Some salespeople believe that every lead is a good lead. However, while every sales lead might start out with full-blooded potential, there’s a point when the pulse starts to slow, it eventually flatlines, and no amount of mouth-to-mouth is going to resuscitate this deal.
Your sales team may be reporting that they have a whole herd of leads they’re working, but if those leads are past the point of closing, they’re wasting their time and skewing your sales forecast.
Lead generation is challenging, so it’s understandable that people get excited when a new sales prospect comes their way. The glitter, the glam, the five-star potential. I know the rush. “This is going to be a great project, a great client, and a lot of money for the company, not to mention my sweet commission!”
And they should be excited because this energy helps motivate them to nurture the lead. But the reality is, no matter how awesome your product or service is, and no matter how convincing a salesperson you are, not every lead is going to convert.
Here are six ways to help your sales reps recognize when a lead crosses over to the other side—the dead side—so they stop wasting their time and instead move on to something with real, live, profitable potential.
1. The sales lead doesn’t need what you’re selling
Most people in sales know that you never try to sell a glass of water to a drowning man. The true professional knows it’s the thirsty man who needs your water and therefore it’s going to be waaaaaaaaay easier to sell to him.
The key to remember is that sales isn’t about selling; it’s about solving, and that’s a critical mind shift that smart salespeople understand. Find the people who have a problem your company can solve, and most of your work will be done.
However, if a lead doesn’t have a real need for your product or service, you need to move on. Otherwise, you could waste a lot of valuable time trying to convince the inconvincible.
Even if you can convince that person, there’s a risk they’ll end up unhappy because they spent money on something they didn’t really need, want, or understand. So much for that long-term, trusted and potentially lucrative relationship.
2. You’re not talking to the person who can say, “YES”
Recently, a friend who owns a small agency told me a tragic tale, one that many of us have likely lived through at least once in our careers.
My friend’s marketing agency was courting a new client and preparing a sales pitch. Their lead at this company seemed enthusiastic, confident, and in control, and she advised the agency team on what the company was looking for.
The agency prepped what they felt was a killer pitch and one that was totally in line with what their contact had outlined. It felt like a slam dunk.
That is until they got in the room on pitch day and the CEO of the potential new client company was there. He didn’t like the pitch at all. In fact, he felt they were completely off base from what he was looking for. He disagreed with the direction his employee had given my friend’s team and basically killed the deal right there.
Lesson here? Your sales reps should always talk to the decision maker. It’s fine if there is someone else on the prospect’s team doing some of the initial legwork, but before anyone on your team submits a business proposal or prepares a pitch, they need to find out what the decision-making process is, with whom the buck stops, and insist that they meet with that person at least once.
If the potential client refuses this request, or if they’re cagey about the process, it might be time to bail. You can explain to them politely without insulting their authority (or delusions of grandeur, as the case may be) why it’s essential that you speak directly to the person who’s making the decision so that you can be sure everything is aligned and that you can deliver what they need.
For all you know, the person you’re dealing with doesn’t even have the authority to pursue this project; they’re just tire kicking.
Don’t waste your time, or your team’s resources, pitching to someone who isn’t the deal maker.
3. The sales prospect sends out a lot of RFPs but always sticks with the same vendor
Some companies are addicted to RFPs and can’t seem to make a decision without one. They develop big, bulky documents every time they have a new project and cast it out into B2B land like a juicy worm on a hook, hoping to lure the big one.
But, be careful before you bite. If doing some research on this lead (which of course your sales reps do, right?) shows that they have released four RFPs a year for the past five years and always choose the same vendor, you might want to snub your nose at that wriggly worm and hold off submitting a proposal.
Ask your lead about the relationship with their existing vendor. Are they ready to make a change? What are they looking for that they think can be achieved by working with someone new? You want to be sure to avoid a sunk cost effect.
If they’re only releasing RFPs as part of the requirements in their purchasing process and not because they actually want to change vendors, this may be a lead that won’t follow through.
That’s not to say they won’t ever change, but you need to get a sense of how open to change they are so you can weigh the risks of continuing to pursue their business and the effect it will have on your sales funnel.
4. They don’t have the budget
About ten years ago when I first started freelancing, I made a rookie mistake, ONCE. A friend referred a colleague who needed a new website for his financial consulting services. I thought this was a great opportunity and that it would help me gain access to the other consultants he worked with who also might need marketing and communications help.
The consultant worked in a town about an hour away and I didn’t really ask him much before I set up the appointment. I drove the hour there and brought along Kevin Springer, now the co-founder Proposify, but at that time he owned a web development agency. I figured we could partner on this job.
