Posts tagged profit
How to Track Your Leads to Increase Your Sales Success
Apr 17th
Most sales training books and courses spend a lot of time on closing the sale, but very little time is spent on discussing the leads that, well, lead to those sales. The sales process begins with generating leads, so it is important to understand as much as you can about them in order for your business to be as profitable as possible.
Can you count the number of leads you received over the past 30 days? The quality leads that are the most probable to end up in a sale are usually easy for people to name, but a great deal of other probably leads are actually lost each month.
Why does it matter? Because a company spends so much time and money to get leads, the more you know about them, the more profitable the business will become. And, if you can use your newly found information to either reduce the cost of your marketing or the time that you spend, wouldn’t that be worth it?
Your first action plan is to create a way to track key information about the ways that you generate your leads. Below are some questions to ask to get started:
1. Where do you first generate your leads from? A “pre-lead” is really just a prospect, for example a website visitor or someone you shake hands with at a meet-up group. Identify your main sources for gathering prospects, such as the Internet, trade shows, networking events, or direct advertising.
2. Then, answer the question, what specific sources do you get your actual leads from? Pay per click advertising, a specific trade show, someone else’s website, or organic online searches are all examples of a specific source for your leads.
3. How would you rank the quality value of each of those leads from your source and specific source? An effective way to come up with this is to assign a percent value to every lead a source provides. For example, 10% for a suspect (not even really a lead yet); 25% for someone who is actually interested and you’re talking more; 50% if you’ve issued a proposal and 100% if you closed the sale.
Once you know where your best leads originate, you will find you are able to spend your marketing dollars and your time much more efficiently.
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 leads and conversion rates.
How Tracking Conversion Rates Can Help You Meet Your Sales Goals
Mar 22nd
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. The first is your costs. 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.
Second, you need to know how well you are able to turn your prospects into sales (conversion rate). If you are successful at lead conversion, you will see a significant improvement to your bottom line.
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. In order to keep this example easy, suppose that all of your leads come from your website.
Suppose you convert 2 and a half out of 1000 visitors into paying customers. Your conversion rate is .25%.
This is the calculation you can use to determine how many visitors you will need to your website to meet your income 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.
Yikes! That’s a lot of visitors! Luckily, there are a few adjustments you can make. The average price can increase. You can change your visitation, or you can change your conversion rate.
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.
Look at how that will affect the calculation:
($100,000 / $20 / 2) X 100 = 250,000 visitors per month to achieve your sales goal.
That’s a nice change!
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.
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.
