How many customers do you need?

How many customers do you need to deliver the revenues you’re targeting?

There are two ways of approaching this challenge, and it’s worth going through both of them as each can be used to test the assumptions in the other.

Top down

Decide on what you want your sales revenue to be in the coming year.  Using your historical average order size calculate how many orders your sales revenue plan is going to need.  From there you can work further back to the number of sales proposals you need to be making to prospects and customers; then back to the number of appointments, the number of qualified leads, and the size of suspect pool you need to work from.  To do this, you will need to understand the rough ‘conversion ratios’ in your business from leads to appointments, and proposals to sales.

Bottom up

Take a look at your last year’s sales in terms of value and volume.  Break this down into figures for your different products and/or services.  Then, based on your best estimates, assign a percentage increase to each of these revenue lines that you think is realistically achievable with the marketing activity that you do now.  You can then calculate a ‘likely’ sales revenue for the next year based on marketing in the way you have been up to now.

The crunch
Now, and here’s the crunch, compare the two revenue figures that you have arrived at via these two different routes – you will probably find there is a gap.  This is the gap that you need to fill by doing more lead-generation marketing to deliver more opportunities to close sales.

Generating leads for your business can be achieved by planning a series of co-ordinated, measurable activities that you can then change and improve.  Aim to do lots more of the marketing that is working, and either re-invent or ditch the marketing that is not working.

This calculation is explained in greater detail in marketing essentials.  Improving your business skills is just a click away, we’re ready when you are, come and join us.