The Facts about Sales Leads

by Richard W. Erschik

Fact 1.  In the year 2000, $345.8 billion dollars were spent on print advertising, trade shows and the Internet in the United States.

Fact 2.  The number one objective of advertisers and exhibitors is to generate sales leads in hopes of identifying new business selling opportunities.

Fact 3.  Only 11% of raw sales leads require immediate personal contact by the sales force.  Mainly because most sales leads are not from qualified sales prospects.  Instead, they are from tire kickers, literature collectors, competitors, dealers, distributors, and existing customers.

Fact 4.  The typical lead handling procedure in companies today consists of sending expensive literature packages to everyone that inquires.  Then, all of the leads are distributed to the sales force for their ultimate determination of value, qualification, personal contact and follow-up.  Bear in mind here that most of these raw sales leads are from non-prospects.

Fact 5.  If that is what is done with the sales leads, it is proven that more than 65% of the literature that was mailed, arrives late, is incomplete, or was otherwise wasted on non-prospects at the national industry cost of $10.75 per literature package.  Further, more than 70% of the raw leads go totally un-contacted by the sales force, while 43% of the 70% are proven to buy what they inquired about within 13 months of their inquiry.

The marketer’s paradox in the above regard is this.  Billions of dollars are spent to generate sales leads.  Most are of poor quality.  The literature sent in response to the leads is mostly wasted on non-prospects at a huge expense.  The sales force doesn’t follow-up the leads.  And nothing is measurable or cost justified.

Fact 6.  Measurement and cost justification of the marketing expense lies in the results (the leads) not in the activity of generating them.  Consequently, follow-up of sales leads is critical to the overall marketing program’s success.

Simply stated, the objective of “branding” is fine but it doesn’t pay a sales commission.

To briefly address the sales force’s problem in following up sales leads, the fact that they aren’t doing it is not their fault.  In fact, it is impossible.  Why?  Because in today’s world, considering the proliferation of voice mail systems in companies, it requires 3.4 telephone-dialing attempts to reach anyone for anything.  Further, it requires 7.6 telephone-dialing attempts to identify a sales prospect with an immediate or near future purchase potential.  That being the case, 100 sales leads require 340 telephone calls just to make contact and find that 89% are of non-prospective sales value.  Worse, it would take 760 telephone calls to find the Ready Buyers.  Would you spend this non-productive time if you were in sales?  Not hardly.

Fact 7.  Sales people simply don’t have time to do the necessary qualification of sales leads to find the Ready Buyers.  Therefore, they are forced to call on their existing customers in hopes of the 80/20-rule realization.  Consequently, they are forced to ignore the sales prospects that billions of dollars are being spent on to generate.

In summary, in-house sales lead management is simply not working in companies today.

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