The Sales Insider

Saw that lead metrics guru Trish Bertuzzi posted an answer to question on Quora talking about the most appropriate way to do sales lead routing.

And I thought I’d quickly chime in.

In the actual Quora question, the person asks, “What’s the most effective way to route leads?”

One of the respondents immediately chimed in to say that simply doing it by region makes the most sense.

In our experience, this isn’t the case.

For outside sales teams (read: when the rep goes on site), regional divisions make sense to save travel costs.

However, if you’re not engaging in on-site sales practices (and let’s face it, even those who do spend 70+% of the time selling over the phone/remotely anyway), the net benefit of regional-based sales divisions is nil, and can actually be a detriment if you’re sending sales leads to reps who are unqualified to handle them, simply because the lead falls in the rep’s “region,” or because a manager wants to do it ad hoc just to make sure things are “fair.”

Skill-based and vertical-based routing has the highest net benefit in terms of lead qualifications and closes, because reps have a leg up in identifying true prospect needs and establishing a trust-based relationship. Regional routing can be appropriate, depending on other factors, but on a simple win/loss close ratio, it has no measurable impact on performance.

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It’s been a long time since I’ve posted anything on this blog, mostly because I’ve been knee-deep in doing research, and working with clients. But I’ve decided to post today to talk specifically about one particular experience talking to a client about how much the InsideSales.com system had made a difference in their sales performance.

SEO business optimization experts OrangeSoda improved individual sales rep performance 300%, and started seeing three times the monthly number of account closes.

But just as much as the productivity gains (which I was naturally gratified to hear about), something else stuck out to me, which was that even before they started using the InsideSales.com system, they were doing a lot of things right. They had a good system in place to acquire leads and close sales. They had a great management team that had developed a scalable, repeatable process.

The problem was they simply hadn’t fully learned yet that most sales are won and lost at the top of the sales funnel, not the bottom. It’s not that their pipeline was non-existent or stagnant. They simply weren’t getting the results they could have because they hadn’t put enough focus on the lead qualification process.

From my research looking over data sets from companies like Reed Business, CSO Insights, Gartner, IDC, and Forrester, when it comes to the general process of lead management they all generally agree:

• Somewhere between 40 and 60 percent of all sales leads EVERYWHERE go uncontacted. Meaning, approximately half of all marketing dollars spent get wasted, not because the marketing department targeted the wrong people, but because the leads marketing produced were never given a chance to convert.
• Of all the leads that go uncontacted, 40% of them will buy from SOMEONE in their target space within 12 months—and 80% will buy within 24 months.

So why does this matter? Because based on our own research surveys of over 3,000 companies, 90% of businesses have no idea what this actually means for their sales process.

Consider:

• Based on our research, the average number of total lead qualification “touches” done by sales reps is less than four, and of those “touches,” less than two are actual phone calls.

• The average response time to a fresh, newly-generated lead inquiry is between 40 and 60 hours—even though key industry research shows that the best time to respond is in 15 minutes or less.

• 80% of sales happen AFTER the fifth contact attempt, and an additional 10-12% happen sometime after the tenth attempt—even though the average sales rep makes less than four total sales “touches.”

It’s mind-boggling but true: companies are losing up to half of their potential sales (and throwing away half of their annual marketing budget) because they don’t follow up on their sales leads fast enough, persistently enough, or intelligently enough.

Companies Take Too Long to Respond

The average company takes over 18 hours to send a first response to a newly-generated Web lead. 18 hours. And when that attempt happens, it’s usually an email, not even a phone call. The first phone call attempt? After 44 hours. (All this when industry best practices state that for the “hottest” of leads, response times should be 15 minutes or less.)

And to make matters worse, most companies make the mistake of emailing first, then calling, when research sponsored by respected business school SKKU in Korea shows that calling first, then emailing is 90% more effective.

A company that calls Web-generated leads within 15 minutes, follows up through some other medium (email, fax, voice message), then makes an additional 4-5 call “touches” and 2-3 media “touches” over a period of 10-14 days yields 300% more contacts. And if a typical sales process holds to form, more contacts naturally scales to more qualified prospects.

Companies Don’t Make Enough “Touch” Attempts

The Bridge Group has noted on numerous occasions that the average number of sales “touches” needed to contact a sales lead is somewhere around 7 (at last check 6.8 was the exact number). Yet as our aggregrate research data shows, the average sales rep makes a grand total of 3.59 touches—of which less than 2 are actual, live phone calls. Remember our numbers from above: 80% of sales happen after the fifth touch, and another 10-12% happen after 10 touches.

