Who gets the biggest slice?
Imagine you had a finite resource – like slices of pie around the dinner table – and you had to determine a way to distribute them in the most effective way. You want to make sure the hungriest people get the biggest slice of pie, but you also want to ensure everyone feels treated fairly. Any unnecessary bias, and the annual family feud starts. You could choose to distribute the pie equally, giving each family member the exact same size slice of pie. But everyone knows that Grandpa deserves the biggest slice – he can eat pie better than anyone!
Usually Grandma settles this fight, somehow knowing exactly the right way to cut that cherry pie for everyone to be satisfied.
Sales managers face this dilemma every day when distributing leads to sales reps (but without Granny’s uncanny ability to get it right). Every organization needs to maximize the effectiveness of their sales team by having the best person respond to fresh leads as quickly as possible. There’s a ton of ways to get leads in the hands of salespeople, from manually emailing them to using complicated algorithms to distribute each lead perfectly. In this post we dive into the many ways out there to divvy up leads to a sales team so you can get an idea of what might work best for your company.
Does it really matter how leads are distributed to reps?
Absolutely. It’s been proven that some methods have a noticeable positive effect on conversion rate. Velocify, using hundreds of data points across numerous sales organizations, found that organizations using auto distribution methods experienced a conversion rate 87% higher than the average of those who choose to manually distribute. If autodistribution methods are layered together to use more than one method at a time, Velocify found that conversion increases 107%
Why does the distribution method make such a big difference? There’s two main factors – speed and compatibility.
Speed: most salespeople know how important it is to respond to leads quickly. Online leads can go cold within just 90 minutes. A famous HBR study found that decreasing response rates to leads to under an hour led to 700% increase in conversion rates for sales teams. Automated distribution methods gets leads and the relevant information into sales reps hands fast.
Compatibility: refers to getting the right leads into the right sales reps hands. If you distribute by region, language, potential deal-size or industry, you’re improving the compatibility of your leads. High compatibility means that the sales reps who are responding to the leads have the right information and skills to qualify and convert. Dr. Robert Cialdini refers to the phenomenon of people being more likely to buy from people similar to them as “Liking.” Grouping leads with similar features and sending them to the best possible rep for that type of prospect provides a higher likelihood of the the sales rep forming a relationship and making a sale. They will also learn common pain points, vernacular and affinities of that demographic. If your lead distribution method doesn’t take any of this information into account, you could be hampering the effectiveness of your sales team.
What kind of distribution methods are available?
It’s easy to underestimate the number of methods available to sales teams today. Enterprise sales stacks have evolved enormously in the last few years, which means the world’s your oyster if you want to try something newer than manually emailing new leads out. We’ve highlighted some of the most popular methods below.
Push Based Lead Distribution
The name says it all – Push Based distribution is where the system automatically assigns leads to the sales rep based on specific criteria. Let’s head back to our pie sharing analogy to illustrate some of these methods.
Round Robin – every family member receives a piece of pie in order, until they are all so stuffed, they can’t move.
- Pros – The round robin method is very easy to understand, and there’s no surprises involved. It’s inherently “fair” meaning that everyone will get exactly the same amount of pie (or leads). Because you’re sharing the workload evenly, response rates should be quite uniform and quick.
- Cons – While it’s easy, it might not be the most effective. You’re not taking into account specializations, availability or the performance of specific reps. This method does not optimize for conversion. Pushing leads without any other conditions also decreases competition between reps, because everyone on the floor knows that leads are coming their way, no matter what.
Top Producer – the family member with the biggest paycheck gets the biggest piece of pie, down to the family member who contributes the least. This means that freeloading lazy uncle of yours isn’t going to be stealing anyone else’s well-deserved slice of pie!
- Pros – When you’re favoring your best salesperson, it means that more leads are put in front of your top reps. It also rewards good work – the more you close, the more leads you get. It consistently rewards good performance.
- Cons – It can create a positive feedback cycle. The top producer gets their choice of leads, so they keep closing more deals. The under performers may feel like they are digging their way out of a hole and team morale can decrease. It can also be slower than other methods, because your top performer can become a bottleneck to responding to incoming leads.
