Do You Know The Value Of A Lead To Your Business?

It’s surprisingly easy to underestimate the value of your leads.

If you run a business, you’re constantly looking for more paying customers. Of course, the more leads, or potential buyers, that you convert into customers, the more revenue your business will generate.

First, what is a lead: a person or prospect who has a problem or need that your company can address.

Leads are vital to your business. They are the lifeblood that keeps your business afloat.

Simply means, if you are not getting any potential customers, you might as well just fold up.

Now please note this: THE COST OF A LEAD AND THE VALUE OF A LEAD IS VERY DIFFERENT.

And this is where business owners tend to lose it.

If you spend N100, 000 on adverts in 7 days and you got 200 leads from that adverts.

Your cost per lead = (TOTAL BUDGET ON ADVERTS / TOTAL LRADS GENERATED)

= 100, 000/ 200 = 500 This means your cost per lead is N500

Now the question and where I want to focus on is, What is the The value of your 200 lead.

PAY ATTENTION TO THIS.

If your product or service puts N50, 000 (NET PROFIT) into your pocket after 1 sale and out of that 200 leads, you closed a mere 20% (THAT IS 40 LEADS) That means you got 40 leads x N50, 000 net profit = N2, 000 ,000 net profits

Simply put, the value of your 200 leads is calculated by

Lead value formula: Total sales value ÷ Total leads = Total lead value

In this case, that is N2,000, 000 / 200 = N10, 000

This means that although the cost per lead was worth N500 only, the actual value of that lead is worth N10, 000 to your business.

Now do a rough calculation yourself, imagine you close up to 40% of that 200 leads, your cost per lead immediately goes up to N20, 000.

Also, imagine if you spend over 200, 000 in adverts within 7 days as well and got more leads.

Are you seeing *THE VALUE OF A LEAD*?

Once you know what your business’ lead value is, you can make better decisions about sales goals and marketing much more definitively. It helps you understand how many leads you need each month to sustain your company, and how much advertising you should be paying for in order to achieve those leads.

It also ensures you don’t pay more for your advertising than what your leads are actually worth.

I hope you now understand the value of a lead to your business?

Have any questions?

Call or whatsapp me on 08133956221

Daniel Iloh.