One of the most pressing challenges that sales leaders grapple with is how to effectively distribute leads to their sales reps. Historically, the default approach has been to assign leads based on specific geographic regions. The rationale? If sales reps are assigned to leads that are physically located near them, they can limit travel time and increase face-to-face interactions. Many organizations continue to rely on this age-old practice. According to research by the Bridge Group, geographic distribution has been the most common lead assignment method among SaaS companies in recent years.

Despite its ubiquity, the geographic lead assignment strategy has become obsolete in the current age. More and more of the buyer journey is transpiring online. According to Demand Gen’s 2017 B2B Buyer’s Survey Report, 78% of B2B buyers spend more time researching purchases than they did in previous years, while 75% of buyers use more sources to research and evaluate purchases. Buyers are self-navigating through the early stages of the sales cycle and are coming to the negotiation table more prepared than ever before. Because the bulk of the buying journey is now completed before buyers engage with vendors, being physically proximate to a seller or buyer isn’t as important as it used to be. What’s more, with the advent of technologies, virtual communication and demos can be equally effective when conducted virtually as compared to in-person.

If you continue to rely on geographic assignment methods, chances are high that your bottom line will pay a lofty toll. Redesigning your lead distribution methods can pay enormous dividends. When crafting your territory distribution approach, you should ask yourself three fundamental questions:

1. What is my relative focus on inbound versus outbound leads?

The most successful sales teams embrace different lead distribution methods depending on whether they are responding to inbound or outbound leads. In the context of inbound leads, many organizations benefit from round-robin distribution methods, whereby leads are evenly distributed to sales reps in a systematic way.

There are several advantages associated with the round robin approach. The “push-based” method results in the rapid distribution of leads. Several studies have shown that time is of the essence when responding to inbound leaders. According to research by insidesales.com in collaboration with Harvard Business Review, there’s a 400% decrease in the odds of qualifying a lead when sales reps respond within 10 minutes compared to five minutes. Rapid response times increase conversion rates and result in higher customer satisfaction.
If lead response time is mission-critical, an organization might even opt for the “shotgun connect” approach, whereby multiple reps are notified when a new lead comes in. The first to respond takes ownership the lead.

2. Do my sales reps have specific expertise?

Another limitation of the geographic routing strategy is that it fails to account for sales reps’ specific expertise. Different reps are more familiar with different industries and sectors. Reps with vast experience selling into a specific industry are more likely to be in tune with common industry-specific objections, workflows, and use cases. Darren Suomi, vice president of sales at HootSuite, explains, “Geographical territories tend to be unfair in how they are cut up as they usually have a concentration of certain types of customers. (i.e. NY & CA typically do better for Technology and Media)…. [If] a rep has a particular expertise from past experience they have the freedom to explore it without having to be boxed in by a territory.”

When responding to sales leads, successful sales teams tend to assign leads based on some specific characteristic of sales reps’ expertise. For some companies, this may be industry expertise (for example, technology or manufacturing). For others, it may be market segment expertise (for example, mid-market or enterprise). When reps specialize and become an expert in a particular niche area, they’re able to achieve strong rapport with customers. The more effective a sales rep understands a customer’s business and is able to speak the same language as the customer, the more effective they’ll be at building trust and loyalty. The phenomenon is explained by the “similarity principle”, which states that we like people who we perceive as being similar to us. According to Dr. Robert Cialdini, author of “Influence: The Psychology of Persuasion”, “similarity literally draws people together.” The results are transformative. Nick Hedges, SVP of Consumer Strategy at Ellie Mae, explains, “Our experience with implementing performance-based programs at a number of organizations is that a typical rep can more than double their lead conversion by receiving more leads similar to those that they have been found to be ‘skilled’ at converting.”

One of the greatest limitations associated with the round robin and shotgun connect approaches is that they don’t account for each reps’ specific areas of expertise or particular skill sets. While potentially the optimal strategy for handling inbound leads, these methods are unlikely to be optimal for handling outbound leads.

3. Are my distribution methods fair, for the most part?

Lead routing will never be 100% equitable. Some routing methods (for example, round robin) are fairer than other methods such as performance-based methods, whereby more lucrative leads are assigned to the most effective reps. Sales teams should strive to ensure that distribution methods are as equitable as possible. Several studies have shown that fairness or organizational justice is essential to maintaining high levels of morale.

Lead assignment and territory building is a tough nut to crack. The secret is to balance your desire for rapid response times with sales reps’ areas of expertise, all while ensuring equality. When you’ve decided how to balance the trade-off, automation is key. According to research by Velocify, companies utilizing at least one automated distribution method boast an 87% higher conversion rate than those that manually distributed leads. Automated distribution methods improve response speed and, in turn, conversion rates.

In addition to leveraging automated distribution methods, The most effective companies embrace multiple different lead distribution strategies. For example, companies may choose to route leads that express interest in a specific product or a specific feature to specialized reps via push-based methods. Alternatively, if leads express a strong buying propensity and high buying urgency, companies may choose to route them via a shotgun connect approach. Velocify’s research revealed that companies that rely on shotgun connect in addition to push-based distribution boast conversion rates that are 107% higher than companies not using auto distribution.

No longer can sales teams afford to rely on primitive lead distribution and routing strategies. While there’s no one-size-fits-all strategy, an ill-construed lead distribution strategy will wreak havoc on an organization’s bottom line. Conversion rates will be suboptimal and leads will fall through the cracks. By leveraging technologies such as Node to glean million of leading indicator data points that can inform how you distribute leads, embracing automated and complementary distribution methods, and implementing a robust workflow in your CRM system, you’ll be able to improve close rates and propel growth.

This article was taken from here.



Leave a Reply