December 5

The cost of sales person generated leads

If you are like most businesspeople, you have a bias towards salesperson generated leads. After all, a salesperson can do many things that marketing, the Internet, or appointment setters cannot. However, if you calculate the true cost of a salesperson generated lead, you may find that their cost is exceptionally high. Worse yet, the weaker sales reps tend to have off-the-chart lead costs. The example spreadsheet below will help you determine the cost of salesperson generated leads and their effectiveness. Cost of lead

Value of a Lead

Example 1

Example 2

Avg Customer Sales/Year

$10,000

$20,000

Average Margin

50%

30%

Avg Years Customer Stays

4

2

Value of Customer

$20,000

$12,000

Leads/Customer

5/1

10/1

Value of a Lead

$4,000

$1,200

Cost of Salesperson Generated Leads

Sales Person 1

Sales Person 2

Total New Leads Generated

50

100

Cost/Lead

$416.67

$735.29

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