and push everyone to strive toward a common, tangible goal. By doing that, you position yourself and your business for sustainable growth and powerful results.

Here at Puma Creative, we offer a wealth of services to our clients to ensure they’re poised for success at every level. And we believe expert knowledge is one of the most important advantages we have to offer. So, in order to further assist in this important calculation process, we encourage you to download our free spreadsheet template to find the number that’s right for your business needs.

Free Lead Calculator Spreadsheet

Topics: Lead Generation, sales and marketing, marketing strategies