More leads may reduce sales opportunities – Check your December data!

Posted: January 11, 2013 by David Lamont in Lead Generation, Opinion
Tags: , , , ,

Here’s a situation that’s not uncommon when selling enterprise storage or data management products: a firm generates an increasing number of marketing-qualified leads, but the percentage, or even the volume, of sales-qualified leads drops. Obviously, the quality of the leads should be questioned. But what if the lead sources are the same? Why are the new leads not as good as the old leads?

Before you kill your marketing programs you should look at your December data (or any other short month for business). You’ll likely find a very a strong correlation between the time the salespeople spend actually talking with prospects and the number of sales-qualified leads. In other words, if the salespeople are not connecting with prospects, leads will not convert from marketing-qualified to sales-qualified. The number of man-hours dedicated to talking with prospects, and the quality of the initial sales pitch, are far more likely to determine the number of sales-qualified leads than the source of the lead. The holiday season can highlight this often overlooked fact, especially if you don’t track the actual number of sales conversations.

Unfortunately, the sales bottleneck is not always recognized, especially when many marketing programs are running and evolving at the same time. It’s easier to conclude that a marketing campaign is failing, or worse, that marketing as a discipline does not work.

It’s natural to assume that if you increase the number of marketing-qualified leads, the number of sales-qualified leads will increase at the same rate. However, that is only be true if the sales team also increases its bandwidth to process them.

Think about the logistics (optimistic for complex/expensive IT products): A salesperson with time for qualifying leads makes an average of 60 calls per day. With an average of 3 attempts required to reach a prospect, they can talk to 20 prospects per day. With an average of 17 dialing days per month, one dedicated salesperson can talk to 340 prospects. If 5% have an open project, budget and authority the salesperson would convert 17 marketing-qualified leads to sales-qualified leads per month. Put another way, that’s 17 sales-qualified leads per 1020 dials assuming you have a large team of salespeople and can average the data. Obviously, a single salesperson talking to 20 prospects for 15 minutes each would require over 5 hours of talk time and would not be making as many dials.

If the overall bandwidth does not increase, individual salespeople are put under pressure to quickly “work through” the backlog of leads before they go “stale”. Nobody wants to have a large number of “Open”, “New” or “Unopened” leads next to their name in the CRM system. However, the salespeople can only make a limited number of calls in a day so they only try to reach each prospect once or twice before they move on. Best practices call for 5 to 8 call attempts, so while they make many calls, they have fewer timely conversations. As such, they don’t identify as many sales opportunities. Additionally, pressure to clear a backlog may result in less thought going into a customized sales pitch – again depressing the number of sales opportunities.

Even successful sales calls can result in fewer sales-qualified leads when there are more leads than sales bandwidth. Typical enterprise sales are complex. They require research, demos, evaluations, team selling, etc. so once an opportunity becomes “hot” the salesperson has less time to work on new opportunities. Because they have an opportunity in-hand and less time, their criteria to qualify new leads gets more stringent, again reducing the number of sales-qualified leads.

In conclusion, bandwidth is not just an issue for engineers to consider in their storage and data management products, it’s also an issue for the CEO, CMO and VP of Sales to consider when selling those products.

About the Author

David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management, and enterprise software products. He can be reached by email at blog [at] Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).

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