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 things to consider regarding this question.  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:

The first thing you will do is to work out what sales level you want to achieve 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.  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.

Ouch!  That’s a lot of visitors!  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.

Many begin by increasing the 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.

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.

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. 

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.