 # How to Calculate Lead Value

## 1. Calculate Cost Per Lead

Formula:

Total cost to acquire leads (how much you spent on marketing in a given time period) / total leads acquired = Actual cost per lead

Example:

If you spent \$1000 on marketing and had 8 leads, this is what it would look like:

1000/8=\$125

Formula:

Example:

## 3. Calculate Lead to Sale Conversion Rate

Formula:

Example:

If you had 10 people ask for estimates but only 4 of them converted to actual sales, 4/10=0.4  or a 40% conversion rate.

## 4. Projecting Future Leads and Marketing Budget to Attain Sales Goals

If you have established a specific sales goal, you can use your current information to know how many leads you will need in order to achieve that goal.

Formula:

Sales goal/lead value = Amount of leads you need to reach your sales goal at the current conversion rate

Example:

Pretend that your goal is to increase your total sales to \$15,000. To calculate the number of leads you need (assuming the same lead to sales conversion rate as the previous period), you would do the following: