How to Calculate Your Lead Generation Goals

Lead generation – attracting potential customers - is a vital aspect of every business’s marketing efforts. 91% of marketers claim that lead generation is the most important goal for every business.  

The process plays a critical role in meeting your company’s revenue and growth objectives. To ensure the success of lead generation, you must have clear and well-defined lead generation goals.

Clear lead generation goals provide motivation, direction, and a means to evaluate your strategies. These goals give you specific criteria for success which shape your lead generation strategy.

However, it is seen that many businesses fail to quantify their lead generation objectives and plan their efforts accordingly. This is where a lead generation goal calculator comes in. Let’s find out more about it in the following segments.

What are Lead Generation Goals?

Lead generation goals signify the total number of new prospects that your marketing team should generate in a given time.

These goals are based on the supposition that marketing professionals have all the necessary lead generation tools, resources, and strategies to realize them.

When it comes to lead generation goal setting, accuracy is key. It is vital to create realistic goals with numbers that are reachable and the expected results are aligned with your company’s growth strategy. You must enhance benchmarks to obtain precise numbers.

Moving on, lead generation goals should be SMART, i.e., specific, measurable, achievable, relevant, and time-based. This will ensure that your lead generation efforts are laser-focused and accessible. One may opt for lead-generation forms which maximize results and enhance user experience.

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Let’s quickly walk you through setting SMART lead generation objectives:

·         Specific: It is important to define your lead generation goal clearly. Avoid using vague phrases such as ‘increase leads’ and replace them with clearly defined numbers. This allows the marketing teams to stay focused on a definite target.

·         Measurable: Establish key performance indicators (KPIs) to measure the efficacy and progress of your lead generation efforts. With clear metrics and KPIs, evaluating the performance accurately becomes easy.  You can track metrics such as cost per lead or lead conversion rate to evaluate the effectiveness of your campaigns.

·         Achievable: Setting achievable goals that align with your team’s capabilities and resources is key. Having ambitious goals is important as it pushes your team to perform better. But at the same time, having impractical goals can leave them lost and demotivated. Aim to strike a balance that drives them but remains achievable as well.

·         Relevant: Your lead generation goals must align with your overall business objectives. They should contribute to your company’s success. For example, if your company’s objective is to enter a new market segment, your lead generation goals should also include acquiring new leads from that particular segment.

·         Time-based: Set a defined timeline for achieving each lead generation goal. This helps to prioritize your team’s efforts and resources. It also enables efficient tracking. 

Here are some effective examples of SMART lead generation goals:

·         Increase the conversion rate of leads by 20%

·         Generate 200 new leads every month

·         Reduce the cost per lead by 18%

·         Schedule 25 discovery calls with new leads each month

How do you calculate the leads you need to generate?

Wondering about the lead generation formula? Well, calculating the number of leads you need to generate isn’t as complex as one may think.

The key is to start the work from the end. Identify the revenue that your company must generate and then make some simple calculations to reach your ultimate lead generation goal. Let’s understand how.

1.  Identify your company’s anticipated revenue

Get in touch with your sales team to find out the anticipated revenue. Also, determine the amount that is expected to come from inbound marketing.

For example, let’s say your sales team expects to generate a revenue of $200,000. Out of this, 75% is expected to come from inbound marketing.

So, 75% of $200,000 equals $150,000. In other words, $150,000 is the inbound marketing revenue. Several businesses are using an AI chatbot to easily track and analyze the contribution of inbound marketing to their overall revenue target.

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2.  Determine the number of customers needed to realize this goal

The next step is to determine the exact number of customers that can help you to reach the revenue goal.

This is pretty simple. All you need to do is divide the inbound marketing revenue amount (generated in the previous step) by the average revenue generated by each customer.

For example, let’s say the revenue sales per customer is $15,000. Now, to obtain the total number of customers required, you need to:

$150,000 / $15,000 = 10 customers

This means you need a total of 10 paying customers each month to reach your inbound marketing revenue goal.

3.  Determine the number of leads it may take to onboard these many customers

For this step, you need another significant piece of information – the lead conversion rate. It refers to the percentage of leads that turn into paying customers.

The lead conversion rate is calculated using the following formula:

Number of leads / Total number of visitors x 100%

Several businesses use specific lead conversion rate calculator tools to obtain an accurate number.

However, if any business does not have adequate data for a lead conversion calculator, it can simply set an ‘optimal rate.’ But remember to have a realistic number in mind. Projecting your lead conversion rate as 50% is highly idealistic.

Now, let’s say your lead conversion rate is 5%. Next, you need to divide the total number of customers (generated in the previous step) by the lead conversion rate.

