Why start from the plan instead of the ad budget
Most businesses set an ad budget first and hope enough enquiries arrive. Working backwards flips the logic. You fix the revenue target, then calculate what the funnel must deliver to reach it.
That makes the plan testable. You see at once whether it is realistic with today's conversion rates, and which stage leaks the most people. Sometimes fixing replies in Telegram is cheaper than raising the Instagram budget.
What data you need
Use your own history, not market averages. A Uzum seller, a dental clinic in Tashkent and a developer in Samarkand convert very differently. Pull numbers from your CRM, your managers' spreadsheet or the till. If you have none, track each stage for a month or two first, because invented conversion rates produce an invented plan.
- Revenue plan for the period, in sum
- Average deal value
- Funnel stages: enquiry, qualification, offer or meeting, payment
- Conversion between neighbouring stages from past months
- Share of irrelevant enquiries
- Cost per enquiry in each channel
- Length of the sales cycle
Sales funnel calculation, step by step
The formulas run bottom to top, and each uses the result of the previous one.
Number of sales equals the revenue plan divided by average deal value. Number of offers equals sales divided by the offer-to-payment rate. Qualified enquiries equal offers divided by the enquiry-to-offer rate. Total enquiries equal qualified enquiries divided by their share of all incoming leads. The budget is total enquiries multiplied by the cost of one enquiry.
Rename the stages to fit your business: a showroom might use «visit», an online shop «cart» and «payment via Click or Payme».
A worked example with made-up numbers
These figures are illustrative only. Say the plan needs 60 sales a month. If every third offer closes, you need 180 offers. If every second qualified enquiry gets an offer, that means 360 qualified enquiries. If three of every four enquiries are relevant, you need 480 enquiries in total.
Multiply 480 by your real cost per enquiry and compare the result with your margin. If the budget eats the margin, the plan is unprofitable as written.
Now test a lever. If managers close every second offer instead of every third, you need 120 offers, 240 qualified enquiries and 320 enquiries. Ad volume drops by a third without spending anything extra on targeting.
What the calculation tells you
First, whether the plan is realistic. If you need several times more enquiries than you have ever received, the plan will not work at current conversion rates. You must change the target, improve the funnel or find new channels.
Second, where improvement is cheapest. Raising the closing rate often costs less than raising ad spend.
Third, sales capacity. If your managers cannot physically handle 480 enquiries, the surplus is simply lost and the ad money is wasted.
Calculate per channel and account for the sales cycle
Channels differ in cost and quality. Run the funnel separately for targeted ads, Google Ads, OLX and referrals, and you will see the cost of a sale rather than the cost of a lead. A channel with expensive enquiries but strong conversion is often cheaper per sale than a cheap one where few people ever pay.
If a deal takes weeks or months, as in real estate, renovation or B2B, this month's enquiries become revenue later. To hit next quarter's plan, you need the enquiries now.
Common mistakes and keeping the model alive
A one-off calculation goes stale quickly. Build a spreadsheet where the inputs can change, and update the actual conversion rates every month. You will see which stage moved and why.
This only works when ad, CRM and sales data sit in one place, which is what end-to-end analytics is for. The markdev team can help set it up, and if you would like to talk through your own funnel, just get in touch.
- Using someone else's conversion rates
- Ignoring irrelevant enquiries
- Forgetting the length of the sales cycle
- Planning leads without checking sales team capacity
- Calculating once and never updating
- Applying one average conversion to every channel
FAQ
Where do I start with a sales funnel calculation?
Start with the revenue plan and average deal value. Dividing one by the other gives the required number of sales. Then move up the funnel using your own conversion rates.
What if I have no conversion data?
Track each funnel stage in a CRM or spreadsheet for a month or two. Industry averages from elsewhere will not reflect your product, price or sales team.
How often should I recalculate the funnel?
Update actual conversion rates monthly and compare them with the plan. Recalculate also when you change prices, channels or the sales team.
Should I calculate the funnel for each channel separately?
Yes. Cost and lead quality differ by channel, and only a calculation through to the sale shows which channel is really cheaper.
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