This “Sales Statistics” slide has been making the rounds of LinkedIn and there seems to be some agreement that these statistics ring true. The statistics ring true for large organizations with a separate marketing division that helps generate leads that the sales organization does not follow-up. The statistics also ring true for small businesses where the owner is the “sales-in-chief.”
We are not talking about unqualified leads but qualified prospects. These folks might have filled in a form on your website, left their business card at your trade show booth, exchanged cards at a conference, already be your contact on social media with a demonstrated interest in your product or services. In other words there is at least one interaction, initiated by the prospect who thought that your product or service was of interest. Going by the simple AIDA model they had crossed the threshold of Awareness to Interest. Wow- that sounds upbeat and yet….not followed-up?
Here are some thoughts on why this lack of follow-up happens:
- There is no data tracking system: There is no system to keep track of the leads, prospects and generally the sales pipeline. Despite a whole array of CRM (Customer Relationship Management Software) and Sales Force Automation (SFA) software available. Some available for free.
- No data updates on CRM/SFA: When there is some sort of CRM/SRM system, even an informal Excel sheet, that data does not get updated. For example, you get a call from a prospect with a question that you answer- but forget to update your system. Larger organizations with salespeople on salary plus commission suffer a great deal from this one. Salespeople do not want to update stuff because they do not want rivals or bosses to know- till they close the sale. Meanwhile they forget to follow-up!
- Following up is uncomfortable: Face it, following up – even by email is tough when you have heard – “we are working on this” several times from a prospect. It seems far more comforting to call existing clients and try some cross-selling or up selling or engage in paperwork and internal co-ordination with production, finance etc.
Based on research by Sabnis, Chatterjee, Grewal and Lilien (2013) in the Journal of Marketing, organizations can do the following to improve chances of lead follow-up:
- Improve perception of lead quality: The key is that sales people must perceive the difference in the quality of leads. Say you have a hundred business cards from visitors to your trade show booth. You must have a method of scoring leads that differentiate between those who are quick wins (must contact next week) and those that might eventually buy.Sales meetings should emphasize why some leads are high quality and if your sales people understand and buy in, it would galvanize your sales force.
- Avoid micromanaging sales people: Even if you have a sophisticated cloud based CRM/SFA system, avoid the digital temptation of peering over the heads of your sales team. The research suggests that while inexperienced salespeople are more willing to be micromanaged the experienced folks actually resent it. Probably this resentment leads to avoiding updating the system on part of the sales team.
- Quantity of leads less important than quality of leads: If you believe that your sales cycle is long then lead quality is more important than quantity. Your lead quality also helps the sales team focus. Factor in any leads that sales force members bring in as the "ownership" of such leads tends to be higher.
Understanding why sales prospects are not followed up and then taking some steps to facilitate your sales force can help. Contact StratoServe