I think I’m on pretty safe ground by assuming you want to grow your business this year. I’m also reasonably confident that you have quantified that growth by an amount of revenue. Am I right? You have probably also mapped out what marketing channels you are going to use to do it. But have you worked out how many new clients that growth equates to, or how many enquiries/leads you need to generate to gain the number of new clients you are after?
Do you know your conversion figures from last year? Basically that’s the number of leads/enquiries divided by the number of new clients you gained. For example if in an average month you had 10 leads/enquiries and from those 10 you gained 4 new clients then your conversion rate would be 40%.
Do you know your average client spend per year? This is the average amount of revenue you generate per client. You can work this out in a few ways but the easiest is total amount of revenue you have generated in the last 12 months divided by your total number of clients you had in that same time frame.
I know there’s a good chance that you’ve read these 2 descriptions and thought that you can’t really use them as your business doesn’t easily fit with them. Usually it’s the “average client spend per year” that causes the trouble because people feel they don’t really have an average type of client because their spend is very variable. Or maybe you tend to get a lot of repeat work from existing clients rather than gaining new clients?
Think about them this way…these two key measures allow you to estimate the number of enquiries/leads you need to generate to achieve the growth in revenue that you have set as your target.
If the way I have described these two measures doesn’t quite fit for your business then think about how you can quantify something similar to help you estimate the number of leads you need to generate as this is a key component to understanding the quantity of marketing you need to do.
Your task this week is to work out the 2 measures for your business that will let you estimate the number of enquiries/leads you need to generate this year.