Going by the above example, the equation will look like this:

10 customers / 0.05 conversion rate = 200 leads

This is the final number, i.e., the number of leads you need to generate each month.

4.  Monitor your progress

The importance of closely monitoring the results of your lead generation activities cannot be overstated. Constant monitoring will help you differentiate the activities that are performing well from those that need to be improved.

You can also use marketing automation tools to create visualizations of your lead-generation activities. This can help you compare your results with the previous months and closely track your progress.

How to Use a Lead Goal Calculator?

A lead goal calculator simplifies the process of determining the total number of leads that should come from your inbound marketing strategy. It provides an accurate number of leads that will help you reach your sales target each month.

A lead generation goal calculator is an effective marketing tool that lets you calculate the following:

·         Total number of leads required to hit your sales target

·         Lead-to-prospect and prospect-to-customer conversion rates

·         The average transaction value of each lead

·         Estimation of cost per lead based on your total budget

·         Return on Investment for your lead generation campaign

Moving on, let’s look at the detailed steps of using a lead generation calculator.

Step 1: Collaborate with your sales team to identify your revenue target for each month. Use a spreadsheet like the one shown above to input your sales target per region per month. Centralizing all the information will ensure accurate results. Don’t forget to update the spreadsheet if you adjust your revenue goals at any point.

Step 2: Once you have a revenue number, you need to find out the number of deals you must close to hit the target. For this, you can use your marketing software to determine the average revenue generated by each customer per region. Next, sum up the average sale value on top of each region’s individual row. The lead generation goal calculator will automatically provide the value of your leads based on the percentage close rates you input in the spreadsheet in step 1.

Step 3: The next step is to define the revenue split. This means determining the portion of revenue that comes from sales and the portion that comes from marketing. This depends on the way your business attracts customers –via inbound or outbound strategies.

Step 4: This step involves evaluating your sales closing rates, i.e., the percentage of leads that turn into paying customers. Extract the data of the past six months from all marketing channels that you use to generate leads. Assess the information to have an accurate sales closing rate.

Step 5: The last step of using the calculator is to verify all the numbers that you have input in the previous steps. As you add data, the calculator automatically updates the total revenue for each customer and region. It adds all the numbers to give you an accurate monthly goal. This number generated by the calculator should match the potential revenue generated by each region per month.

This is the basic functioning of a lead generation calculator. To make it more relevant, you can customize the spreadsheet to match your specific requirements. For instance, you can break down revenues to reveal revenue generated per customer instead of per region to achieve more detailed and accurate numbers.

Best Tips to Consider While Calculating Your Lead Generation Goal

Calculating the lead generation goal is a valuable strategy. It enables businesses to enhance the efficiency of their marketing efforts and convert prospects into leads. However, to maximize the effectiveness of this strategy, it is important to follow certain tips as mentioned below.

1.      Identify your baseline

To accurately determine your lead generation goal, it is important to set a baseline. For this, you must know about your current lead volume and the lead-to-customer conversion rate.

This information provides a reference point for starting. Once you know where you are starting from, it is easy to establish a realistic goal.

2.      Know your target audience

This is another crucial thing to keep in mind while establishing your lead generation goal. The size and attributes of your target audience can impact your goal. For example, if you are targeting a small, niche market, your expected number of leads each month may not be very high. Similarly, understanding the unique attributes of your target audience will help you set achievable goals.

3.      Evaluate your resources carefully

You must carefully assess your resources while setting a lead generation goal. If you have a restricted budget or a small marketing team, you may have to adjust your goal accordingly.

4.      Understand your sales cycle

The length of your sales cycle can also impact your lead generation goals. For example, if you have a particularly lengthy sales cycle, it may take some time to generate leads. So make sure to fine-tune your goal accordingly.

You can set your goal based on these factors. It is important to set a realistic goal that isn’t too high or low. An impractical goal will throw your lead generation efforts in disarray and negatively impact the morale of your marketing team.

Conclusion

Developing lead generation goals is crucial to determining your marketing success. It serves as the foundation for your lead-generation efforts.

Several businesses are using a lead generation goal calculator to define their goals accurately. Once done, you must constantly track and monitor the progress and adjust your goals if needed. Having practical and achievable goals at all times will help you generate the leads you want.

At Wishup, we can help you extend your business marketing team with our specialists in no time. Whether you are looking for experienced virtual assistants, bookkeepers, or even lead generation campaign experts, we provide you access to pre-vetted talent to augment your business. Get in touch with our reps today!

Author’s Bio: Danielle Hunt is an accomplished author with a passion for digital marketing and content creation. With over three years of experience as a Senior Content Marketing Specialist, she has honed her expertise in SEO and link-building strategies. Her insightful writing and keen understanding of online trends make her a valuable asset in the world of content marketing.