Maximizing Sales with Lean Production and Lead Management

Maximizing Sales with Lean Production and Lead Management

In a recent conversation with a friend from the auto industry we got into a conversation about lean production. It occurred to me that there is something to be borrowed from this methodology to increase sales efficiency and production levels.

Lean production, a methodology that was originally developed by Toyota, captures the concepts of minimizing inventory, maximizing flow, pull production from customer demands, and continuous improvement. These principles become interesting when they are applied to lead management–particularly the minimization of inventory (marketing generated leads) and maximization of flow (sales production) with the implementation of a “pull” system.

A “pull” lead management system that reacts to the demand of the user for the next lead directly affects sales conversion rate. The combination of minimizing the necessary inventory of leads and maximizing the throughput of sales actions will increase sales performance. The question is how does this combination outperform the traditional paradigm of pushing leads to a sales force? Here is how I present the argument for a lean pull system versus a wasteful, low production push system.

Sales Tempo

I debate the general belief that a push system more quickly gets a lead to the right person. In fact, if the organization is managing their lead to sales capacity the timeliness in getting to a lead should be equal on both systems. I have always maintained, even when I was running high performance sales teams, that throttling lead distribution based on productive performance (taking action on leads) and ensuring that leads do not drop into “dead” queues was the key to my success. So, in selecting a push versus pull lead management system is typically a commitment to a certain sales tempo. A push methodology will lend to sales people expecting leads to be “given to them” and in my experience a lower regard for aggressively responding to customer inquiries. In contrast, a pull methodology creates an expectation that every lead is “earned” by meeting the last customer’s needs or at least responding quickly to their request. So, in creating high velocity sales teams the edge goes to the push methodology.

Time to Initial Contact

Although I concede that in sales organizations where the sales velocity is already high there should be no difference in push versus pull in regard to time to contact. There is still, in the push system, the opportunity for the dreaded “dead” queue. Inherently, the push system allocates each lead to a user on the system. However, is that user logged-in, or is he or she on that well deserved two week vacation, or do they even still work at the company? In a push system you had better be very active in user management or you may allocate valuable leads into “dead” queues and once allocated they can be very difficult to see–a very expensive mistake. The last sales shop I ran we had thousands of sales people and a push system. Managing that many sales people can be daunting, especially with the typical high rate of turn over, but at this scale it is nearly impossible. My experience is to routinely finding hundreds of leads in “dead” queues–that equals thousands of lost dollars and hundreds of disappointed potential customers.

Pipeline Management

Pipeline management, the nurturing and cultivating of leads, is one of the most critical components of the conversion equation and the area where push versus pull dramatically differ. In the push system, leads are put into queues and it is entirely up to the sales person to effectively manage their pipeline. What happens in the average case is you hope the sales person calls the lead even once. Much less than the 5-7 contacts it generally takes to close a lead. In contrast, the pull system continually forces pipeline leads back to the sales person until a final disposition is reached; compelling the 5-7 contacts. Add to this the power of an intelligent lead selection engine that is continually allocating the next best lead and you have guaranteed conversion rate lift.

Sales Process

One final critical factor in increasing sales velocity and conversion is the consistent and disciplined sales process. The difference between the two methodologies is once again about enforcing tempo. The push approach puts a lead in a sales queue and hopes the sales person does something that acquires that customer (note the lack of accountability in the sales process). The pull system compels the sales person to annotate and disposition every lead in order to “earn” the next lead. This creates the consistency in the sales process and feedback for team leaders and marketing.

So fundamentally, the push versus pull debate is one of sales velocity. The pull method will always produce more sales and higher conversion, maintaining an accelerated sales tempo. The method inherently enforces this behavior in organizations committed to high performance sales teams.

Obviously, the pull lead management system has significant advantages in minimizing lead inventory and maximizing sales production. If you want a push system use your email inbox. If you want to improve your marketing ROI and increase your sales production then get a pull lead management system.