October 7, 2021

What Is Lead Distribution and How Does It Work?

Lead distribution is a process through which businesses are able to connect with their target market. It is the way businesses distribute new products or services, especially when they are unfamiliar to their target audience. Lead distribution involves marketing research, data analysis, and other activities that help the business identify and reach out to customers who would be interested in its product or service.

Lead distribution is done both manually by individual sales reps and automatically by software, which decides how to distribute fresh leads. It depends on a variety of parameters such as who currently has the most relevant open opportunities for this prospect. This can also include which person has worked with similar clients.


What Is Lead Distribution and How Does It Work?

The goal of the lead distribution is to enable sales reps to find leads that are most relevant to their expertise and experience and keep the leads flowing in a manner that does not overwhelm them. This means distributing leads across them is based on each rep's current workload and activity levels while factoring in the likelihood that certain leads will close from different rep groups. 
As mentioned above, lead distribution takes place both manually and automatically depending on several factors. First, let us begin with knowing the journey from lead generation to lead distribution. 


From Lead Generation to Lead Distribution 

Many B2B organizations employ a centralized, outbound marketing team for lead generation, who then distribute the leads to appropriate sales reps as needed. In this case, automation is usually needed to route leads from the CMS or CRM to the appropriate rep's inbox. However, there are also many cases where company size and structure make full outbound capabilities impractical - in these cases an alternative system is necessary.

Also know that a manual process can evolve into a more efficient and scalable automatic system by using rules-based Lead Distribution software. 


Lead Generation 

The first step of this process begins with lead generation: when marketers generate initial contact information from which leads. That can potentially qualify themselves later on through website forms or other methods. This data is often used as a starting point for lead distribution in the early stages of a campaign. Lead generation is one of the most critical components of a successful inbound marketing strategy. 


Lead Capture 

After leads have been initially generated, marketers must capture and store this information in a central location by creating a company profile within an appropriate CMS or CRM system. In many cases, this will be used as the starting point for lead distribution next time new leads become available from that same source (e.g., website form submission). 


Lead Qualification 

Once leads have been captured, it is important to qualify them through some sort of automated process to determine whether they are ready to be passed on to sales reps or if more work needs to be done first. This process should be based on the relative priority of the lead, as well as how close they are to being ready to buy.


Lead Distribution 

Once qualified leads have been approved for sale, it is time to distribute them across different sales reps who are best equipped to handle that lead type (based on expertise, experience, and performance). Lead distribution is often used in conjunction with rules-based software which determines how leads are assigned based on these criteria plus other important factors like each rep's current workload or past performance history. 


Manual Lead Distribution (Pull-Based) 

The simplest way for individual reps to distribute their leads is by entering them into a queue themselves (pulling them one place and putting them somewhere else). In this case, each rep needs to access their queue of incoming leads. Then carry out the necessary distribution tasks by hand - potentially putting a lead in one or more queues depending on how they should be handled.


Cherry-Picking 

In some cases, team members will have multiple queues representing different kinds of leads (e.g., one for new business and another for existing accounts). This can result in reps cherry-picking (or favoring) their friends over others because those same reps tend to bring the most revenue into the organization. This is not necessarily intentional but it has been known to happen as a result of manual lead distribution methods like pulling from your queue. 


Shark Tank 

Another limitation with manual pull-based lead distribution is that you often cannot see who else is involved in the process at any given time. For example, if a rep has five leads total and three of them are distributed to their peers, they would have no way of knowing where those leads went. They would not know who should be responsible for following up with them first. This leads to poor tracking and a lack of accountability.


Automatic Lead Distribution (Push-Based) 

To address some of the limitations associated with manual pulling systems, marketers will sometimes choose push-based methods which send out new leads automatically as they become available from your various sources. In this case, incoming leads are automatically distributed based on preconfigured rules without requiring each individual's involvement. While pull systems tend to be less efficient and more prone to error, push-based methods can be automated so they scale better and require very little effort from the team to operate.


Round-Robin 

The most basic version of a push distribution method is known as round-robin. In this case, every new lead goes into the queue where reps take turns pulling them one at a time (i.e., in rounds). While this approach does keep things fair by making sure the majority of leads get properly distributed every time. It also wastes time because you need to wait until each rep finishes before taking another turn. For example, if your same five sales reps had three new leads today and their pull rotation was ABCDE, it would look like ABABCDEABABCDEABCDE.


Lead Assignment Rules 

To make lead distribution more efficient, marketers can configure automatic rules to determine where leads get sent before they are even entered into the queue (i.e., push-based). This approach allows you to set up specific criteria for each rep and ensure your team is always working on the right types of opportunities. However, you need to make sure these assignment rules are based on the best possible indicators of future success (e.g., if "past revenue" was one of your factors it might be better to choose something like "time in role").


 Why You Should Automate Lead Distribution? 

1. It is more efficient - When left up to individual reps to decide how to distribute their leads, the process is often inefficient and prone to error. For example, if someone needs to pull from several queues or manually enter new opportunities into a system it can take much longer than necessary (see: manual lead distribution). 

2. It improves lead response time - Internal research at HubSpot revealed that when salespeople had more than five potential customers in their active pipelines we could expect increased revenue. With this in mind, marketers should look at how many prospects they're sending reps each day and then use round-robin techniques to ensure they're distributing enough opportunities per person every time (i.e., reps should be running out of potential customers, not inbox zero). 

3. It is scalable - To make sure everyone on your team can handle the same amount of leads, you need to consider how many opportunities they're currently receiving and distribute accordingly. 


What Should You Consider When Distributing Leads? 

1. Expertise - Because we know that it is more efficient when reps only work on inbound leads from their target accounts and buying cycles (see: lead qualification), it makes sense to prioritize incoming leads by the level of expertise (e.g., if a rep is new to SDR lead distribution you should start them off with lower-quality prospects). 

2. Experience - Reps who have been working with your company longer will be better equipped to handle qualified leads, so marketers should make sure they get the best opportunities first (i.e., from the accounts they have been working with for a while). 

3. Performance - Finally, marketers should distribute based on reps' performance over time because it is usually a better indicator of future success (e.g., how many meetings they have booked in the past).


Wrapping Up

To conclude,  lead distribution is the process that marketers use to determine how inbound leads get distributed across their entire sales team. When it comes to lead distribution, there are two basic versions of this practice: push-based and pull-based. 

Push-based methods allow marketers to set up automatic assignment rules so reps only have access to relevant opportunities (i.e., they don't waste time by pulling from queues with inaccurate data). However, automating this process is more efficient when there are fewer leads in play because everyone has enough resources to do their job properly.


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Written by

Spencer Farber

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