Very Few Companies—Almost Nobody—Follows Best Practices

So let’s review: companies need to contact “hot” leads fast (within 15 minutes), need to make at a bare minimum seven or eight touches to even give themselves a remotely realistic chance of contacting and qualifying a prospect.

But only 1.6% of companies, out of over 3,000 analyzed, made even four total touches on their leads. Even more disturbing is the number in the top right: during our research, 37% of companies never even responded to a sales inquiry at all. Ever felt like a company/sales rep didn’t particularly care whether they got your business or not? There’s a nearly 4 in 10 chance that it’s not just in your head.

We’re not trying to point fingers here. But the bottom line is if your sales team is struggling to make quota, and actual sales aren’t getting anywhere close to expected forecasts, it’s time to take a good, hard look at your lead generation processes, people, and technologies.

I’ve decided to lose 20 pounds in time for the American Association of Inside Sales Professionals Leadership Summit on May 10th-11th in Minneapolis, Minnesota.

I decided to do this while at the AA-ISP conference in San Francisco, and I noticed it was exactly 90 days from the San Francisco show on Feb 10th, to the May Leadership Summit on May 10th.

So here I go!

I weighed in at 237 and I want to crack the 220 barrier by getting down to 217.

I’ve decided to try MediFast because the meals are already made and it keeps my calories at 900 per day. Then I’m going to try to exercise 4-5 days per week by walking then working up to running. I’ve even got a weight loss coach named Marcy Bradshaw to kick me in the butt!

You probably don’t care, but what the heck! I’m bound and determined to counteract my “chest-to-drawers” disease (where my chest keeps falling into my drawers!)

So stay tuned for my tweets along the way. And I’ll see you in Minneapolis. And if you want, do it with me!

(This is my response to an article written by David P. Wallace of The Wallace Management Group)

David,

I like the table approach you have used to try and illustrate the situations by which you decide to use inside sales versus outside sales.

I wanted to add my observations to yours. As the President of InsideSales.com, I have the opportunity to observe hundreds of companies as they are in the process of starting or growing an inside sales team. More and more we are finding companies with bigger ticket items and higher product complexity being sold effectively by inside sales or remote sales teams.

In fact, taking the definition of inside sales as remote sales, we are finding that a majority of the time spent by an outside sales person is spent actually doing inside sales, or selling remotely. In looking at the table below, you can see I have noted that Bigger ticket items still benefit with a face-to-face meeting, but there are far fewer of them in the sales cycle, with much more meetings facilitated remotely.

Here is how I would modify your table:

Item                                                     Inside Sales            Outside Sales

Blogging keeps you on your toes… always looking for a good story.

They have come to me in the form of ice castles, current events, or good restaurants.  I just came from eating lunch at El Azteca Taco Shop in Provo, Utah that has been around since 1962.  Many of us from InsideSales.com go there several times a month now.  In fact, we like them so much, we had them cater our (after) Christmas party.

I remember getting a few tips that I needed to try this little taco shop just north of Provo High School. I had enough people mention it in the fall of 2010 I finally caved in.

Everything looked the same as other times I had gone, but Wow, the food had changed! I had been there several times over the years, but today things were VERY different. The food was decent before, but now it was out of this world.

Uniquely wonderful salsa

You know me, I had to find out why. There is always a story, so I asked.

Meet Carlos Rubio.

El Azteca Restaurant

He recently moved back from Los Angeles to manage the family El Azteca Taco Shop and to expand the catering business. He had spent over 10 years creating fabulous catering spreads in Hollywood with the likes of Wolf Gang Puck, The Patina group, and Off The Wall. He worked The Oscars, Grammy’s and many private events for the likes of Denzel Washington, Drew Barrymore, and Elizabeth Taylor. He created special menu items for Pedigree, Starz, Uncle Ben’s and Nissan.

His food is sooooo uniquely outstanding you can’t help but tell someone. Every dish is interesting, different, exciting. Everyone has tacos, burritos, rice and beans, but what about:

• Tropical Fajita Platter
• Acapulco Shrimp Enchilada
• Chicken Mole Platter
• Oaxaca Burrito
• Tropical Cactus Salad
• Jicama Slaw

Everything tastes great and each dish is unique.

That’s it! That is the primary ingredient of word-of-mouth.

Stand out. Be unique, wonderful, interesting, different, exciting.

And I’ll talk about you, and thousands of others will also. There is nothing better than word-of-mouth advertising and it’s never too late to go viral. (And this article isn’t just about tacos.)