Developing Prospects. Driving Revenue

The First Friday ReportTM

Why Sales Needs Fewer Leads

Posted by Dan McDade

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Feb 1, 2013 1:00:00 AM

Welcome to the February 2013 issue of the First Friday Report.

In sales and marketing we are all looking for ways to generate more leads. It's likely a daily discussion for most of us, but have you ever considered that your sales reps need fewer leads—or more accurately, fewer raw, unfiltered, unqualified leads. Sales reps need leads that have been carefully qualified, properly and consistently nurtured and appropriately developed increasing the likelihood of a completed sale.

We have a software client whose marketing representative proudly stated that they had driven 9,000 leads to sales the prior twelve months. The VP of Sales, however, expressed that he had received “zero leads.” So we ran some tests and found that inbound leads from one particular source were netting one qualified lead per 100 raw leads generated. What chance do you think there is that a busy sales rep would follow-up on 100 raw leads to generate one qualified lead? Your answer should be zero to none.

Why Does This Happen?

  1. Marketing is paid, in fact rewarded for, lead quantity and not quality.

  2. Technology solutions push more, poor quality, leads to sales faster and more efficiently than ever.

Far too many companies evaluate marketing’s success by the number of leads they hand over to sales. Many of the same companies fail to hold sales accountable for closing the good leads and for reporting back results that feed the marketing and sales model. The overall result is often wasted marketing dollars and wasted sales time.

The true measure of successful marketing should be how well marketing creates sales opportunities that have a high potential of developing into sales. The true measure of sales should be how well they close these good leads from marketing.

What Can You Do About It?

1) Develop a process to measure the cost per fully-qualified lead.

In addition to analyzing the actual cost of a qualified lead (not just the cost to generate a raw lead), you should also carefully measure the progression of leads through the sales process.

When analyzing one lead source for the software client mentioned earlier, we found that marketing had generated 3,117 leads at a cost of $23.15 per lead. However, upon further analysis only 40 were fully qualified and warranted sales follow-up. Of the rest 586 were disqualified, had bad data, or were existing customers. 514 required further nurturing before they could be considered sales ready and the balance couldn't be contacted after multiple attempts. The actual cost to obtain a fully qualified lead—$2,662.24.

If you are inspecting outcomes and conducting in-depth analysis at every step, you can substantially improve results.

2) Designate a group to nurture leads until they are sales-ready; and to take opportunities back if sales cannot gain traction for one reason or another.

Whose job is lead filtration, qualification and development? In our experience, best practices suggest that a separate group, inside or outside the company, needs to take control of the vital lead development function. Think of this group of specialists as “lead farmers,” or prospect development specialists—they qualify inbound leads, nurture lukewarm prospects, and turn the developed leads over to the sales force for harvesting. Often this process takes months.

A lead farmer equips the sales rep with in-depth knowledge about the prospect. With advance insight into the prospect’s motivations, pain points and buying plans, the sales rep can engage the prospect in a consultative conversation rather than launching into a cold-call presentation or a discovery interview.

By not passing unfiltered, unqualified leads to your sales team—and focusing instead on delivering fewer, yet more qualified prospects—you have the very real potential to significantly impact your organization’s ability to generate revenue.



PointClear is a prospect development company. Founded in 1997, the Atlanta-based company helps B2B companies fill their sales forecasts with qualified opportunities. PointClear closes the gap between marketing and sales—nurturing leads, engaging contacts and developing prospects until they’re ready to close.

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Topics: Lead Generation, B2B Sales, Lead Qualification