Leads, leads, leads…. This is what both your marketing and sales department working round the clock to keep your business afloat. The truth is the quest for quality leads never ends and more so in B2B sales. Here leads are just like fuel and you need a continuous supply of fuel to keep your car running.
If you are running a business, you need to analyze how many leads you need minimum or approx to generate to achieve the sales revenue target. Knowing the numbers will help you to distribute your resources, organize your team, and plan the roadmap accordingly.
It often happens in an organization where the marketing department believes they are attracting plenty of leads that will be sufficient. But the sales team thinks it is not sufficient and more lead generation is required. You need to have both the departments on the same page if you want to know how many lead numbers you need to make a sales figure that is predetermined by the company.
Leads-Where Did They Come From?
All sales start online. Consumers these days research online about the product or service they wish to purchase before contacting the company. Your website is the most likely place where your leads visit to browse the products and services you are offering.
This is why your website must have a clear Call to Action(CTA). Furthermore, when measuring website lead generation ability, you calculate the ability of your online presence to nurture leads.
To work out your monthly lead target, your company will require seven pieces of data which are the following:
- Monthly revenue target — your monthly sales goal from all revenue sources
- Marketing driven revenue — It is the portion of the total monthly revenue that marketing is responsible for, not counting cross-sales, up-sales, and revenue that comes in.
- Average sales price (ASP) — the average revenue contribution from each new sale
- Number of marketing-driven deals — this is the marketing-driven revenue divided by the ASP
- Opportunity-to-sale ratio — the percentage of pipeline opportunities that you close
- Qualified lead-to-opportunity ratio — how many qualified leads it takes to produce one opportunity
- Inquiry-to-qualified-lead ratio — how many inquiries it takes to produce a qualified lead
Calculating How Many Leads It Takes To Make A Sale
How do you calculate your leads?
It all starts with your freezing on your Monthly revenue targets. Say you want to close this month with 2,00,000 USD. The average sale price for your product is 200 USD. Therefore the number of customers that you would need to achieve your revenue is :
Total Monthly Revenue Goal
— — — — — — — — — — — — — — =1000 clients
Average Sales price
You need to sell to 1000 clients to achieve your Monthly Revenue but this 1000 is not your lead number. Leads to customer conversion takes a lot of time and efforts. Most times, leads result in no- shows, some take a longer time to decide and eventually only a few become buyers. There are many online resources that will help your sales team to determine how many qualified sales leads/prospects they need to make a sale. While some of these resources are free to use, while some are paid. Therefore, you must evaluate every tool and the degree of usefulness it carries and whether it is worth your investment or not. Such elaborate sales-lead calculators are designed to provide a large amount of data based on the information provided by your business.
It includes data such as new customer data, qualified leads, and total inquiries, and so on. NeoDove is also a great tool to help your sales team to have 360-degree lead management.
Moreover, NeoDove offers an easy interface that allows automated integration of leads and assists your sales team in automated leads collection process and saves your time of manually managing your leads.
There is no exact equation to determine how many lead qualifications you need to achieve your revenue goal. However, there are two important numbers you and your sales team need to get their hands on while determining lead numbers.
They are the following:
- Website Traffic Counts: Most of the organizations use Google Analytics for measuring website traffic. Furthermore, the information you want to find and use is the All Traffic number.
- Leads: This number is determined by the number of people who provide you with a way to engage with them.
The simplified version to calculate your sales leads to close ratio is the following-
- First, you need to select a given period, let’s say in months. Make sure you decide for a longer duration.
- The next step for your sales team is to calculate the number of leads and closed sales during this selected duration in step one.
- Divide the number of leads by the number of closed sales.
- The answer obtained needs to be turned into a percentage out of one hundred to estimate just how many leads your business will need to make and close the sales.
Example: Your business generated 400 leads last month. It resulted in 27 sales. Now you divide the sales you made by the leads generated. Further, the number obtained is then multiplied by 100. The answer comes to 6.75%. This tells you that your lead conversion rate is 6.75%
Top Tips For Closing More Sales
- Know When To Quit:
All leads are not created equal. Once you have identified that your lead is not interested or seems promised to move ahead without your offering, you need to turn him lost.
Do not waste your time over a lead who is not further interested in your offerings. Rather save up that time and invest it in another qualified lead who is interested and is likely to purchase your offerings. Work smart, and not hard.
2. Having Patience:
The sales cycle is an exercise of being patient. A good and experienced salesperson understands the importance of being patient while dealing with potential leads over a long period because he is most likely to purchase your offerings.
This way, they are successfully striking the balance between prospecting and selling which is important to get more sales leads and close the sales. Sometimes longer time spent with a particular prospect leads to him buying your offerings in bulk.
3. Have A Prepared Sales Mindset:
Be prepared with a sales presentation in your head. Understand what a prospect needs to know when telling him about your offerings. Identify the information for your leads that will play a crucial role for them to purchase your offerings. Therefore, having a sales mindset helps increase the chances of bringing in more committed leads into the business.
4. Qualifying your leads/prospects:
The sales cycle in its truest form can be long and tiring at times. Getting to a customer saying “yes” often can take a considerable amount of time. If you’re a good salesperson, you will be okay with that and willing to wait, so long as your lead/prospect is truly a qualified potential buyer for your products/services. Although “qualified” can refer to money, it can also include such things as need or want.