Bob Tripathi shares his opinions, insights and advice on all things digital marketing. In this video, Bob discusses how companies can forecast leads based on their deal size and past history.

Debbie: Hi this is Deborah Warner with Bob Tripathi and we have more questions for you Bob.

Bob: OK great.

Debbie: Right now companies are forecasting their strategies for the coming year and how they’re going to grow, so they are setting their goals and objectives. How can they forecast leads? That’s where their sales are going to come from. So what is the best way to do lead forecasting?

Bob: This ‘s a tough one. It is science and art. But some of the ways that we recommend people do lead forecasting is, of course, by looking at your revenues. So how many sales do you want to generate for the whole year? Then you want to look at how people arrive at those numbers in order to generate that many sales. How many deals need to happen? Typically that is always an average deal size.

In the e-commerce world you call it auto value. In the in the B2B Will you call it an average deal size. Once you know an average deal size you take your total revenues, you take your average deal size and based on the average deal size you look at how many deals you need to close in order to meet those revenue targets.

Now, let’s say you have to close 10 deals a year or 12 deals a year. In order to close 12 deals a year, you need one deal a month. In order to close one deal, you need 100 Marketing Qualified Leads (MQLs) or 50 Sales Qualified Leads (SQLs). Right? So that’s how you backtrack. Sometimes you have those numbers if you’re in year 4, year 5, year 3 of your business. But if you’re new or in year two year or three you don’t have it. Even sometimes, in year 10 or whatever, you may not have those numbers. But that’s how you do lead forecasting.

Debbie: OK. So it’s a numbers game and it’s based on the percentages and your past history.

Bob: That true. That’s right. OK.

Debbie: Awesome. Thank you so much. I hope this helps. If you need any additional assistance contact us at BobTripathi.com.