Team Lead Gen vs Team Closing
There is an interesting dynamic playing out inside every sales team.
Team Lead Gen: We’re bringing as many interested people to our door as humanly possible. Make shit happen!
Team Closing: We’re trying but the lead quality sucks. Let’s not waste any time on leads where it’s not immediately clear they are a fit or are really in need of our service right now. Referral leads are the best. Our numbers look good for warm inbound leads. Let’s get more of these!
Closers are typically paid a commission based on closed deals whereas lead generators are paid per lead.
To understand the dynamic, let’s imagine there are three different categories of leads:
- Category A: already know the offer and show strong interest to sign up, “warm”, easy to close. Conversion rate 50%.
- Category B: know the offer but are not entirely convinced yet, “cold”, hard to close. Conversion rate 10%.
- Category C: do not know the offer, only showed interest in a related lead magnet, “super cold”, extremely hard to close. Conversin rate 5%.
If you are a closer, you want to work with Category A leads all day long.
Even if there are not enough leads in Category A to fill your day, you’d rather spend your time on other things than Category B or C leads.
Your can work through all Category A leads in, say, 2 hours and will, say, close 4 deals per week.
If you spend the rest of your time, 6 hours per day, on Category B and Category C leads, you will close 1 more deal per week.
Now that of course would mean you will earn a bit more. An additional deal closed is an additional deal closed.
But the effort you have to put in compared to Category A leads makes it feel like a huge waste of time.
As a business owner, you’d of course fill your pipeline with Category A leads only.
But that’s not how it works.
Category A leads come from non-scalable sources like referrals, word of mouth, and your own network.
So if you want to scale your business, you need to generate leads from scalable sources like paid ads and cold outreach which generates Category B and C leads.
Now a simple solution to make sure all leads get the attention they deserve is to pay adjusted commissions based on lead types.
Category C leads are easy to generate but hard to close. So Team Lead Gen gets paid less for them, while Team Closing gets paid more when they close them.
Category B leads are harder to generate but easier to close. So Team Lead Gen gets paid more for them, while Team Closing gets paid less when they close them.
Category A leads impossible to generate actively but easy to close. So Team Lead Gen gets paid nothing for them, while Team Closing gets paid a small % when they close them.
It’s usually Team Service Delivery that really deserves the credit for Category A leads. Amazing service delivery leads to referrals and word of mouth.