Three Reasons Why Sales Needs Fewer Leads

Yes, you read the title
correctly. Marketing campaigns that produce an abundance of leads can
actually do your organization more harm than good. Why, you wonder? For
starters, high-volume lead generation is a lot like creating a haystack
in which the sales rep is responsible for finding the proverbial
needle. Bona fide candidates do exist, but they’re often hidden among
the onslaught of unqualified leads being pushed to sales.

This is why
many sales reps cast a jaded eye toward leads generated by
marketing–it’s too hard to find the leads that translate into real
sales opportunities. By forgoing lead generation practices that deliver
volumes of mostly low-value prospects, companies can begin to focus on
identifying and targeting their most likely buyers.

Quality Over Quantity
Research has stated that "Often, improvements in lead generation are at
the expense of better lead management, resulting in an overabundance of
unqualified leads of differing quality that cannot be handled by
current resources and sales capacity. These leads compete for the time
and attention of customer-facing employees who have no way to
prioritize them. Having fewer, but higher-quality, leads provides more
value to sales employees and improves the visibility and accountability
of marketing." Sounds simple, right?

Unfortunately, focusing
on lead quality over quantity represents a seismic shift in the way
that most organizations operate today. These organizations tend to
evaluate the success of 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 writes:
"We’re on track for a great quarter in lead generation. This month we
generated 1,278 leads–a 30 percent gain over last year. And in spite
of higher ad rates, we continue to keep our cost per lead under $100."

report says absolutely nothing about lead qualification, how leads are
nurtured, or what the sales force has done with previous leads. This
causes one to wonder whether anyone in the company’s management
understands why investments in sales and marketing aren’t resulting in
more closed business.

The Lead Funnel
You can think
of lead qualification as a funnel. Marketing pours 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 the
simple truth is that reality rarely matches the ideal. Too often, no
one is managing what happens to leads once they enter the funnel. As in
our scenario with Jennifer above, marketing has been told to focus on
things like the number of leads generated and lead cost. It thinks it
has done its job simply by dumping in a lot of unfiltered leads. No one
contacts or qualifies the inquirers. No one augments the leads with
demographic and "firmographic" data. And 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.

When Less Is More
many raw, unqualified leads can clog the sales funnel, and actually
impede sales performance. The bottom line is that sales reps don’t need
more leads; they actually need fewer ones–or more accurately, fewer
raw, unfiltered, unqualified leads.

In the past, sales reps
have wasted huge amounts of time following up on unqualified leads from
marketing. For this reason, sales reps–especially those who make their
money through commission– become resistant to marketing-generated
leads, assuming they’re the same old, same old. Thus, these leads are
largely ignored.

This cycle can be broken through processes that
identify and nurture the most likely sales candidates. By sending your
sales force only highly qualified leads, they’re empowered to use their
time more effectively and close more business. At the same time, by
identifying and targeting only the highest-return segments, it’s
possible to actually decrease marketing costs.

Such a
recommendation flies in the face of today’s large-scale, costly
marketing campaigns designed specifically to generate volumes of leads.
But if you’ve tried that course of action and it hasn’t delivered the
bottom-line results you envisioned, it might be time to consider a
strategy change.

Quality, not quantity, is a proven adage.

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7 thoughts on “Three Reasons Why Sales Needs Fewer Leads”

  1. Articles like this drive me crazy! It also demonstrates why you shouldn’t look to CRM for a customer acquisition solution. They just don’t get it. Giving sales less leads somehow means they are better??? This article is a cliche, “quality, not quantity,” with no solution.

    Take for instance this paragraph:

    “In the past, sales reps have wasted huge amounts of time following up on unqualified leads from marketing. For this reason, sales reps–especially those who make their money through commission– become resistant to marketing-generated leads, assuming they’re the same old, same old. Thus, these leads are largely ignored.”

    Where is the solution? Why not verify the lead in the lead management system before the sales person ever gets the lead? Don’t generate less, just verify better.

    If you have the efficiency of lead verification and lead management your marketing lead quantity and quality are a moot point.

    I say feed me lots of conversations at the right price and I will blow up your Top Line!

  2. Quality leads are always good to have, but the focus should be on marekting to the right people not just trying to get any person to register as a lead. Drive the right marketing first and you will see the results.

    Many leads do not always provide many sales!

  3. This is a great start to an important debate regarding effective lead management practices. I would like to offer up a couple of ideas for the dialogue. My suggestion is that both quality and quantity are both important. Quality is required for marketing to successfully support sales (and get along better), but for many companies, growth depends on quantity.

    For quality to be achieved we have to talk about qualification. Marketing is in the best position to cost-effectively perform qualification prior to moving the lead into the sales pipeline. How the qualificaton is accomplished is based on product type, but it is best performed with a telemarketing function (B2B)or through web-based self-selection (B2C). Metrics also perform a key role. Measuring quantity alone leads to trouble. Metrics such as lead conversion to proposal or lead conversion to invoice are two that I like.

    Finally, when quantity is required for growth, campaign automation is key to success. New campaign software helps to correctly fill the funnel with better pre-qualified leads. Current practices allow for better targeting and more self-selection ensuring that the initial prospects are more likely to qualify into good leads. Next we should talk about the role that sales should play in helping make the lead management process work better for more effective marketing results.

  4. I agree with Bill, verification is key. Marketing will always obtain plenty of leads of varying quality. Also, marketing has a job, to get LOTS of leads! The more the better!

    What’s needed is note less leads, but some strategy for judging the quality of leads and passing them on to the most appropriate team for further action.

  5. I agree with this comment from Nic – drive the right marketing first and you will see results.

    Before passing out volumes of low-value leads to their sales teams, marketing has to do a complete analysis of their customer and prospect database. Many companies just buy another prospect list, add to their customer database, (which is often not accurately updated), throw in all the leads from the latest trade show or mailing campaign, mix together, hand to sales and call these leads.

    There is a better way. Marketing could be using location intelligence, market analysis tools and mapping to analyze and visualize their best customers – who they are, what major characteristics they share, and one thing, many forget, is exactly where they are. Instead of working from piles of reports, they could identify and instantly see all their customers, best prospects, and any overlooked prospects.

    Results – get sales and marketing on the same page, keep sales focused on most profitable customers and the most likely buyers, better cross-sell and up-sell, plus nurture with effective loyalty programs. That equals quality leads.

  6. Interesting points discussed here. I’m working on Dynamics CRM implementations in the Norwegian market. Business is doing rather well these days in Norway. In our market there is focus on qualification of leads before passed on to sales as oppertunities. I visited one client on Friday, and they referred to leads as “We receive jobs”. When business is doing bad – you would do the other way around since there is not enough work to do. I.e. move your leads right into the oppertunity phase with no further qualification.

    A typical Lead Qualification list:
    – Is the customer going to buy?
    – Have our contact the power to buy?
    – How can we control the process?
    – How far along was the lead when we got it?
    – Will the customer buy our offering?
    – What is the value of winning?

    Based upon this qualification the weekly Sales meeting move leads to oppertunities. They only look at leads that has been qualified correctly

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