How Many Leads Does It Take To Make a Sale?

Leads, leads, leads…it seems that there is no end to searching and gleaning high-value lead data that keeps your business afloat. Well, that’s true. This process never stops. In B2B sales, new business leads are like fuel. And to get far, you need lots of fuel.

If you’re running a business, you must calculate how many sales leads you need at the current stage of your growth. Knowing the number of leads enables you to understand how to distribute your resources, organize your sales teams’ work and appointment setting, and plan your roadmap. So, it’s high time for you to find out what formula you should use to plug in your metrics. With us, that task wouldn’t be as hard as it looks!

What percentage of leads turn into sales?

Different sources give different data. Nevertheless, the latest studies suggest that around 10% to 15% of leads turn into deals. In order to know whether that is enough for your business or not, you need to be able to manage your data and calculate your leads the right way. 

How many sales leads do I need? Is there a formula?

“Wait! I thought that the more leads, the merrier. Was I wrong?”

Going over the top wouldn’t do you any good. Of course, generating fewer sales leads is bad for your finances. But generating too many leads hits your budget as well.

There is a reason why over 40% of sales executives consider the lead qualification and closing the most challenging part of their job while more than 70% of companies don’t reach their revenue goals because they generate less than 50% of leads. And it’s not because of high competition. It happens when companies don’t understand their budget and the correlation between their average sales price, their marketing costs, and other tricky elements. But let’s start with the basics.

How do you calculate your leads?

It all starts with your revenue goals. Let’s say you want to close this month with a revenue of 1,000,000 USD. Meanwhile, your average sale price is 7,800 USD. Therefore, to find out the number of customers you need to reach that goal, divide your revenue goal by your average sale price:

1,000 000 : 7,800 = 128

According to this, you need around 128 clients to meet your revenue goal. But that doesn’t mean you have to find 128 leads and stop at that. Lead-to-customer conversion takes a lot of time and effort. Some leads end up turning into no-shows, some leads become buyers, some leads take more than a month to be converted. 

How do you find your customers and figure out where they come from? It all depends on what methods you use to get b2b leads. It’s not uncommon for companies to combine inbound and outbound methods to generate leads. However, due to recent well-known developments, digital sales management is the new black, showing a great conversion rate and staying up-to-par with modern needs.

So, let’s see how you can calculate leads that come through your digital channels.

(Hubspot Marketing Research)

• Website traffic. How many visitors do you receive each day? Each month? How many of them leave your website without doing anything? How many of them actually scroll through your pages or click CTA buttons?
• Leads. How many users follow through by booking an appointment with you? Divide the number of those users by your total website traffic. Next, multiply it by 100.

Your average monthly traffic is 10,000 users. Out of these 10,000, only 450 users book an appointment. Therefore, your website traffic brings you 2,2% of leads every month.

• Lead conversion rate. Divide the number of sales for the last month by the number of leads you generated within the same time period. Then, multiply it by 100.

If you closed 150 deals last month, while your sales lead generation brought you 500 leads, your lead conversion rate is 30%.

With those metrics and your average sales price, you’ll understand how many more leads you need to hit your revenue goal.

How many B2C sales leads do I need?

B2C differs from B2B lead generation in so many ways. The most obvious difference is that there are no decision-making groups in B2C. While B2B lead research has to be very specific and accurate, B2C sales lead generation uses simpler ways to reach a big audience. That big audience usually doesn’t require as many lead qualification and verification steps.

With that said, calculating B2C leads is tricky. An average B2C audience doesn’t depend on long-term deals, therefore any B2C buyer can instantly shift to a different service or product. Therefore, generating B2C sales leads is a constant, never-ending process. Let’s say that the optimal number of leads you, as a B2C business, need to generate per day is 150. Now, you should take a look at:

1. Reach: How many business leads do you convert into sales every day? Mind that it’s pretty normal for only 10% of marketing leads to reach the closing stage.
2. Sales channels: Do you generate leads via your website? Social media? Video marketing? Instagram? How much does each sales channel cost you?
3. Industry: How competitive is your segment? How specific is your product? Do you sell to a certain age group? Do you sell to all categories?
4. Product price: What is your average sale price? How many units/service packages do you intend to sell?
5. Sales cycle length: How much resources does it take to convert a lead into a client?  

As you can see, when you need to calculate how many B2C sales leads to make a sale, it’s all about how much it costs you to generate those leads as well as the average budget of your target audience.

How many B2B sales leads do I need?

Speaking of B2B, it all depends on your industry and the industry you sell to. However, to give you an approximate estimate, here are some numbers from Hubspot’s Demand Generation Benchmark Report 2015.

From our side, we must remind you that those are just estimates.

Around 4% and 7% of the abovementioned companies would require a larger number of leads. For example, some companies with 1-200 employees may need to generate 2500 leads per month to keep going. According to HubSpot research, businesses that specialize in Software Development, Marketing & Advertising, and Finances, have the highest cost per lead ($51-$100). That means they have higher revenue and ROI goals, and a larger number of leads.

Thus, the answer to the question “How many leads do I need to make a sale?” is very nuanced. Whether you work in B2B or B2C, there are many pitfalls and specifics to consider, so figuring out how many leads you need exactly can be a time-consuming and frustrating process. However, here are some takeaways for you to explore:

1. Metrics matter. Your sales cycle length, your expected ROI, and revenue goals define the ultimate number of sales leads you to need to make a sale. So, you need to sit down together with your marketing experts and sales executives and break each metric down in order to make sense of your needs and next steps.
2. Digital is the new black. Inbound sales lead generation has always been efficient. However, nowadays it became even more relevant in terms of lead nurturing and sales management. As a result, you need to make sure that your digital marketing channels perform to their fullest capacity.
3. Know your audience. Before you start calculating how many leads you need to make a sale, you must know the financial capacity of your target audience. This is why you should invest some time into creating a detailed Ideal Customer Profile that explores the budget of your potential customers and their goals for the next quarter. Without it, you won’t be able to make sense of other metrics, build correct KPIs and sales lead generation campaigns.

We’d also like to sum up this post up by saying that it never hurts to ask for help. If you need to calculate the perfect number of sales leads for your business, our experts and lead researchers would be happy to lend you their expertise that covers multiple industries and channels.

So, in case you have any questions, be sure to let us know.

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