Often one of the first questions I ask a potential new customer is this. What’s a new lead worth to you? (Eyes glaze over..) Invariably most businesses have no idea. They haven’t advertised or marketed and then attempted to quantify the results. You placed an ad and then what happened?

For one new sale, what would you pay for a new lead? For example, if you sell trucks and you know what your profit margin is on each truck, then you can calculate what a new lead would be worth.

Say for instance you get five new sales leads and typically you can convert one of those leads into an actual sale. (A conversion rate of 1/5.) Let’s also say for example that those new leads cost you \$100 each. So for 5 leads your cost is \$500. You make one sale of a new truck with a profit margin of \$1500. So in this case you just made \$1000.

How can you determine what your website is worth unless you track all the leads coming in?
You want to know how much each type of lead is worth and then you can decide what your budget should be to actually bring in the new lead.

One of our clients is a civil engineer. He hadn’t thought about what a new lead would be worth. He knew that different engineering projects will bring in revenue amounts that may be different to other projects. So we helped him to determine what each new type of project profit would be and then how many leads he would need to have that convert to a new sale. In his case his conversion ratio was very high. He was well known in his community and was very good at what he does. So he didn’t need many leads to bring in new sales. In his case it was quality of lead over quantity.

Another one of our clients’ sells home décor items. He knew what his average sale per customer rate was from past numbers. About \$150 per sale/customer on average. What he didn’t know was his visitor-to-sales conversion rate. How many visitors did he need to bring in to convert to that \$150 sale? In his case it turned out to be 1/40. For every 40 visitors he gained 1 new sale/customer. So we helped him in 3 ways. 1st we redesigned his site to improve layout, and added layered SEO and new informational pages. 2nd we featured top sellers on his home page and specific space for new items. And 3rd, we helped him setup an email ad newsletter from his customer sales list. His traffic and sales quadrupled.