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How many leads do you need to hit your sales goals?

I’m sure as a business owner and salesperson you know what your sales goals are for the year. You probably have your goals further broken down by quarter and by month.

But do you know how many leads or inquiries you need to sell that much? It often surprises me to find out that business owners haven’t calculated the leads they need in each month to hit their goals. Incoming leads or opportunities are a leading indicator that you will hit your sales goals.

Since I love crunching numbers, I’ve developed a formula for that. First you need to know a few things, and if you don’t, you’ll have to estimate for now until you collect more data.

Here are critical numbers to know:

1. Average size job
2. Close Ratio (Sales to Bid/Proposal %)
3. Qualifying Ratio (Bid/Proposal to Lead %)

Here’s an example. Let’s say your sales goal for the month is $50,000. Let’s further assume the following:

• Average size job is $5,000
• Close ratio is 45%
• Qualifying ratio is 90%

Leads needed for the month are: 25 ($50,000 divided by $5,000 divided by .45 divided by .9). So, in this example to be on track, you should be getting about 6 leads or opportunities per week.

Look at your own statistics. If you are getting the leads you calculate you need, you should be on track to hit your goals.

If you are receiving the right number of leads, but not hitting your sales goals, then something is off. Maybe your marketing isn’t reaching your best target customer, or you could be doing a better job of qualifying or closing.

If you aren’t getting the number of leads you need, then you need to change or increase your marketing efforts.

I hope this simple calculation will help you to increase your success in achieving your sales goals.