Study: Sales Reps Should Be Assigned More Leads
Sales reps and the volume of leads they’re given each day smacks of the story of “Goldilocks and the Three Bears:” Organizations are trying to find the exact number of new lead assignments per day that’s just right.
A new study from Leads360 has some helpful information on how to find this perfect number. According to the company’s “Guide to: Optimization Your Leads-to-Rep Ratio,” most companies should be increasing the number of new leads assigned per rep per day.
Workload and results
The study, which looked at more than 5 million calls made by more than 2,000 Leads360 clients in a six-month period, starts by sharing the finding that sales reps assigned more leads will likely convert more leads. However, as lead count rises, the conversion rate falls.
“There are many factors that influence conversion rate, but this study suggests the number of new leads assigned per rep per day is a valuable predictor,” the report notes.
Here’s a table that shows estimates of conversion rates based on the number of new assignments per rep per day:
Leads360 points to two main reasons for the negative relationship between a rep’s conversion rate and the number of new leads assigned: the decreased effectiveness of reps as their workload increases and the likelihood that larger volumes typically come from lower-quality sources.
The optimal number of new lead assignments per day
Most sales managers already know that there’s a minimum and maximum lead volume per rep that leads to breaking even. Using its set of numbers and a formula taking into account the lifetime value (LTV) of a customer, commission per sale (CPS) and cost per lead (CPL) (assuming all other factors remain fixed as lead volume per rep changes), the research finds that the optimal new leads to assign per rep per day is 10.6.
Leads360 also shares this table to help organizations find the optimal new lead volume for their reps per day:
It uses an example of a company that has an LTV of $9,000, a CPS of $1,000 and a CPL of $50 should aim to give their reps 15 new leads per day to achieve maximum profit.
Leads360 shares that the average sales rep in its study was assigned less than six new leads per day, meaning most would likely benefit from increasing that number, since that would probably place them in the green bands of the table above.
Days and times
While the easiest and quickest way to boost lead volumes without significantly increasing other costs of sales is to purchase more leads, Leads360 warns against doing this without considering other factors, including how day and time plays a role in new lead assignments.
According to the study, lead assignments drop on Fridays and Saturdays, though the average number of assignments per rep per hour remains about the same Monday through Saturday, which means most companies rein back their active sales staffs or the number of hours worked on those days.
Leads360 also finds that most lead assignments occur during the morning hours and steadily declines as the day progresses. The bigger the sales team, the more likely reps will get a larger proportion of re-assigned leads, according to the research.
The study also finds that the more leads a rep is assigned per hour, the more time they’ll spend on the phone and the more activity leads will see. With more lead assignments happening earlier in the day, reps tend to spend more time working the phones during those hours. This means reps typically have more free time during the afternoon and early evening.
Leads360 finds that sales reps spend about 20 minutes per hour on the phone during the weekends and 15 minutes on the phone during the workweek. According to Leads360, this means sales reps are being underutilized and that they have time available to spend making more phone calls.
Sales reps are most productive on Saturdays and most effective in reaching leads on Sundays, when they have an 11 percent success rate in making contact. This underlines an opportunity organizations may want to look into.
By Jason Hahn