Region Specific – the entire family is divided into separate tables based on geography, and each table gets their own pie to distribute amongst themselves.
- Pros – Breaking up leads by region creates a sense of ownership and encourages reps to form relationships and prospect long term. Time-zones, localization and language needs are easily managed. It’s also easy to implement, and creates very little confusion within teams.
- Cons – Some regions may not be as lucrative, which means reps will see disparity between teams. There are also fewer reps available in each area, so response times could decrease in a busy region.
Pull Based Lead Distribution
This method allows sales reps to pull their own leads at their own pace. Nothing is auto assigned, so accountability lands solely on the reps to work quickly and efficiently.
Cherry Pick – each family member can browse the slices of pie available, and take what they would like to eat.
- Pros – Cherry picking usually makes sure the most enticing leads get responded to quickly, because they are most likely to get pulled. Reps can manage their own workload so there are no bottlenecks, and special skills or knowledge can be applied. Competition is high!
- Cons – While the top leads get pulled quickly, those that aren’t initially appealing can be left to the bottom of the barrel. Leads are valued less the longer they go unclaimed.
Blind Pull – each slice of pie is covered with a lid, hiding the size and type of pie. Each family member can pull as many anonymous slices of pie as they would like, and go back for more if needed.
- Pros – Because leads can’t be prospected before being claimed, all leads are valued the same. Reps can manage their own workload, similar to Cherry Picking, so there are no bottlenecks.
- Cons – Allowing reps to choose their own leads can create a “work at your own pace” culture. There’s little control or matching to skills and specializations.
Shark Tank – as they are prepared, slices of pie are placed on the dining table in front of multiple family members. Family members lunge across the table to grab the slices they want to consume. First one with a hand on the plate gets the pie.
- Pros – A shark tank drives competition through the roof. It makes sure every lead gets responded to immediately, as anyone available will attempt to claim the lead. It’s also quite fair – if you snooze, you lose.
- Cons – Multiple reps get notified (via phone, email or pop-up) even though only one gets the lead. If competition is too high, morale can decrease for those who aren’t able to claim as many leads.
Shotgun – the pie is offered in a round robin format to all family members until one accepts it.
- Pros – The minimum number of agents are notified before the lead is accepted, so reps can focus on their own pipeline. Competition is still high, because no rep is “guaranteed” a lead. Leads are still called within minutes.
- Cons – Shotgun is slightly slower than Shark Tank method, because a lead may have to be rejected by a few agents before it’s accepted.
If neither Push or Pull based assignments are ideal for your team, consider a hybrid option. For example: using a push based distribution method for just inbound leads if your SDRs work both inbound and outbound leads.
- Pros: you can take the good and the bad from both Push and Pull distribution methods. Pushing leads increases response time, and ensures all leads are responded to. Competition remains high, because efficient workers are able to pull more leads later.
- Cons: it can be confusing to implement, where sales reps aren’t clear on why certain leads are pushed to them. If not done correctly, it can leave a pool of leads with a slow response time while pushed leads are worked through first.
Manual Lead Assignment
Sometimes, Granny really does know best. If you’ve got a young sales team, or require really specific assignments for your reps, you might want to take complete control over lead assignment. It does create a bottleneck when it’s being assigned though, so it’s typically a lot slower than any of the methods above. However – if it makes your sales team more effective in the long run, the sacrifice in speed may be worth it.
How do we choose the best lead distribution method for us?
With all the options of lead distribution, it may seem impossible to choose one. However, no one distribution method is inherently right or wrong – it depends entirely on your organization’s goals, culture and selling process. You’ll need to evaluate what sacrifices you’re willing to make for speed or compatibility. It’s possible that you may have to try multiple methods before implementing the optimal strategy for your team.
Ultimately, the best method depends on what works best for your team. What method will allow them to respond the fastest and close the most efficiently and effectively. Keep on testing and automating as you scale – what works at two reps won’t stay true with 20. The perfect lead distribution method isn’t always obvious. Test, optimize, and retest.
We want to know what you’re using. How are you currently managing your lead distribution right now? If you had to test a theory, which method would you like to incorporate next?