This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How To Escape From The Sales Lead Black Hole

CHICAGO, Jan. 28, 2013 /PRNewswire/ -- B2B firms spend 65% of their marketing budgets, on average, on trade shows, product seminars, cold calling, database purchase and telemarketing, activities designed to generate leads to potential new customers. Yet sales reps never contact approximately 70% of the resulting leads generated:  those leads seem to fall into the "sales lead black hole."

(Logo:  http://photos.prnewswire.com/prnh/20111102/DC96044LOGO)

Research published in the January 2013 issue of the American Marketing Association's Journal of Marketing examines why the sales lead black hole exists in many firms and what those firms can do to plug the hole. Survey data from 461 sales reps across four industries indicates that as sales reps gain experience and their quota achievement improves, they spend less time following up marketing generated leads and more time on the leads they generate themselves. 

The research also shows that closer monitoring the sales lead follow-up behavior of more experienced sales reps time is not the answer, closer monitoring actually results in less follow-up of sales leads. And while providing more leads to novice sales reps does increase lead follow-up, giving more experienced sales reps more leads actually produces less follow-up. 

"We found that sales reps explain their behavior by questioning the quality of the leads they are given. So the first things firms must do is to ensure that their leads are not only of high quality and but also that sales reps agree about that high quality.  We also learned that most firms evenly divide leads among their sales reps, irrespective of their experience or their past quota achievement.   Our research shows that allocating leads among sales reps based on sales reps' experience and past quota achievement can significantly help improve lead follow-up," write the authors Gaurav Sabnis, Sharmila C. Chatterjee, Rajdeep Grewal and Gary Lilien.

The primary takeaways:  while it may not be possible to eliminate the sales lead black hole, firms that ensure high sales lead quality, communicate that quality to their sales reps and distribute those leads differentially to less experienced sales reps will significantly outperform their business-as-usual competitors.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs