The importance of sales lead generation and prospecting
I have in recent weeks been poring over dozens of published sales performance optimisation studies and white papers. The insights gathered from all these publications point to the importance of lead generation and prospecting, usually known as the top of the funnel activities in achieving sales success.
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For example, according to CSO Insights Sales Performance Optimisation Study – 2016 Key Trends Analysis, two out of the three top objectives sales leaders mentioned as priority to growth related to prospecting.
Topping the list is Capturing New Accounts - 58.4 per cent; and at number three spot is Optimising Lead Generation - 38.3 per cent.
Secondly, 53.3 per cent of sales organisations saw the inability to generate enough qualified leads as the No.1 sales challenge to overcome in order to achieve sales effectiveness in 2016. In addition to the above, another finding by CSO Insight show that although majority (46.9%) of companies’ deals that are closed come from leads generated by salespeople, however, 50 per cent of sales reps' time is wasted on unproductive prospecting.
With all these findings, it is shocking how little or no investment sales organisations make into training their salespeople in the area of lead generation and prospecting, compared to sales training which shows salespeople how to take a qualified opportunity through to close.
Here are seven reasons why lead generation and prospecting sales training is important to you salespeople:
Lead scoring is crucial to revenue success
According to a RainToday.com report, less than 25 per cent of new leads are truly sales-ready, so an accurate lead scoring system is crucial to revenue success. Consequently, lead scoring is useful in focusing salespeople toward their best prospects. In another study by CSO Insights, companies that meet or exceed the expectations in implementing lead scoring’s win rates as a percentage of forecast deals is 48.8 per cent and 55.5 per cent respectively. In terms of lead qualification, 80 per cent of top performing companies use leads scoring as part of their lead qualification process
Sales qualification and prioritisation leads to more win rates in sales
Companies that excel at prioritisation of accounts have a win rate of forecast deals that is 25.6 per cent higher than firms who struggle to prioritise; this is according to the CSO Insights – 2014 Sales Performance Optimisation (SPO) Study. It also reveals that salespeople who use prioritisation have 15 per cent higher contact and conversion rates than those who didn‘t. More importantly with regards to effectiveness, sales teams who prioritise their sales efforts are 18 per cent more likely to achieve revenue goals and 22 per cent more likely to meet or beat their sales quota. However, the study also suggests that 43.1 per cent of companies surveyed worldwide Need Improvement in their sales’ performance in properly qualifying and prioritizing opportunities, whereas 45 per cent of companies report that their sales reps need help figuring out which opportunities to prioritise.
Lead nurturing strategies lead to larger purchases
A number of studies valid the importance of lead nurturing strategy skills among your salespeople in moving their leads from a ‘No’ to a ‘Yes’. According to The Annuitas Group, “nurtured leads make 47 per cent larger purchases than non-nurtured leads” whereas a DemandGen report reveals that “nurtured leads produce, on average, a 20 per cent increase in sales opportunities versus non-nurtured leads.” In terms of sales-ready leads, a study by Forrester Research indicates that “companies that excel at lead nurturing generate 50 per cent more sales-ready leads at 33 per cent lower cost.” However, according to CSO Insights, 55.4 per cent of companies surveyed say they Need Improvement in their performance in nurturing promising leads for the future.
Leveraging trigger events to increase customer loyalty and improve sales forecast
A study by the Aberdeen Group reveals that, 63 per cent of Best-in-Class companies deploy formal trigger event tools among their front-line sellers.
Secondly, there is an increase in customer loyalty of two per cent better sales forecast prowess of four per cent, and a higher percentage of individual success by eight per cent among the sales team members who use trigger events compared to others who don’t. However, according to CSO Insights, few companies indeed are mastering the use of trigger events for sales analysis, whereas 50.5 per cent of companies surveyed Need Improvement in their salespeople’s skill to identify trigger events that indicate a likeliness to buy.
Thoroughly researching prospects prior to a call
Without the ability of your salespeople to get that first discussion with a lead, there is no progress in the various stages of your sales process. It is, therefore, important for salespeople to gain that first discussion with a lead to evaluate their fit or otherwise with your company’s ideal customer profile. However, CSO Insights reveals that 36.5 per cent of companies who achieve a lead to first discussion conversion rate of more than 75 per cent usually exceed expectations in their ability to thoroughly research prospects prior to call, compared to 23.5 per cent for those who just meet the expectation; and ONLY 18.5 per cent for those who Need Improvement. As many as 40.4 per cent of companies, it is believed, need improvement in thoroughly researching prospects prior to a call.
Reaching key decision makers
According to the Sales Performance Optimisation Study - 2016 Win More Analysis, getting to all key decision makers remains a challenge for most sales organisations with 48.0 per cent of them requiring improvements. As a sales leader, ask yourself how easy it has been for your salespeople to reach key decision makers. The fact is, very often, it requires the effort of yourself and other executive level management people with necessary contacts to facilitate that process.
Social selling is a source of the best quantity and quality leads
The Harvard Business Review has reported that customers complete 60 per cent of their typical purchasing decision before they speak with vendor or salesperson. Consequently, social selling is now one of the top three sources of the best quantity and quality of leads, and is easy to execute if you correctly implement the right tools.
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So where do you start? Contact us about our upcoming lead generation and prospecting training workshop for your sales team.
