Do you stress each month about your team meeting its sales goals? Are you confident that the targets you’ve set are the most rational based on past performance and future company goals? Or, do you just periodically raise your numbers by a set percent?
The five steps below will help you calculate the number of leads you need to meet your goals next month. The steps are simple to implement based on a few metrics you probably already have in place. Best of all, consistently using this process and reviewing and tracking progress will help your predictions become more accurate with time.
Working backwards from your existing data is the best way to get an accurate picture of where you need to be. Here are the steps to take:
1. Determine Your Team’s Revenue Goal
Input: Next Month’s Sales Revenue Target
Check with the Sales team to find out their monthly revenue targets and what percentage they predict should be coming from inbound marketing. If Sales has a revenue target next month of $150,000 and they predict that 70% of overall sales should come from your department, then your team will need to contribute $105,000 next month (150,000 * 0.70).
Monthly Sales Revenue Target * Percentage of Sales Allocated to Inbound Marketing
Output: Monthly Inbound Revenue Goal
2. Find out How Many Customers You’ll Need
Input: Average per-Customer Revenue, Monthly Inbound Revenue Goal (Step 1)
You can use your company’s statistics on the average revenue generated per customer to come up with a monthly customer goal. Simply divide the inbound revenue goal from Step 1 by this per-Customer figure. So if your average customer generates $7,000, you’ll need 15 customers to reach your Inbound Revenue Goal (105,000 / 7,000).
Monthly Inbound Revenue Goal / Average per-Customer Revenue
Output: Needed Customers per Month
3. Calculate Your Required Leads Number
Input: Needed Customers per Month (Step 2), Lead Conversion Rate
You can predict how many leads your team will need to generate next month based on the percentage of your leads that convert to customers. If your lead conversion rate is 2 percent and you need 15 customers (Step 2), you’ll need 750 leads on average to reach your target (15 / 0.02)
Needed Customers per Month / Lead Conversion Rate
Output: Required Leads Number
4. Adjust Based on Past Statistics (Optional)
Whether you choose to stick with your Step 3 calculations or adjust your figures based on past performance is up to you. Some managers believe in adjusting numbers to avoid damaging employee morale if the team hasn’t hit its leads number from last month. This is a valid strategy sometimes. Just don’t use adjustments to provide a false sense of security or mask an ongoing problem.
5. Create a Waterfall Graph
Chart your targeted leads number (Step 3) on a graph that gets updated daily, so everyone on the team can track overall progress throughout the month. Hubspot provides a reporting tool that makes this simple, or you can use this guide to creating a daily leads waterfall graph.
These simple but powerful steps can help your team develop accurate projections that take the guesswork out of measuring and meeting targets. By this time next month you could be feeling more relaxed and in control of your sales goals.