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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.

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