Things started off just fine, talking about what the guy needed for a site, what the process would be, timeline, and so on. Then a budget number came up, and I was so shocked by this person’s ignorance about what a new website would cost that I actually laughed/choked when he said what his budget was.
It wasn’t just small; it was infinitesimal.
I thought maybe the situation could be saved by educating him on what was involved, what the average price range was, etc. But he wouldn’t, or couldn’t, budge. This was the number he had allocated, even if the only person who might be able to do it for him at that price was a tech-savvy teenager.
So there wasn’t much to say after that. Kevin and I left, having wasted a half day on a dead end lead. I still wondered if I could maybe save the deal, but the budget leap from where he was and where we could even consider working together was so huge, deep down I knew there was just no way.
So when I got home, I sent him a polite email explaining the situation and wishing him the best, and I didn’t waste one more minute on it.
If only I had just asked the guy a few questions about budget expectations before I got Kevin involved, before we both drive an hour to spend two hours in a conversation that went nowhere, and before we drove another hour to return home empty-handed, I would have recognized this wasn’t an opportunity worth pursuing.
Getting the straight truth from a prospect about their budget can sometimes be challenging because they often assume that your number is always going to be high when they likely could get it lower.
When Proposify’s CEO, Kyle Racki had an agency he would often broach the budget subject this way:
"I can build you a rowboat or an ocean liner. Both will be seaworthy, but budget determines which one you get."
If the client responded, “What does a rowboat cost?”, it gave him the opportunity to answer with: "We usually start around $X,000 for a very basic website.” Then the client either balked or said they could afford more.
The bottom line on the bottom line? You can’t get blood from a stone. If they don’t have the budget, you don’t have a deal.
And don’t even THINK about low-balling, telling yourself it will be just this one time and it could pay off. That kind of pricing strategy rarely pays off, more often delivering a world of pain in the long run.
5. You don’t offer the feature or service they want
Here at Proposify, we offer a variety of features that make it easier for businesses to create winning proposals, close deals faster, and manage their sales process.
While the majority of our customers love our feature set, we do get questions from time to time about other features, things we don’t offer. Sometimes these are features that we have on our roadmap to develop over time, while others are what we believe to be outside the scope of our product vision.
Most people are cool with this, but for others, not having a particular feature or functionality is a total deal breaker.
We understand, but we’re not going to waste our time, or the customer’s, trying to convince them to sign up for a tool that won’t meet their needs. It will be a headache in the long run with added questions for support, potentially bad reviews, and they’ll likely cancel after a short time.
If a company hasn’t found what they need from us during their free trial, it’s not likely we’ll ever be able to convert them. Case in point, our CEO Kyle recently referred one of our trial customers to a competitor. While they liked us in general, there was a feature that was a major priority to them that we are never going to develop.
It stung a bit to send them down the road, but in the long run, Kyle knew that this company was likely never going to convert, especially to a higher priced plan. It makes more sense to invest our time in converting people who want what we have and who are more likely to upgrade.
Remember what we talked about in point #1: your job is to solve a problem. If you don’t have the feature or service to solve that problem, it’s better to move on to a better fit.
However, if you do end up developing some of those features, make sure you get back in touch with those lost leads. It may be that finally, the timing is right.
6. They don’t have a deadline
Another question your sales reps need answered before deciding to prepare a business proposal is about the deadline for the project.
If the lead is vague about when they want to start or complete the project, this is a major red flag that it may never happen. Or, at least there’s no urgency to make it happen, which means your sales rep could waste a lot of time and resources nurturing this lead when the project isn’t even a priority to them. If it’s not a priority to them, it shouldn't be a priority to you.
Without an articulated timeline, they will likely delay choosing the contractor and drag the whole process out, wreaking havoc on your sales pipeline.
Plus, if there’s a big time gap between when you scope out their project in a proposal and when (if) the project happens on some elusive date in the future, a lot could change about the project, the market, the technology, and your own resources. Then you’ll have to submit another proposal. Ugh.
Don’t waste your time on people who don’t have any sense of time. If anything, you can follow up with them in a few months to see if they’re closer to launch so you can move on to work with people who are ready to do business NOW.
It’s hard to say goodbye
As an experienced sales professional, you know that sales is not for the weak-hearted or the thin-skinned. Your sales team can’t let one ‘no’ from a client set them back. At the same time, they need to recognize when they’ve hit a dead-end with a dead lead. Otherwise, they’ll end up spinning their wheels, making no money, when they could be cruising after a hot lead and a big pay-out.