Lead Generation Modeling Made Simple

Updated: January 28, 2010

But you've got to do the math. Most of the time it boils down to answering just two questions:

  • How many opportunities are required to get a sale?
  • How many leads do you need to create a new opportunity?

Let's leave out sales cycle length for now, to keep things simple. Let's just look at leads-to-opportunities-to-sales.

To build the model, you need a handful of inputs:

  • Average sales price of a closed deal
  • % of leads that turn into a new sales opportunity
  • % of new sales opportunities that convert into a sale
  • Average cost per lead

If you don't know these figures explicitly, come up with a reasonable but somewhat conservative guess. With this input, you can build a model telling you:

  • How many leads you need
  • How many sales will result (and with what bookings output)
  • How much those sales will cost via a paid lead generation campaign

And with that model, if the inputs are isolated and the lead/opportunity/sales figures are calculated with simple formulas, you can make adjustments to the inputs to see what the sales and/or revenue impact would be if you:

  • Generated more leads
  • Increased the average sales price
  • Increased the % of leads you can close
  • Increased the % of opportunities you can close
Featured Research
  • Contact Center Software on a Budget

    Although contact center software is necessary for a modern contact center, it can be outrageously expensive. Many companies find that their budget bloats during the implementation process. more

  • How UC Can Help Your Business Survive the Holidays

    The holiday season is filled with frenzy and excitement for businesses and consumers alike. Consumers prepare gift lists, compare brands and prices, and begin shopping with a vigor that is not present most other times of the year. For many businesses, the holiday season accounts for a large profit bump at the end of each year, and companies strive to exceed their goals and keep customers happy during this rush late in the year. more

  • [Infographic] Switching Phone Systems

    There are a lot of possible reasons you might want to switch to a new phone system. The old one might cost too much or be too troublesome to operate and maintain. It might not be flexible enough. It might not be reliable enough. Or it just might not have the kinds of features and capabilities that you need in today’s competitive business climate. more

  • Business Intelligence Software Cost Guide

    Your choice in a BI (Business Intelligence) provider can lead you to make better, data-driven decisions for your business, resulting in significant ROI. Or it can cost hundreds of thousands of dollars with mixed results. more

  • The New 2016 ERP Comparison Guide

    Selecting an ERP solution is no easy undertaking. You have to select and configure a system that fits your exact business needs. The right system can make operations more streamlined, efficient, and agile. But choosing the right vendor can be difficult. more