Today's lead conversion fictional business is ABC Accounting Firm (not a business in Barrie Ontario) and we are going to look at the current lead conversion figures and then what comes to pass if we are able to grow each of these areas by 10 percent and then by 20 percent and what kind of consequence it has on this business. At this time ABC Accounting Practice is getting 100 leads per month so that means 100 people are emailing in, calling in, showing up at their place of business, calling about a rate, downloading some sort of information packet, subscribing to their email newsletter, any sort of lead coming in. Next we have lead conversion or sales conversion. Right now through their sales process they are converting 20 percent of the 100 leads that are coming in to buyers so their sales percentage or closing ratio is 20 percent, so 20 buyers for the month. I'd like to mention that utilizing Customer Relationship Management software to manage your database will not only help manage your leads, prospects, and clients, but will help increase sales within Barrie Ontario.
And their CLV or Customer Lifetime Value which means the amount that a client will spend over the length of their association as a client. So let's say typically when you figure out a customer lifetime value you say its three or four years, but it really depends on a business to business basis so I can't give you an exact number for that so we're just going to use an example here and say that they are a client that just needs some basic tax preparation service each year and this costs 500 dollars.
100 leads per month at a 20 percent closing rate is 20 clients at 500 dollars per client which is equal to 10,000 dollars in revenue per month. Say if you go in and you are able to affect a 10 percent change in these three areas: lead conversion, sales conversion and the amount that a client spends with your business, you can dramatically increase the bottom line. So let's look at the numbers. A ten percent increase in leads takes you from 100 to 110. So how are you going to accomplish that? How are you going to increase your leads? Are you going to hire someone to rewrite your ads, advertise for example in the Yellow Pages, or try a postcard mailing or a direct mail letter? Are you going to set up a referral system to incentivize your current customers to bring in new customers to you? Are you going to talk with another business that has clients similar to yours and set up an endorsement deal? Are you hiring someone to rewrite the copy on your website or opt-in forms? As you can see there are a variety of things that can be done to increase your lead conversion rate.
So all we are looking for is a short, quick 10 percent increase through lead conversion methods. So now we go from 100 to 110 leads per month. Next we are looking at sales conversion. We are going to increase it from 20 percent by just 10 percent, to 22 percent, so instead of 20 buyers we are looking to get 22 buyers. Now what can you do to affect this kind of change in this business? Could you add a 100 percent money back guarantee? Can you think of any other services that they also need that you can take off their plate so they can spend some additional free time doing whatever they please? Can you provide some sort of social proof through testimonials? Can you implement a sales script to your staff? So, there are numerous things you can do to help increase sales conversion. Right now we are looking for just a 10 percent increase in our lead conversion efforts which brings us to a 22 percent sales conversion ratio that brings us up to 22 buyers. We are going to look at client lifetime value and again we are only looking for a 10 percent increase to go from 500 to 550 dollars.
How do we boost customer lifetime value? We increase the amount they spend per deal. We increase the frequency in which they come in and we also look to get recommendations and referrals from that client. We also look to add more services, and by checking in with them to see if something transformed in their life to where they need more of your guidance. By increasing your client lifetime value you can really affect an enormous amount of change in your business. You can even increase your rates just moderately and that can have an impressive impact on your bottom line. If you are able to set up some sort of newsletter program, membership site or ongoing communications like a monthly letter, letters based around holidays or based around exclusive offers that you are putting out, it can be any number of things even SMS messaging or messenger bots. It honestly could be any number of things. It could even be through content delivered by an email auto-responder.
So again we are going to be looking for a 10 percent increase which takes us from 500 to 550 dollars per client. Really this could go from 500 to 1000 or 500 to several thousands of dollars. This is a very big area where you can alter change in your business because most people aren't marketing to their current database. Clients that have already bought from a business are quite often ignored after the purchase has been completed.
I cannot stress enough that if you just set up some sort of email newsletter program, SMS messaging or send out specials via email or a direct mail newsletter program, you can really see that client lifetime value escalate. There are so many ideas that you can do to increase this number.
Again a 10 percent increase in lead conversion, a 10 percent increase in sales conversion and a 10 percent increase in client lifetime value and over a 33 percent increase to your bottom line. That's an increase from ten thousand to thirteen thousand three hundred dollars. This is a huge increase to a small business considering it is not going to cost them much to make these changes and it is not going to use up much of their time either.
Let's go a little bit further and let's see what a 20 percent rise in lead conversion looks like. So we started with 100 leads per month and this goes up to 120 lead conversions. Our sales conversion increases from 20 percent to 24 percent and client lifetime value goes from 500 dollars up 20 percent to 600 dollars. Let's add up the 20 percent increase in leads, 20 percent development in sales conversion and 20 percent increase in client lifetime value and that is an increase to seventeen thousand two hundred and eighty dollars. This is over a 72 percent boost from ten thousand dollars.
This could all literally happen in one month for your business through proper implementation of lead conversion ideas. This is not a joke or using unrealistic numbers. This is something you can immediately do in a business.