How can you predict sales revenue using lead generation metrics?

1 Lead volume

Lead volume is the number of leads you generate in a given period, such as a month or a quarter. It shows how effective your marketing campaigns are at reaching and capturing your target audience. To predict your sales revenue from lead volume, you need to multiply it by your average deal size and your conversion rate. For example, if you generate 100 leads per month, your average deal size is $10,000, and your conversion rate is 10%, your predicted revenue is $100,000 per month.

2 Lead quality

Lead quality is the measure of how likely your leads are to become customers, based on their fit, interest, and readiness. It shows how well your marketing campaigns are aligned with your ideal customer profile and buyer persona. To predict your sales revenue from lead quality, you need to segment your leads into different categories, such as marketing qualified leads (MQLs), sales qualified leads (SQLs), and sales accepted leads (SALs). Then, you need to assign each category a different conversion rate and average deal size, based on your historical data. For example, if your MQLs have a 20% conversion rate and a $5,000 average deal size, your SQLs have a 40% conversion rate and a $10,000 average deal size, and your SALs have a 60% conversion rate and a $15,000 average deal size, you can calculate your predicted revenue for each category and add them up.

3 Lead velocity

Lead velocity is the rate at which your leads move through your sales funnel, from the first contact to the closed deal. It shows how efficient and effective your sales process is at nurturing and closing your leads. To predict your sales revenue from lead velocity, you need to divide your lead volume by your average sales cycle length. For example, if you generate 100 leads per month and your average sales cycle length is 30 days, your lead velocity is 3.33 leads per day. Then, you need to multiply your lead velocity by your average deal size and your conversion rate. For example, if your average deal size is $10,000 and your conversion rate is 10%, your predicted revenue is $3,333 per day.

4 Conversion rate

Conversion rate is the percentage of leads that become customers, out of the total number of leads. It shows how well your marketing and sales teams are working together to persuade and satisfy your leads. To predict your sales revenue from conversion rate, you need to multiply it by your lead volume and your average deal size. For example, if your conversion rate is 10%, your lead volume is 100 leads per month, and your average deal size is $10,000, your predicted revenue is $100,000 per month.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?