How much is a new lead worth to your business?

How much is a new lead worth to your business? $5? $10? $50? $100?

Not sure? Keep reading and we’ll do some math you’ll come to LOVE!

Let’s say you sell a service in your business for $500. How much $ profit do you make on that sale?

To answer this question, you need to know the costs associated with selling this service, which includes things like labor and materials. For this example, let’s say it costs you $100 to fulfill the order for the $500 service.

Now before the accountants send me hate mail this calculation does not include ALL the expenses in your business. You’re only looking at the direct expenses associated with the product, not the entire overhead of your business.

So let’s calculate the profit of this service.

$500 Revenue - $100 Costs = $400 Profit (which is an 80% profit margin)

Now let’s say you kick off a new marketing campaign and you end up spending $50 on advertising. Those ads generate 10 new leads for your business and 1 of those converts into a sale!

So now we have…

$500 Revenue - $100 Costs - $50 Marketing = $350 Profit (which is an 70% profit margin)

Is the $50 marketing expense worth it to attract a new client?

What if, over time, you learned that you could consistently attract 10 new leads & 1 paying client for every $50 spent on advertising? Would you be willing to spend $500 to attract 10 new paying clients next month? 

Those 10 new clients x $350 in profit = $3500!

While technically speaking marketing is an expense, it’s an expense that can actually generate a return on investment! This example alone shows a 600% ROI.

So what is the value of a new lead to your business? Of course it’s different for all businesses. If you sell a $10 product it’s going to look wildly different than if you sell a $10,000 one, but the principles remain the same.

A great way to start attracting new leads, even before running ads, is with a Lead Magnet. Think of a lead magnet like a super-irresistible freebie that you’re willing to give away to your ideal client in exchange for their email address.

Chances are you’ve seen lead magnets on social media or websites you visit. In fact, you’ve probably signed up to get one yourself. I know I have, a few hundred times in fact, and I've gone on to buy from many of those companies later on!

And that's exactly the point of a lead magnet. It opens the door to a prospective new client and the emails that follow start fostering them toward making a purchase. So if you don’t already have one (or two) of these in place in your business, now is a great time to start.

In our newly released Capture + Convert Course, you’ll learn exactly how to create an enticing lead magnet your ideal clients will adore, and build an email series that will nurture the relationship with your new leads. And you can grab it today for ONLY $37! 

So what’s a new lead worth to you? Get out your calculator and do a little math. Armed with this knowledge you can confidently invest in your marketing & grow your business...one lead at a time!