Do you know the number of leads you need to generate to reach your income goals? 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 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:

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.

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. 

Suppose you convert 2 and a half out of 1000 visitors into paying customers. 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.  To keep it easy, suppose that each conversion will ultimately result in a sale.

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

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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!  Not to worry, there are things that can be adjusted.  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. 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.

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. 

Everyone would rather work smarter than 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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