The stats will change your mind:
- 10% of all qualified leads will close within 3 months
- Another 16% will close within 6 months
- Another 19% will close in one year
That’s 45% of all qualified leads will end up buying from you or your competition within one year.
More shocking stats about leads:
- 70% or more of all leads are not being followed up by sales
- 80% of marketing investment is wasted
- 92% of all leads prospected by sales people (ie: cold call) end up eventually buying
- Sales People spend 37% of their time prospecting for new leads (either new customers or new opportunities in existing customers)
As a sales manager, you need to coach your sales people on how to properly execute Lead Generation. You need to spend time with them making them more productive. You need to make sure they not only know how to create demand in their ‘patch’ but spend the 15+ hours a week they spend prospecting extremely productive. If I asked your sales people to show me their statistics around the number of prospecting calls they made to the number of closes they accomplished, would the ratio be better than 6:1? (That’s 6 cold calls to one sale). That’s world class and highly productive.
What is Lead Generation? It is Demand Generation (creating awareness in the marketplace by getting your name in front of customers) and Lead Management (managing leads through nurturing to get them qualified). They are two separate skills that combine into producing highly qualified leads that close faster with a higher sales price. Think like this: Demand Generation=Long term lead flow. Lead Management=shorter term lead qualification. Sales process=short term sale.
“Ok, I need to focus on coaching not only sales process but also lead generation as well. But how do I accomplish this task?”
4 Ways Sales Management Can Coach Lead Generation:
1. Schedule and Measure. The first step is ensuring EACH sales person on your team blocks time each week to prospect. The hardest step to start generating leads is to block the time to actually do it. With that time, the best way to be productive is to actually measure key performance indicators through a sales performance management system. Key stats that you should measure:
- Number of:
- Opportunity to close conversion rate
- Lead to opportunity conversion rate
- Inquiry to lead conversion rate
- Leads per Sales Rep
- Inquiry to Opportunity Ratio
2. Demand Generation is as important as Lead Management. Too often we only coach on getting the deal done. Yep, that’s important yet we blow off coaching on lead management. We train on how to make a cold call; how to overcome an objection to get an appointment or how to get past the gatekeeper. All important elements in lead gen. But what about demand generation. It is critical you train, coach and develop your reps on how to stimulate demand. “That’s up to marketing!” said one sales rep at our customer. No it is not. It’s not 1999 anymore, or even 2005. Its 2011 and the new way sales people need to prospect is to generate demand. Demand Generation Vs. Lead Generation; 6 Questions You Need To Ask.
3. Qualify the Leads. Too many times sales people react to some slight interest. Not all leads are created equal. Make sure you coach your sales reps to only work on those leads that are worth it. Best in Class Sales Management train and coach sales people to qualify leads under the B.A.N.T. criteria.
Just because the lead (person) fogs a mirror does not mean they are worthy of your time and energy.
4. Write it down for your reps. Creating demand and managing leads is not easy. That’s why sales people work at it so hard. When you provide this coaching, make sure you document areas of improvement. If a rep is struggling with creating awareness in their patch, help them coordinate an event that drives suspects to it. But don’t stop there. Put defined goals around the most common metrics to ensure their productivity stays high. Too many times we host or go to an event and ‘walk around’. By placing goals on the most common metrics, we can drive awareness. This will result in long term better qualified leads.
Best in class sales management is coaching Demand Generation and Lead Generation. It will result in better qualified leads. Your close rate will improve, average sales price on your team will increase and sales cycle length decrease. This will mean increased compensation for your reps. Don’t forget about the top of the funnel. World class sales management demands better leads…do you?