Affiliate Reviews Blog

What is the number of leads you will need to earn the income you want this year? 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.  First, there are your expenses.  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. Let’s use $100,000 as the figure for our purposes.

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. 

Suppose you convert 2 and a half out of 1000 visitors into paying customers. You have a .25% conversion rate.

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 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.

Yikes!  That’s a lot of visitors!  Luckily, there are a few adjustments you can make.  You can increase the average sales price. Or, you can increase your visitors or the conversion rate.

Many begin by increasing the conversion rate. By testing various options and changes, it is possible to improve a .25% conversion to about 2%.

Let’s look at the difference that would make using the formula:

($100,000 / $20 / 2) X 100 = 250,000 visitors per month to achieve your sales goal.

That’s a nice change! 

You can improve things even more by raising your average sale to $47:

($100,000 / $47 / 2) X 100 = 106,383 visitors per month to achieve your sales goal. 

Everyone would rather work smarter than 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.