Calculating lead targets based on target revenue

This is a reposting of an answer to a Quora question, where somebody was asking how many leads a business should aim to obtain every week?

I’m reposting it here so that I can attach a link to a simple spreadsheet (Calculating lead generation targets) so that you can easily run the calculation yourself. It takes just a few minutes, if you have the right numbers to hand.

The easiest way to come up with a *realistic* lead target is to work backward from your revenue targets:

  • IF you have a sales target of, say $50 million…
  • AND your average deal size is $100,000
  • AND your salespeople typically convert 1 in 5 QUALIFIED leads (budget, authority, need and timeline are all present) to closed sales.
  • AND your inside salespeople typically find 1 in 10 marketing leads are qualified…
  • THEN, you will typically need to find 50 “marketing” leads for every closed $100,000 in revenue. Divide that into $50,000,000 and you’ll need 25,000 leads. Split that into a per-week (/52) target of about 480 per week.

It is unlikely that lead generation will be at a smooth rate of 480 per week every week, so it is often useful to plot this in the form of a “burndown” chart that spans a full year—in order to see the bigger picture.

Of course, this is a made-up scenario based on numbers plucked out of the air. It works best when you base it on good revenue pipeline data, which you will only have if you have a decent integrated marketing/sales automation platform which can track activity from contact to sale. There are more ways to influence revenue than simply increasing the number of leads that marketing generates. E.g. sales training to boost the close rate from 1-in-5 to 1-in-4 will shift the weekly target from around 480 to around 380.

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