Posted on June 15, 2021 | Category SMB Marketing | Length
How many Leads do you need to grow your business by $100,000?
Here are three questions that may help you figure that out.
1: Are You Tracking Your Lead Conversions?
When people contact your business are you asking how they found you? How many of these people are becoming your customer? With this information you can divide the number of new customers by the number of leads to get your conversion rate.If you don’t know these numbers, put systems in place right now to find and record the info for the next 30 days.
2: Do You Know Your Customer Lifetime Value or CLV?
The Customer Lifetime Value is the amount you’ll make from one customer over a period of time. For example: If your average transaction for your service is $100 per month. And you retain customers for an average of 3 years then your CLV is $3600.
3: Do You Know The Value of a Lead for Your Business?
It’s easy to see that customers have value. But leads have value too! Let’s say that 2.5% of your leads convert to customers. This means that it takes about 42 leads to generate 1 customer. When we divide the CLV of $3600 by the 42 leads we find that each lead is worth $85.
So, what’s next?
Continuing to use our examples and doing some quick math we see that you’ll need 1176 leads at $85 per lead to grow your business by $100,000. That boils down to 30 new customers.
With this information you can now calculate the number of leads you’ll need to grow your business by $100,000.