Do you remember me asking you about how many new clients you want in the next 12 months, and what the average spend per client was a year? The reason I asked you these questions was to help you quantify the number of new clients (or new sales) you need to obtain in the next 12 months for you to hit your business goals.
Now we know the answer we can use it to plan your marketing for the next 12 months so we can do enough to generate the required number of enquiries/leads for you.
Let’s take this step by step so we don’t get any brain ache!
- What is your revenue target for the next 12 months? Let’s keep the maths easy and say it’s £100,000
- What is your average yearly spend per client? Let’s say it’s £5,000 so that means we need to generate 100,000/5,000 = 20 new clients
- What was your conversion rate? Let’s say it was 40% so that means for every 10 leads we get, you convert 4 of them into new clients
- Right then…if we need 20 new clients to make our £100,000 and we have a conversion rate of 40% then we need 50 enquiries/leads. (If for every 10 leads you get 4 clients then to get 20 clients you need 5x more leads).
What are your magic numbers? How many leads do you need to generate to hit your targets?
If you are mathematically minded you will have probably enjoyed working this out for your business. This is a crucial calculation if you truly want to understand your business and drive its growth.
Next time I’ll show you how to use this to work out how much marketing you need to do.