With the holidays upon us, we recommend you take some time to consider your marketing goals for 2015. Our handy inbound marketing calculator from HubSpot can help you out with this. You can download it here. This blog will take you step by step through the process of calculating a traffic goal for your website based on the amount of revenue you want to generate next year.
Step 1 - How much monthly revenue do you want to generate in 2015?
We do not recommend pulling numbers for traffic and lead goals out of thin air. For effective marketing, you want to make sure that your inbound marketing activity goals are aligned with your company's overall revenue goals. In Step 1, enter your new monthly revenue goal. This is the revenue you want to generate in 2015.
Step 2 - Enter the percentage of this revenue that will come from inbound marketing.
What percentage of the goal do you need to come from your inbound marketing activities? Enter that number in Step 2. Most marketing plans include several strategies, and we want to make sure that you create a revenue goal for each. In this step, you can enter the percentage of your revenue that you want to create as a result of your inbound marketing efforts for 2015.
Step 3 - What is your average revenue per new customer or account?
In Step 3, you need to enter your average revenue per new customer or account. This is the overall value of a customer. If your customers provide recurring revenue, as in the case of monthly retainer clients, use the annual value of each client. If each customer is a one-time purchase, just enter the average of those. You can use a fancy calculator to figure out the lifetime value of each client, like this one, or you can just use an estimate. The calculator will tell you how many new customers you will need each month to meet your monthly revenue goal.
Step 4 - How many leads do you need to meet your goal?
Now that we know how many new customers you need per month, we need to calculate the number of leads you need to generate each month from your website. A lead is defined as a visitor to your website who took action to convert, such as calling your office, filling out a form, or downloading a resource.
For this calculation, you will need to determine your leads to customer conversion rate. This the percentage of your website leads that convert to customers. For example, if you received 200 website leads and closed 5 into customers, your conversion rate is 2.5%. If you are not sure what your conversion rate is because you haven't been tracking this, just make a guess. The median conversion rate for HubSpot customers is 7%, with the top 25% getting conversion rates of 56%.
Based on these numbers, the spreadsheet will calculate the number of leads you will need to meet your revenue goal. If your goals for 2015 include improving your lead conversion rate, go ahead and enter your "goal" conversion rate in Step 4 so you can see how improving your conversion rate affects the number of leads you will need.
Step 5 - Calculate your monthly web traffic goal
In Step 5, you will enter your website's visitor to lead conversion rate to determine what your web traffic goal should be. Your visitor to lead conversion rate is the percentage of your web visitors that become a lead by filling out a form on your website or calling your office after visiting your site. You can pull this data by looking at your analytics, and dividing the number of leads you generated by the total number of unique website visitors. If you don't have this data available, just use an estimate. The median for HubSpot customers is .93%, but the top 25% performing accounts are getting a conversion rate of 3.1%.
Once you enter your conversion rates, both your current and your goal, the spreadsheet will calculate the number of monthly visitors need to reach your goals.
Now you know how much traffic your website needs to get to reach your revenue goals for 2015. Your next step is to figure out how this compares with your current website performance and create an inbound marketing plan to fill in the gaps. Depending on where you are now, you will need to either increase overall traffic, improve your visitor to lead conversion rate, improve your lead to customer conversion rate, or all three. Take action today so you start 2015 off right by requesting a free inbound marketing assessment.