Why Salespeople Don’t Follow Up on Good Leads

We are excited to welcome Michael Boyette as our guest author today. Michael is the Executive Editor of Rapid Learning Institute and editor of Top Sales Dog Blog.

The number-one issue in Sales and Marketing alignment can be summed up in three words:  “These leads suck!”

No matter how much effort Marketing puts into delivering high-quality, actionable leads, most salespeople remain convinced that marketing-generated leads are lousy.

The problem usually isn’t the leads, however; it’s how salespeople follow up on them.

Let’s look at a typical experience from the salesperson’s perspective. She gets 100 leads. Marketing promises that these leads are Glengarry Glen Ross golden. The tire-kickers have all been screened out. Each is an inbound lead from someone actively looking to buy – prospects who called the toll-free number or clicked on a web page asking for information.

So she blocks out precious hours – hours she’s taking away from existing customers and deals already in the pipeline – and starts calling.

By the time she gets to the bottom of the pile, she’s won exactly two sales.

Next month, she gets another hundred leads and gets the same results. The month after that, she gets another hundred. But by now she’s not getting any sales from them – because she’s shoving them into a shoebox under her desk and ignoring them.

45% of leads end up buying

Here’s a statistic that would surprise reps like these – and might surprise some marketers as well: about 45% of business-to-business leads, that is people who’ve inquired about a product or service, will end up buying. (Business-to-consumer leads tend to close at an even higher percentage: typically, 55 to 60%.)

So where’s the disconnect?

Well, let’s go back to our salesperson and see. Out of those first 100 leads, assume that 45 will eventually buy. Not all of them will buy from our salesperson, of course – let’s say her closing ratio is about 33%. So out of those 100 leads, she’ll have 45 sales opportunities, and can expect to close about 15.

But here’s the problem: Reps often underestimate how long it takes for those leads to turn into sales.

Most reps would tell you that if 45 purchases are eventually made, the buying behavior would look something like this. After all, leads become stale, right?

In fact, the behavior looks more like the purple line in the second chart. About four will buy in the first month; about the same the second month, and so on:

It makes sense if you think about it. A buyer could be anywhere in the buying cycle when the rep calls. Some are ready to make a final decision. Others are just beginning to explore their options.  In other words, out of those 45 opportunities, only about 4 will be ripe. The rest are too green to pick.

And unfortunately, a “green” lead can look like a bad lead. These prospects aren’t really focused yet. They don’t want to set up an appointment or talk about next steps. It’s easy to assume they’re not really serious buyers. But they will be – once they ripen.

Don’t throw away green leads

The worst thing our salesperson can do with green leads is throw them out and start over with a new batch. She’s already done the hardest part – making contact and establishing a connection. Now she needs to cultivate those opportunities.

But she probably won’t.  Believing that the leads have gone stale, she puts them in the “when I get to them” file – and never gets to them. So she doesn’t get those 45 sales opportunities. She gives up after a few months and maybe gets only 8 or 10–which only reinforces her belief that the leads were lousy to begin with.

Often, this kind of scenario is exactly what happens in the real world–effective follow-up only happens about 25 percent of the time.

What does this mean for marketers? You have to work closely with your sales force to make sure they understand how leads continue to ripen. And you need their buy-in to keep following up on those leads, so that you both can get an accurate idea of how those leads perform over time. Do that, and Marketing and Sales will be pulling in the same direction at last!

Related Resources

  • http://twitter.com/BSecka Ben Secka

    Great article. Never knew about these statistics, provides great insight for sales and marketing alike. Maybe the infamous disconnect between the Marketing and Sales departments can be solved once and for all!

  • http://www.facebook.com/jonbatty689 Jonathan William

    Adding this to the favorites. Can’t believe I never knew this before… I am one of the “These Leads Suck” culprits. Going to have to try this out. Thanks Dayna and Michael!

  • http://twitter.com/TopSalesDog Michael Boyette

    Thanks Ben and Jon! Let me know how it works out for you guys. Ben, if you’d like to see the statistics it is on salesleakage, called the Rule of 45. Pretty interesting stuff!

  • Karl Kleinbach

    The 45% number of those that end up buying becomes even more compelling when you factor in that 65% of that group will buy from the organization that initiated the process raising their awareness of the need and nurturing them till they were ready to buy.

    Powerful really when you think how many organizations are currently fighting it out for the 35% that remain because they didn’t have processes and systems in place to win the confidence of the 65%. (Not certain source of 65% number, I know it’s a reliable source, I think it was SiriusDecisions).

  • http://twitter.com/pohstrom Per Ohstrom

    There is a lesson in here, somewhere, around lead nurturing and qualification. Maybe there needs to be more of a human element involved before a lead graduates into a prospect and is handed over to Sales?

  • fharms

    This is a bit misleading. Prospects with a trial product look like the assumed curve.

  • http://twitter.com/TopSalesDog Michael Boyette

    Yes, I heard those statistics before too. I can’t remember where, but I know I have seen them before. Definitely makes it more compelling, thanks for leaving the statistics I’m going to search around for them- I’ll let you know if/where I find them!

  • http://twitter.com/TopSalesDog Michael Boyette

    That is a good thought Per, and definitely makes sense. If we can nurture that lead until it is ripe, there may be more of a chance of winning the sale. I like it!

  • Bryan Shaw

    This is great. Looks like I’ll have to re-purpose this info for an internal audience. Quick follow-up results in higher likelihood to convert to a qualified Sales Opportunity. BUT Sales needs to keep working it and be patient for it to close.

  • http://twitter.com/2020socialmedia Jon Davey SMD

    Slowly, slowly catchy monkey comes to mind… sales folk tend to be hot to trot, ready, willing and able but perhaps a little too keen…. turn the conversation to simmer and you’ll not burn the source and ultimately more will materialise with a little patience… excellent blog post

  • Ed Skibbe

    Shouldn’t these leads be nurtured longer before routing to sales?

  • http://www.callboxinc.com/ Amber King

    Lead nurturing is important in sales process. The sales team should make sure that they follow up on leads otherwise it will turn into nothing.

  • http://twitter.com/ardath421 Ardath Albee

    The 65% is actually a Forrester statistic. “65% of buyers will choose the vendor that helped to set their buying vision”

  • Rizan Flenner

    The discussion about what is a lead often very much differs if you are working in marketing or in sales. While sales want to close deals Marketing in your example sees an interest as a lead. This gap in understanding of what is a lead between sales and marketing is very often driven by the conflicting goals but can be bridged.

    We need to do active nurturing, where possible marketing leads with nurturing activities like mailings, invitation to events and webinars etc.. and tracks the leads activity on these. This can be then fed back to the sales who can then tackle the top 10 again, as their decision process leads them closer to the stage where they want to be covered by sales!

Dayna Rothman is the Sr. Content Marketing Manager at Marketo. She runs the Marketo content initiatives and is the managing editor of the Marketo blog. Dayna has extensive experience in content marketing, social media, marketing automation, and inbound marketing. She has an MBA from Golden Gate University and lives in Oakland, CA.

Read Dayna's Blogs

Why Salespeople Don’t Follow Up on Good Leads

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