LEADS DON'T SELL. ONLY SALES PEOPLE DO

sales_lead_opportunity.jpg

Lead generation efforts are generally focused on identifying and qualifying high grade selling opportunities for the sales force.For the most part, lead generation programs do not generate order taking opportunities.

If the prospects are ready to buy, the lead generator might just as well take the first order there and then.

In reality, sales only take place due to the persuasive ability of a sales rep to win the new customer and come away with the first order, as the final step in a program of lead generation, lead nurturing and lead qualification.  The diagram on the right indicates the 4 levels of sales lead opportunities. As you move up the pyramid, the cost per opportunity increases and the volume of opportunities decreases.

You could decide only to provide the low hanging fruit to your sales force.

This strategy, however, is rarely practical and could be significantly counterproductive.

In your experience, how many of your qualified prospective customers were actually waiting for you to call on them to sell your services/products?  Moreover, focusing only on the “Low Hanging Fruit” in Level 1 may not be a successful strategy because the qualified prospects in Level 2 will certainly make a considerable contribution to profits and growth. As well, in many situations, a sufficient number of Level 3 opportunities can also be converted into profitable new customers. Their higher cost per converted opportunity will likely be insignificant when you factor in their contribution to profit over the long term. Sales conversion rates from opportunities to sale are likely to follow the same sequence, with Level 1 having the highest conversion rate and Level 4 the lowest.

Management must therefore seek the balancing point where the sales force is most productive, yet the company’s future income is also assured. As you move down the pyramid the question arises “what impact will the more numerous yet less qualified leads have on sales force productivity?” As a partner to our clients in the front end of the business development process, ETI Sales Support shares that dilemma. For unless the sales force is prepared to positively invest selling time to level 3 opportunities we, as the company responsible for identifying these opportunities, risk losing their cooperation. In our business, the “What have you done for me lately?” syndrome quickly comes to the surface, soon after a few bad selling experiences. If the lead generation effort is not producing sufficient quantities of highly qualified opportunities from levels 1 and 2, there may be several reasons.

  • It might be the markets targeted (industry, size, location).
  • It might be market positioning.
  • And yes, it might be the ability of the people doing the lead generation.

So what's the best strategy?

The best strategy is finding a happy medium somewhere in between. However, the ultimate arbiters are the sales people who will be following up. Unfortunately, it may be that some of the sales force is part of the problem. To our constant disbelief, many companies refer the decision of whether or not to continue a lead generation program to the sales force. When they do this here’s what normally happens:

  • The sales people who are successfully closing business want the program to continue.
  • Those not closing enough business tend to blame the quality of the leads for their poor performance.

This suggests that giving the prerogative to the sales force is may not be the best answer. Because a sales person who is not closing business will almost never admit it’s his or her fault, it is invariably, something or someone else. And the finger of failure often times points at the source of the lead or its quality. This is a situation where management ought not duck its responsibility. If the sales force is not closing fully qualified opportunities (that meet the specified criteria) then surely it must be poor performing salespersons who are the problem, not the leads. Especially when some of the sales force are succeeding and others not. 

What's to be done?

Well, first, management needs to be fully aware of the problem. Then it needs to make strategic decisions.

1. Determine the optimal level you wish to allow that is economically viable and practical from a sales force productivity standpoint.

  • Level 1 only.
  • Level 1 and 2.
  • Level 1, 2 and 3.

2. Non-performers may need some skill training. If this does not help, then other options should be exercised.

  • Take them out of the program and have them do something else.
  • Hire new sales personnel to replace them.

Not easy choices.

Case in point

Some time ago, ETI started a major project for a Fortune 100 financial services client with a sales force of 150. They faced the exact situation.

The program was enormously successful in every way for about half the sales force, while the other half were pulling down the overall result. Instead of killing the very successful half of the lead generation effort, however, the company decided to fire about 40% of the poor performing reps.

New reps were employed and trained specifically to support the lead generation effort. Guess what? ETI and our client enjoyed a major success and the client now has in place a comprehensive, measurable selling operation. They are no longer reliant for their success solely on the success of the top half of sales people who sold profitably.

Let me elaborate.

The purpose of developing a pipeline of ready to buy opportunities is to build a measurable, consistent and growing sales operation. In the above example, some of the sales force had been in place for many years. They had, for the most part, been “doing their own thing.” For all intents and purposes they owned the prospect relationships. In fact, the company often had no idea who the prospects were! In essence, the sales people were in control of the company’s destiny. Worst of all, they were not accountable!

In the environment that was developed as part of ETI’s lead generation effort, our client was now in full control. The flow of opportunities was controlled centrally in a relational database. Management now had visibility and control of each and every opportunity. Moreover, they had a complete and accurate view of the activity of its sales force. They could now demand that each one of the sales reps be accountable and report on the progress of each sales opportunity provided to them. And they had a structure in which to track all of that.

A comprehensive compliance and lead rating system was put in place to check and verify proper cooperation. Those who performed became part of the permanent sales team and were hugely successful. Those who did not play by the new rules were ushered out. The net result? A sales force that was molded into a comprehensive selling machine with the company in charge of a measurable, accountable, highly profitable sales operation. Half way through the process, management told us they had "learned more about their business in the first 6 months of the program than they had learned in the previous 10 years!" A great compliment and a tribute as much to their being able to listen and respond effectively, as to the validity of our guidance. Few managers want to make tough decisions that hurt their employees. We understand that.

Some would rather live with the problem than with the trauma of handing out those pink slips. In fact, more would rather do this than deal with the real issues. Nevertheless, if your goal is to maximize the ROI of your customer acquisition efforts, there’s no escaping tough decisions in business. Leads don't sell. Only sales people do. 

Real Time Web Analytics