Why Sales People Should NOT Be Responsible For Lead Generation

In an ideal world, sales professionals would be able to rely upon marketing-generated leads to meet their sales targets and quotas. Though the world is far from perfect, this still should be the standard for which we strive – for one primary reason – salespeople will perform better if you remove lead generation from their responsibilities.

Many businesses have a bias that favors leads generated by salespeople for a number of reasons, including:

1.      “People do it better,”

2. “Lead generation has to be done in person.”

3.      “Our specialty isn’t marketing.”

4.      “We can’t afford a marketing department.”

Many times, these reasons are legitimate. Other times, they are only partially true or simply pre-internet thinking (yes, that still exists).

People-based lead generation has the potential of being  more effective than marketing-based systems. However, people-based systems are ALWAYS more expensive than marketing systems. The fact is that people-based lead generation systems are wrought with waste. However, opportunities exist to find the marginal people-based lead generation systems and substitute them with a marketing process that will cost significantly less and may work better.

In general, a lead generation system that relies on marketing activities is more efficient than a system based on sales activities. Here’s why:

🔷 Marketing has only one job, to generate leads. Salespeople have several jobs – generate leads, nurture them, close them, do paperwork, attend meetings, etc. A one-use tool always does a better job than a Swiss Army knife.

🔷 Marketing is scalable; a salesperson is not.

🔷 Marketing doesn’t have personal issues or bad days

🔷 The average cost of a lead generated by marketing is typically much lower

🔷 The internet has changed the way people buy. “Sell” is a 4-letter word to the younger generations and even the older buyers frown on a process that seems salesy. In order to sell the way people want to buy, information needs to be delivered in a format which seems “safe” to the buyer (aka, not a salesperson).

🔷 Marketing effectiveness is much easier to measure

🔷 There are dozens of potential marketing methods vs. only a few person-to-person methods

🔷 Good salespeople can cover up holes in a value proposition. If a product or service cannot be marketed, perhaps there is a reason? Fix the value proposition will have a greater effect than subsidizing it with spectacular selling.

Your customers want you to spend their purchase money efficiently. This includes the cost of sales. If your sales systems are less efficient than the competition, you are operating at a competitive disadvantage.

Salespeople should not be responsible for lead generation

When salespeople are responsible for lead generation, they are in danger of treating all the steps involved in revenue generation as bland mixture of activities. To create revenue, you must find a prospect, educate and nurture that prospect, and then close the deal. When companies think of these discrete activities as “sales,” they tend to assign all these activities to a person. It makes sense, one task, one person assigned to the one task.

Top performing companies do not think of sales as one task. They see sales as a series of steps.

In phase one, you get the prospect to say, “Hey, I might be interested in that.” (a.k.a. a lead) Leads can be generated by salespeople (cold calling, networking, etc.) or by marketing. Marketing-generated leads are almost always cheaper and more predictable than salesperson-generated leads. If you currently are heavily dependent upon salespeople for leads, you have an opportunity to shift to more clearly delineate the “line” between sales and marketing by shifting to a more marketing-heavy approach.

Top-performing companies have taken this one step further and completely eliminated lead generation from the responsibility of salespeople. However, not all leads can be generated by marketing such as direct mail, internet, trade shows, etc. At some point, a human being must step in and interact with prospects. Because companies have a sales force of humans already interacting with prospects, it makes perfect sense to add the lead generation responsibility to salespeople. After all, it’s just an extension of their other responsibilities, right?

However, top companies have learned that serving two masters (lead generation and closing) typically leads to dramatically reduced performance. Plain and simple, top performing companies remove the responsibility of lead generation from the sales force. Here’s why:

🔷 Salespeople are rewarded for closing, so guess where they spend their time. What gets rewarded gets done.

🔷 Most compensation structures reward only for closed deals, not leads created. Therefore, there’s only indirect accountability for lead generation. The typical logic goes, “Well, they can’t close a deal if they don’t have enough leads. Therefore I don’t need to worry about the salespeople generating enough leads; it will self-correct.” Yes, it will self-correct, but only to the minimum threshold. When the salesperson has a problem, they will put in a spurt of work to generate leads, then go back to default mode. By creating singular responsibility for both lead generators and closers and results improve. Imagine taking one of your average salespeople and changing their reward structure and job responsibilities to only generate leads. How many more leads would they generate?

🔷 Average or poor salespeople are weak closers and even weaker at prospecting

🔷 Sales superstars are super-closers. It’s what they are best at, so they gravitate towards it (and its what they’re paid to do). Great salespeople will generate leads early in their tenure, but eventually, they fill the pipeline enough to focus on closing deals. Inevitably, the lead flow slows to a drip at this point.

🔷 It’s expensive. Salespeople have a more advanced skill-set than a lead generator (e.g., telemarketer, networker, etc.). If salespeople generated leads, they are not working at their highest and best use and are over-paid for their activity.

🔷 Undercover Boss Syndrome. If you have ever watched the television show, you have seen the million dollar executive go undercover and work in the factory. In one episode, the CEO is so inept at packing boxes; he gets fired. This CEO is perfectly capable of running a billion-dollar enterprise, but he can’t ship a box. Salespeople feel the same way. They want to do the high impact activities, not tape boxes (or cold call). They quietly feel lead generation is beneath them. We call cold calling “getting your face bashed in.” That might be a bit harsh, but it’s what it feels like too many salespeople. The average salesperson has 25 activities they could do today, why would they choose “getting their face bashed in?” There is a great telemarketer or lead generator who can and will “tape the boxes” more effectively and cheaply than a salesperson.

We hear a lot of “yabuts” that sound something like, “but I only have two salespeople, and I don’t have enough work for a separate lead generation person.” True; it’s easier for large companies with 100 salespeople to move 10 of them into lead generation. It doesn’t matter if it will be difficult to break lead generation responsibility away from the salespeople; it’s still the right move. It’s simply more complex at smaller companies. We assure you, there is a way to do it. We have done it many, many times.

Things you can do:

🔷 I'd bet that your sales pipeline is less full than you would like. Analyze where your leads come from. Go back one year and attach a lead source to every deal. How many of these deals have salesperson-generated leads? For many companies, it’s surprisingly low. This presents a big opportunity to move the responsibility.

🔷 If you have more than one salesperson, consider a divide and conquer approach. Is there a way to have some staff solely focus on lead generation (or primarily focus on it and be rewarded for it)? We have seen many two-person sales teams move the weaker closer into a lead generation role (or replace them with a lead generator) and allow the strong closer to work the deals. Results have been amazing. In some situation, lead flow has doubled. Double the number of leads you give your super-closer and sales explode.

🔷 If you only have one salesperson and simply cannot remove the lead generation responsibilities, separate the jobs as best you can with one person. For instance, you can:

1. Give your salesperson two jobs, lead generation, and closing

2. Set lead generation goals separate from sales closed goals

3. Set specific times for lead generation. For instance, one of our clients has the sales staff call prospects Monday/Wednesday/Friday and do onsite visits Tuesday/Thursday. If the sales staff is in the office on visit days, they are in the doghouse. If they are out of the office on prospecting days, the same is true. This prospecting rhythm and schedule doubled sales for this company.

How would you separate your sales professionals from lead generation at your company?