Atlanta CEO

PointClear: Why Your Sales Force Needs Fewer Leads

Dan McDade, Founder & President, PointClear

Dan McDade, Founder & President, PointClear

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Why Your Sales Force Needs Fewer Leads

(Or, what they can learn from an ancient Chinese warrior…)

By: Dan McDade Dan McDade, Founder & President, PointClear

Sun Tzu, the Chinese general and military strategist, said, “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” This wise statement indicates volumes about the importance of advance training and preparation for any important event. It can also be parlayed into sales motivation, since in today’s tough economic climate, sales executives can use any bit of helpful advice to sharpen their edges, stay focused and gain a competitive advantage.

With this in mind, I’m going to share another piece of guidance that isn’t centuries old or based on military prowess. But it does come from over two decades of my experience helping companies to improve their sales performance. It is this:

Sales reps don’t need more leads. In fact, they need fewer ones – or more accurately, fewer raw, unfiltered, unqualified leads.

To illustrate this simple truth, consider this all too familiar scenario: A company’s big-budget marketing campaign is hailed as a success after it generates a ton of leads. But months later, the increase in actual revenue is little more than a blip on the radar screen.

What happened? And who dropped the ball on all those promising leads?

The hard fact is that most of those leads simply weren’t all that promising to begin with. High-volume lead generation is a lot like creating a haystack in which the sales rep must find the proverbial needle. Bona fide sales opportunities do exist, but they are often buried in a pile of unqualified leads being pushed to sales.

This means your reps are spending much of their time and energy following up on bunches of low-quality leads that rarely end up customers. Meanwhile, many of the best sales opportunities remain hidden in the haystack, either being missed or being given insufficient attention to turn them into closed business.

Your sales reps quickly become tired and cynical, and start to look at the leads furnished by marketing with a jaded eye.

Truth: Culling fewer, but better qualified, leads can result in greater sales performance.

I’ve learned that when sales reps are presented with a smaller number of highly qualified sales opportunities – instead of a stack of low-quality leads – they are able to focus their efforts and give higher-value prospects the priority attention they deserve.

Sounds simple, right?

But focusing on lead quality over quantity is a seismic shift in the way most organizations currently operate. In fact, the majority of businesses tend to evaluate the success of their marketing initiatives based on the number of leads generated – or worse – the cost per lead.

Consider “Jennifer” in XYZ Company’s marketing department. In her monthly report, she enthuses: “We’re on track for a stellar quarter in lead generation. This month we received 1,278 leads – a 30 percent gain over last year! And despite higher ad rates, we are keeping our cost per lead under $100.00.”

At first glance, these numbers sound impressive. But keep in mind that Jennifer’s report says nothing about lead qualification, how the leads are nurtured, or what the sales force has done with all the previous leads it was given.

In contrast, while marketing is focused on the number of leads generated and the cost per lead, a company’s sales success is typically measured on the number of leads that are converted into revenue. This is a startling misalignment between marketing and sales objectives that desperately needs correction.

I hate to ask…but does this sound like your company?

Truth: Most organizations are missing the activities and processes that accurately identify, prioritize and nurture the best prospects.

You can think of lead qualification as a funnel. Marketing pours in raw, unfiltered leads from a variety of sources into the top of the funnel. Ideally, what emerges at the other end – ready for professional handling by a lead-hungry sales force – is a steady supply of qualified prospects, each with a defined process and timeframe for buying.

But reality rarely matches the ideal. Too often, no one is managing what happens to leads once they enter the funnel. As in the example with Jennifer above, marketing thinks it has done its job by simply dumping in a lot of unfiltered leads. No one contacts the inquirers. No one augments the leads with demographic and firmographic data, and certainly, no one nurtures long-term prospects into short-term ones.
These are all critical steps in the lead refinement and management process that are being overlooked.

The good news is that this cycle can be broken by implementing programs that identify and nurture the most likely sales candidates. By sending your sales force not ambiguous but prioritized, highly qualified leads, they are empowered to use their time more effectively and close more business. At the same time, by targeting and identifying only the highest-return segments, it is possible to actually decrease your marketing costs.

Of course, such a recommendation flies in the face of today’s large-scale, costly marketing campaigns designed specifically to generate large volumes of leads. If you’re one of those companies that measures its success based primarily on lead volume – but you’re not hitting the sales numbers you want – don’t you think it might be time for a strategy change?

I believe Sun Tzu would heartily approve.

Moving from “quantity” to “quality” lead-generation practices can deliver a significant pay-off.

A free white paper on “Why Your Sales Force Needs Fewer Leads” is downloadable from the PointClear web site. Go to www.pointclear.com/fewer-leads.pdf

About the Author
Dan McDade is the founder and president of PointClear, the sales and marketing services firm. Before McDade founded PointClear, he served as Vice President of Marketing for the direct mail firm, Jackson & Perkins, and as President of UST: The Business Marketing Group. PointClear’s expert sales and marketing professionals provide clients with forecastable sales opportunities, actionable market intelligence and effective market coverage. To find out more about PointClear’s products and services, go to www.pointclear.com.