by Sreeram S. & Arjun S.K
These are the new leads. These are the Glengarry leads. To you, these are gold; you do not get these. Because to give them to you would be throwing them away.
Blake, played by Alec Baldwin in Glengarry Glen Ross (1992)
A sales manager has several important matters running through her head while leading her team. These could include the pep talk that she has to give on the day. It could be about reporting the latest sales figures to her immediate superior and the spin to give it, if she is foreseeing a difficult conversation. It could be about the pricing for a large customer to get them to commit to a purchase. The decision could also be about who to hire from the three candidates that were interviewed the previous week. While these are all critical decisions, a decision that does not strain the apparatus is to allot the latest hot lead she might have just received, to a member of her sales team.
There are many organisations which have tackled this problem by assigning exclusive territories or segments to salespeople. It is also well understood that leads generated by a salesperson are pursued by the self-same person. They do not belong to the category of leads which fall to the sales manager to allocate.
The leads that fall to sales managers to distribute could be the result of a high voltage marketing campaign or passively generated by a website. They could also be garnered at a trade show or bought from partners or database providers. Leads that come as inquiries from prospects (also known as inbound leads), are amongst the most sought-after resource by salespeople. In the classic movie Glengarry Glen Ross, the title referred to a set of high-quality leads which play a crucial role in the movie. Those leads were supposed to be given to “winners” and not to the bunch of “losers” in front of Alec Baldwin’s unforgettable character.
Another highly sought-after lead is the one from top management. The leads from top management are usually considered “done deals”, especially because most of the selling would already have happened. These leads usually come from members of the C-suite interacting with prospects in circumstances which are unique to the C-suite members. These could be first class or business class cabins in flights, clubs, golf courses, social gatherings, page 3 parties or anyplace which is unlikely to see a regular salesperson. The softening up of the prospect is inevitable in such situations and the resulting lead is considered red hot. This has been acknowledged by several businesses including Private Banks and Investment Banks which ensure that their salespeople never fly coach and can borrow the lifestyle of the rich and famous while in their sales roles.
All leads, as the earlier discussion argues, are not equal. This article is about how managers should attempt to allocate these valuable leads. There are several ways to accomplish this task, each with its set of pros and cons, some of these methods are outlined below:
1. To the best salesperson in the team — This is a common enough practice and is easy to defend for a sales manager since this increases the probability of success and reduces the chance of the lead being wasted.
2. To the most experienced salesperson in the team — This is again a variation on the first method since there is a tacit acknowledgement that the most experienced salesperson is likely to be a very good salesperson.
3. To the salesperson with the highest targets — This is a deliberate attempt by the manager to support the salesperson who has a challenging task and who is taking one for the team.
4. On a round robin basis — This is considered a democratic manner of allotting leads.
There are times when a manager might decide to handle the lead by herself but will need to finally give the credit to a salesperson, especially in situations where managers do not have personal sales targets. Giving credit will involve allotting the lead using the methods discussed in this article.
There are pros and cons of the different approaches mentioned above. The first two methods increase probability of success and can be easily defended by the sales manager to her superior. These are, however, difficult to justify to salespeople. Salespeople (the weaker performers and less experienced), who do not get these leads, might be justified in feeling aggrieved and demotivated by such practices. This could lead to a vicious cycle of bad performance amongst the lower performers in the sales team. And in the longer term, this will hardly deliver desirable results for managers.
The third method is also difficult to justify since it is the result of a badly set target or a poorly performing sales person. So, one bad practice is being compounded by another questionable practice. The round robin method may be democratic but could lead to issues where the sales manager may have to explain the loss of a promising lead to his superior. For this to be successful, the organization needs to embrace a culture of democracy and egalitarianism. However, if the same organization is result-oriented, like most are, then the sales manager may be justified in asking how he can be held responsible for results if he is not given the autonomy to take decisions. Additionally, every manager must ensure that each of their front-line sales personnel undergo routine training and are equipped with the necessary skill-set required to tackle any type of lead.
While the methods above are in some way following a stated logic, sales managers rarely use these. Sales managers use more subjective methods for such allocations. Some use leads as rewards for completing a task or achieving a difficult goal, while others may allocate leads based on certain biases. Leads are also a way for bestowing favour and become a tool for establishing control. While organizations may dither from establishing firm policies for allocation of leads due to a policy of enhancing manager autonomy, there could be short-term and long-term negative consequences of leaving such decisions to managers. Central sales leaders may feel that the local manager is in the best position to take such decisions which seem purely tactical in nature. This may not be the most optimal approach since such policies may result in sales managers slowly but surely vitiating the culture in the sales organization.
There is thus a Hobson’s choice in front of a senior sales leader, should she mandate a democratic method or leave these “minor” issues to the first line sales manager?
The choice of method is a function of the culture that leaders wish to see in their organizations. Organizations which wish to propagate a democratic culture need to state a policy and ensure adherence. In most organizations today, several sales force control systems are centrally formulated and implemented. These include the target setting process for salespeople and the incentive programs. There is no reason for such organizations not to embrace a centrally administered lead allocation process.
An algorithmic lead allocation process can optimize for results while keeping the sales manager free of the labour and the adverse consequences of sub-optimal allocation. The algorithm could be developed based on the past results on leads and can be enhanced with the help of sales response functions. The leads generated by salespeople themselves and the results thereof should also form an input into the algorithm. The resulting decisioning system can help in allotting leads based on the highest probability of success. The firm can thus capitalize on a salesperson’s unique knowledge, experience and familiarity with a prospect (or businesses similar to that of the prospects). While the algorithm may still lead to certain heartburn amongst salespeople, the ire will no longer be directed at the sales manager.
The output of the algorithm may need to be constantly monitored for implicit biases. And a policy needs to be formulated to avoid these biases. For instance: if the algorithm seems to favour salespeople with better sales performance and if the management feels the need for a more egalitarian system then the logic may need to be tweaked.
The logic of allotting leads to specific salespeople is seldom mentioned in sales management literature and rarely discussed in sales seminars. This is an area which has seen very little research and sales leaders do not stay up nights thinking about the method to be used unless there are some egregious instances of leads going wasted.
Allotting leads to salespeople can no longer be considered a minor decision to be left to the whims and fancies of a sales manager, however competent that person may be. Firms need to realise that they are communicating a culture and the organizational ethos to their salespeople through these policies. Formulating a transparent policy and using an algorithm to allot leads may build much-needed salesperson confidence in the firm.
Disclaimer: The views expressed here are in the authors’ personal capacities and do not represent those of people, institutions or organisations that the authors may be associated with in professional or personal capacities.