What is wrong with Lead Generation?

New Year brings a renewed focus on Lead Generation and New Business development. Unfortunately most salespeople (up to 50%) will be well short of their target. In most cases targets are reasonable, in line with remuneration and experience and most companies have good products and an effective marketing function. It is a classic situation and one that’s easily remedied.

So what is going wrong?

Systemic failure?

It sounds obvious but most salespeople do not want to fail. They want to hit their targets: professional pride, income (and sometimes jobs) are at risk. The vast majority of sales professionals work extremely hard to close deals. But securing business compromises other activities. Focusing (quite reasonably) on progressing opportunities means that there is no time to complete the important task of qualifying leads and booking appointments: salespeople fail to hit targets because there are not enough hours in the day.

In some organisations a reluctance on behalf of management to acknowledge this simple fact means that the business will continue to underperform.

Do the sums…..

Voicemail, receptionists and meetings can all cause delay but they are not the real reason salespeople rarely hit their target. Take the following example:

A new business salesperson, earning £40K basic and £20k commission. A reasonable target is 10 x salary i.e. £600,000 per annum. With 4 weeks’ holiday (not counting bank holidays) they will have 240 selling days.

Some basic assumptions:

  • Average deal value = £20,000.
  • It takes 2 meetings to close a deal and a meeting takes up half a day.
  • Proposals take half a day to complete.
  • Success (proposal to business is 1 in 3).
  • 3 out of 4 meetings result in a proposal.

In order to hit target the salesperson has to close 30 deals. With a 1 in 3 success rate, the salesperson has to produce 90 proposals and conduct 240 sales meetings (it takes 2 meetings to close a sale).

Just processing enquiries, conducting meetings and delivering proposals will take 180 days. Leaving only 60 days to book meetings. A working target for most telemarketers is 60 calls a day of which they will speak to 10 decision makers and book a meeting with one (i.e. 60 meetings instead on the required 120).

The example above makes generous assumptions and still the salesperson is only likely to hit 50% of target.

The simple solution

Achieving your targets is not rocket science: you just have to conduct enough sales meetings. Invest in resources (either external or internal) that can secure meetings and your sales team will start to hit their targets.

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