Part 1 of a 4-part series on features, myths, best practices and thoughts on the future of Lead Management Software.

A little background:

Software is dying. Implementing lead management is less about buying software than it is about implementing a SOLUTION. What’s the difference? Software is a platform to create products and solutions, while a solution is a proactive approach to improving your business. I wrote this post to highlight best practices and features of the ideal Lead Management Solution.

Lead Management is still a new field that is far from maturity. Because of this there is a lack of understanding of the key functions and approaches to Lead Management. Lead buyers have become increasingly sophisticated in regards to evaluating leads, but are often less prepared to evaluate an LMS. This series is intended to clear up common misconceptions and stimulate debate among other experts about best practices and the state of the industry.

Lead Management Software Solution Part 1:
THE LEAD DISTRIBUTION METHOD

There are several distinguishing features among LMS companies but the most important involves the way in which leads are distributed to salespeople. Each LMS solution employs a slightly different distribution method, varying in terms of what triggers the lead to be funneled to a particular salesperson, the number of distribution attempts the system can make when a lead is not worked, the speed of lead delivery, and the overall sophistication of the logic that underpins routing and re-routing of the lead.

There are three main types of distribution programs in use today, Push, Pull and the combination of Push/Pull.

PUSH

Push distribution is the original method for lead delivery and the oldest, most vetted method for delivering lead quickly to salespeople. Push distribution routes leads to the appropriate salespeople, team, or division, instantly, based on YOUR criteria and settings. A simple example of Push distribution could be: leads from State A are automatically routed to Salesperson 1, while leads from state B are automatically routed to Salesperson 2. Of course push distribution can be much more advanced than this, with some LMS systems able to create an almost unlimited number of distribution and redistribution rules to maximize efficiency. Push distribution focuses on helping you contact leads before the competition does.

COMMON MYTHS
One prevalent myth about push distribution is that leads often get routed to empty desks, or that sales people are not attentive and the leads grow stale. This is not true.

Good push distribution systems know when salespeople are ready for a new lead. Push systems track when salespeople are available, busy, or away, and intelligently distribute leads to the optimal salesperson at any given time. Push distribution allocates leads to working salespeople and notifies them via text message, email or pop-up that another fresh hot lead has just been assigned to them. Based on distribution rules, push will reliably distribute and re-distribute leads across your organization, in real time.

FAIR CRITICISM
Some outdated Push systems only incorporate a single distribution. Single distribution runs the risk of a lead sitting idle if a salesperson is tied up or suddenly has to leave work. Cutting-edge Push systems automatically monitor and redistribute leads if they are not being followed up on appropriately. In addition old leads can be automatically recycled to new salespeople to help get the most return out of your investment.

PULL
Pull distribution allows salespeople to decide that they want a new lead and press a button or go into a central location and receive a new lead. Some Pull systems allow salespeople to choose their lead from a list, while others automatically assign a new lead. Typically there are two kinds of common Pull systems. The first allows you to preselect the lead criteria a salesperson can pull from. Similar to our example from Push, Salesperson 1 might only be allowed to pull leads from State A. The other common kind is a totally blind pull where the leads are assigned at random. There is considerable debate over how much information you should allow salespeople to see when they are pulling leads. I think allowing some criteria to be preselected can be useful when geographic targeting or propensity to close is desired. For example, companies with a huge volume of old leads should help their salespeople prioritize their work by making information available based on factors like geography, quality of contact information, requested loan size, or other factors.

COMMON MYTHS
Many people preach that Pull systems force sales teams to work harder and reward eager, hard working, salespeople. In fact, Pull systems do advantage proactive salespeople, but this is often more of a hindrance than a benefit. Pull systems setup the “inverted pyramid”–efficiency loss due to weaker salespeople taking too many leads and working them ineffectively. Meanwhile the best salespeople spend more time working tougher leads and thus get the short end of the stick.

FAIR CRITICISM
The effectiveness of Pull distribution depends on the quality of the decisioning engine behind the distribution of leads. Don’t choose a pull program that does the thinking for you. The “blender” or “black box” kinds of distribution only make sense for the smallest and least sophisticated organizations. Be sure you can select filter criteria and customize your LMS. Also, don’t invest in a system that only allows you one distribution program, they are weak and do not provide you the ability to tailor your shops needs and solution. Pull can be especially frustrating for organizations which receive leads of varying cost and quality. Under those circumstances salespeople quickly learn to keep asking for new leads until they get a high quality (easy to close) lead—completely ignoring lower quality leads, which require more work, and can lead to needless waste and a low ROI across the board.

COMBO PUSH/PULL
The most flexible and complete LMSs offer the ability to employ a combination of Push and Pull distributions. This kind of LMS is the best choice for any organization with more than a handful of salespeople and that are committed to taking advantage of Lead Management best practices. Push/Pull will produce significant efficiency gains over an exclusively push or pull distribution, and allow the most customizable workflow. Push/Pull also rewards efficient loan officers allowing them to keep leads being worked, while simultaneously allowing a different group of leads to be selected by proactive salespeople. Every sales team and organization is different; this combination gives you the greatest chance to tap into the Best Practices within your firm and industry. As your industry changes and your business grows the power and flexibility of a Push/Pull system will be invaluable.

COMMON MYTHS
Frequently Push/Pull is viewed as overly complex. There are certainly more options to chose from with a Push/Pull system, but a good LMS provider will help you implement best practices, rather than relying on the client to figure things out. I personally like the ability to pick and choose how a lead gets distributed based on metrics feedback. Another misconception is that distribution takes too long with a Pull/Push system. I have heard rumors of some LMS taking between 60 seconds and 7 minutes to distribute leads. Always ask how long it takes to receive a lead from the time it is posted to your LMS until a salesperson is able to pick up the phone and contact a lead. In fact, at least one Push/Pull LMS distributes in real time—a bulk import of 16,000 leads was distributed in less than10 seconds.

FAIR CRITICISM
Push/Pull LMS requires a commitment to running a cutting-edge organization. Implementing the full capabilities of Push/Pull requires training both managers and salespeople for a high velocity workflow. An organization must commit to prioritizing speed-to-contact and follow-up. The best LMS in the world won’t save you from salespeople who don’t get it. Select the LMS solution that provides training, consulting, best practices, and professional account management that you can actually reach via phone, chat or email.

Look out for subsequent posts on LMS coming soon from this author:

Part 2: Reporting and Metrics
Part 3: Email and other marketing communications
Part 4: Best practice lead-based sales organizations – how LMS should fit in
Part 5: A look to the future of LMS solutions

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