Learn How To Make Money Online

How many leads do you need to make the amount of money you want to have in a 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.  The first is your costs.  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. 

The second factor is your ability to convert leads to 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 thing you will do is to work out what sales level you want to achieve each month. Let’s use $100,000 as the figure for our purposes.

The next step is to work out what your conversion rates are. Let’s suppose that all of your leads are generated through you website in order to keep this example simple. 

Now, let’s say that for every 1000 visitors, you “convert” 2.5 into sales leads. Your conversion rate is .25%.

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.

Ouch!  That’s a lot of visitors!  Now, there are a few things you can do to change things.  You can change your price. Or, you can increase your visitors or the conversion rate.

For most people, the best place to start is conversion rate. It is very possible to increase to ablut 2% from an original .25% rate.

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.

I could live with that change! 

If you want to decrease the number of visitors you need even more, try increasing average sales to $47:

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

Today, it’s all about working smarter, not 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.

Tags: conversion rates, Internet Marketing, lead conversion, leads, market research, marketing, profit, small business online accounting program, web based accounting