Whether you are a business start-up, or an established business planning for your next phase, you need to understand how many new business opportunities you need to generate in order to hit your sales numbers.
Many businesses start in the same way – a small group of enthusiastic people with a great idea for making money. They often live and breathe their product or service, and are good at thinking up new ways to make these even more valuable to their customers.
If they are fortunate enough to be in a low-overheads business, they can often go along like this for quite some time. But at some stage, they will need to start thinking more clearly about the future of their business. This might be prompted by an opportunity to move into a new market, or the need to invest in staff, premises or equipment.
At this point they will need to sit down and work out not only what they expect their revenues and profits to be, but also how they are going to find enough new customers to deliver the revenue they need.
This is where some knowledge of lead-generation marketing comes in. By this I mean how a business can apply the tools of marketing to generate qualified business opportunities that are likely to lead to sales. After all, as they say, there are three things that will deliver success to a business – and they are sales, sales, and sales.
So, where should you begin? There are two ways of approaching this challenge, and it’s worth going through both of them as each can be used to test the assumptions in the other.
Top down
Decide on what you want your sales revenue to be in the coming year. Then work out your historical average order size and use that to calculate how many orders your sales revenue plan is going to need. From there you can work further back to the number of sales proposals you need to be supplying to customers; then back to the number of appointments, the number of qualified leads, and even the number of enquiries you need. To do this, you will need to understand the rough ‘conversion ratios’ in your business from leads to appointments, and proposals to sales, for example.
Bottom up
Take a look at your last year’s sales in terms of value and volume. Break this down into figures for your different products and/or services. Then, based on your best estimates, assign a percentage increase to each of these revenue lines that you think is realistically achievable with the marketing activity that you do now. You can then calculate a ‘likely’ sales revenue for the next year based on marketing in the way you have been up to now.
The crunch
Now, and here’s the crunch – compare the two revenue figures that you have arrived at via these two different routes. You will probably find there is a gap. This is the gap that you need to fill by doing more lead-generation marketing to deliver more opportunities to close sales.
Generating leads for your business is a question of planning a series of co-ordinated, measurable activities that you can then change and improve. You should aim to do lots more of the marketing that is working, and either re-invent or ditch the marketing that is not working.
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