Less is More: Why B2B Marketers Know Fewer Leads are Better

03/11/2011

Sirius Decisions released the results of a survey earlier this week that confirms what many B2B marketers already know but isn’t intuitively obvious for non-marketers – delivering fewer, higher quality leads beats simply trying to increase the number of leads coming into your pipeline.

This is an old argument between marketing and sales – sales wants more leads but marketing knows that it’s relatively easy to stuff a pipeline with mediocre-quality pseudo-prospects (and the moment we do, sales will immediately go all Glengarry Glen Ross on us and complain that the “leads are weak”). The definition of a “sales-ready lead” in my opinion is shifting farther and farther down the sales pipeline. People are perfectly capable of researching products on their own and don’t want to get a sales person involved in the process until they have done a certain amount of research on their own. Trying to insert yourself into the process before a prospect is ready is at best ineffective (prospects don’t believe much of what sales people tell them anymore) and at worst damaging (because you’ve now annoyed them to the point they no longer want to talk to you).  The other critical factor that this study highlights is that there is a limit to how many leads a sales rep can effectively handle and going beyond that may actually be damaging.

Key findings of the study:

Companies mandating tighter pipelines had a better close rate - Companies managing a pipeline of 3 times or less of their quota closed 40.5 deals out of 1,000 sales-qualified leads, compared to only 30.6 deals for those managing more than 4 times their quota.  Clearly the folks it the first group either weren’t handed lousy leads by marketing in the first place or they were finding ways to weed out the bad leads early.  Either way – managing fewer leads means the quality of the leads goes up.

Companies mandating tighter pipelines had significantly more reps at plan – About 57 percent of the 3X pipeline companies had at least 60 percent of their reps at plan or better, compared to only 37 percent of the 4X respondents. Put simply – managing fewer leads improves the productivity of your sales force.

Companies mandating tighter pipelines had more accurate pipelines/forecasts – Folks in the 4X group reported that “lack of predictability and accuracy” was their greatest forecasting issue more than twice as often as the 3X group.  Managing less in your pipeline improves your ability to predict what will happen.

This study should be a reminder to marketers that handing over under-developed leads to reps that don’t have the capacity to absorb them is a losers game.