Tuesday, June 21, 2011

Stop Depending on Your Salespeople to Generate Leads

For B2B companies that sell complex products or services, keeping the sales pipeline filled with qualified leads is vital.  Many companies have traditionally relied on salespeople to generate their own leads.  In fact, many companies expect their salespeople to perform most, if not all, of the jobs required to find and win new customers, from identifying prospects, to generating leads, to closing sales.

The problem is that this traditional approach to lead generation no longer works as well as it once did.  Business buyers don't need salespeople as much today as they did in the past.  They can go online and find most of the information they need to learn about and evaluate products and services.  So, buyers are now performing research independently, and they are avoiding conversations with sales reps until much later in the buying process.  As a result, it's become a lot harder for salespeople to create the initial engagement with potential buyers, which is what lead generation is all about.

Making salespeople responsible for lead generation is a bad idea for several related reasons.
  • Salespeople must devote a significant amount of their time and energy to lead generation work in order to produce a sufficient number of leads.  According to the 2011 Sales Performance Optimization survey conducted by CSO Insights, salespeople are now spending 24% of their time generating leads and researching accounts.
  • The more time a sales rep spends on lead generation, the less time he/she has for actual selling.  The CSO Insights survey shows that salespeople are spending only 41% of their time on actual selling activities.
  • The less time a salesperson spends on actual selling, the less revenues he/she will produce.  CSO Insights says that only 59% of sales reps made their quotas in 2010.
When the "revenue per salesperson" number goes down, overall company revenues are likely to deteriorate.  Companies must either accept lower revenues of compensate in some way.  The traditional responses have been to browbeat the salespeople to work harder, provide sales reps with training to improve their skills, or hire more salespeople.

The first two responses usually don't work because the real problem is not unproductive salespeople (although some probably are), but an ineffective and inefficient lead generation process.  The third response (hiring more salespeople) may produce higher revenues, but it will also significantly increase your selling expenses.

The real solution is to use effective marketing programs to generate leads and use your sales reps to do the things that only they can do - have meaningful, personal, one-on-one conversations with prospects who are truly sales ready.

Companies are now recognizing that marketing should take the lead in lead generation, but it's also clear that this is still a work in progress.  In the CSO Insights survey, respondents indicated that 47% of sales leads are still generated by salespeople, while only 29% are produced by marketing.

Over the past few months, I've worked with several companies that get more than 80% of their new sales leads from salespeople and only 20% from marketing and other sources (referrals, press coverage, etc.).  These percentages need to be reversed.  Your objective should be to generate 80% of your sales leads from your marketing programs.

If you currently depend on your salespeople for most of your leads, this transition can't be made overnight.  The important thing is to set ambitious but attainable goals for marketing generated leads, and then put the marketing programs in place that will enable you to reach those goals.


  1. David thanks for the post. Makes a tremendous amount of sense. As a sales professional, it is ultimately more satisfying (not to mention more profitable) to spend time engaged one-on-one with qualified prospects and closing sales than to spend time poking around for leads. Thanks again for the insight. Eric Nielsen

  2. I worked for a quick printer franchisee who wanted to morph into marketing service provider. Yet his sales methodology involved intensive cold calling and absolutely no self promotion marketing for the effort. The company clung to the printer name yet expected prospects to view them as marketing experts. Needless to say, they are not succeeding. And they are turning over salespeople every few months in the process. It is a small industry and recruiting has become increasingly difficult for them as the word gets out.

  3. This is definitely interesting reading and I agree that a more creative marketing approach will benefit everyone and allow the sales staff to sell. I'm curious if there are examples of suggestions on how to carry out such lead generating marketing strategies, especially for small companies such as ones with ONE marketing person on staff. Any further info would be greatly appreciated. Thanks!

  4. I interviewed with a quick printer who operates under two names. One for printing. One for marketing. He said I would carry two different business cards and would be selling printing to printing buyers and trying to connect with management level people to sell marketing. I discovered that two other people had preceded me and both been let go for failing to succeed. When he whipped out the non-compete, I hit the door. The job description went from difficult to career ending.

  5. I just started working for a quick printing company last month. I discovered that I had been preceded by four sales people in the last two years. I am concerned because I signed a non-compete that will last for a year even if I am fired. If only I had known the history of the company I would have not taken the job. I am spending all of my time trying to cold call mid level executives who won't give me the time of day. They just don't think a quick printer should be offering them marketing services since many have a staff and equipment better than our little shop.

  6. I agree totally with this post. I left a company who relied on it's salespeople for nearly 100% of its sales leads; that company is slowly dying. I launched my own company with no immediate plans to hire sales people; instead, I hired a talented marketer who is helping us develop our brand, create valuable content, and design effective marketing programs to generate leads. From there, I believe we can move forward and build our business without having to resort to the old-world commissioned sales person approach.