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
  • What You Need to Know About VoIP Security

    No matter the industry or area of expertise, a strong VoIP system is the perfect tool for any business looking to take both its internal and external communication to the next level. more

  • Are You Using These 5 VoIP Features?

    In large part, the success of your business depends on the strength and reliability of your team’s many communication networks—this includes your Voice over Internet Protocol system (VoIP). more

  • Video Conferencing Best Practices

    Video conferencing is quickly becoming one of the most important communication channels for both small and big businesses. As more businesses turn to this technology, expectations about the experience are also rising. It’s not enough to just offer video conferencing as a communication method. You also need to meet minimum audio and visual standards, and there’s even proper etiquette to consider. more

  • 10 Contact Center Myths Busted

    For most forward-thinking companies, the use of contact center software is on the rise. That said, in spite of contact center software’s sudden rise in popularity, a number of myths have begun to take shape. more

  • Go Mobile and Increase Employee Productivity

    The Bring Your Own Device (BYOD) and Voice over Internet Protocol (VoIP) tech trends now allow people to work whenever, wherever, and however they want—mobility makes it happen. more