Written by: Victoria Yu
Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on February 20, 2024
Have you ever walked away from a purchase because the salesperson was too pushy, slow, or unpleasant? Sometimes sales reps fail to hit it off with a prospect, leading to a lost sale. On other occasions, sales reps step on each other’s toes and a customer falls through the cracks.
There are far too many ways to lose a sale, and none of them are good. But a great way to cut down on lost sales is to ensure leads are given to the most fitting sales rep, a practice known as lead distribution.
This guide lays out the different types of lead distribution strategies, discussing how they impact sales and which might work best for you and your business.
Key Takeaways
Lead distribution matches prospects to sales reps based on key criteria.
Good lead distribution results in more positive customer interactions, shorter time to close, and a better close rate.
There’s no one-size-fits-all lead distribution method. Business owners and sales managers should carefully choose the best strategy for their business.
A lead is another name for a potential customer. Since the business knows little about them, a sales representative has to reach out and nurture the lead into a sale.
Each new lead is unique, and each sales rep is unique. When leads are matched to the most suitable rep, sales are closed more quickly and the customer enjoys a more pleasant experience.
Lead distribution, or lead routing, is the process by which a business allocates leads, aiming for a trouble-free work environment and a strong conversion rate.
Leads are usually human beings, which means they have unique personalities, needs, and knowledge of the product. Likewise, sales reps also vary in terms of experience, skill, and product familiarity.
Matching a lead to the most appropriate sales rep makes for a smooth sales conversation and a more positive sales experience, increasing the chances of closing a sale. Failing to do so is a recipe for trouble.
Let’s say you sell CRM systems, and a large accounting firm comes on your radar as a potential client. Poor lead distribution might give that lead to a sales rep whose clients are mainly alcoholic beverage producers. This could result in a clash of styles and a failed sale.
Smart lead distribution would seek to assign that accounting lead to a sales rep with some familiarity with the subject at hand. A rep who studied accounting in college or already has a few accounting clients might be a good fit, resulting in more areas of conversation and more opportunities to build rapport.
Good lead distribution also improves response time, which may sound trivial but can be hugely important. Any delay, such as reps squabbling over a hot new lead, risks having that sale snatched away by a competitor.
A whopping 78% of customers buy from the first company that responds to their inquiry, according to business software provider Vendasta. Thus, a sharp lead distribution system that quickly hands the lead to the right sales rep could be the difference between closing a sale and walking away empty-handed.
Plus, today’s consumers are inundated with product options and often rate brands by customer experience. If a prospect feels their assigned sales rep is a poor fit, they may walk away. Alternatively, if you swap out sales reps partway through the sales process, your company loses all the rapport the first rep built, and the customer will be off-put by the new rep. This undermines your company’s professional reputation.
By quickly matching customers to the best-fitting reps, businesses make efficient use of their resources and ensure all inbound leads are captured and converted in a timely manner.
There are several approaches to lead distribution, and to be sure you choose the right one for your sales team it’s wise to familiarize yourself with them.
Generally speaking, approaches to lead distribution are either push-based, which means leads are assigned to reps, or pull-based, in which reps choose their own leads. Lead distribution strategies fall along a continuum of these two styles. Let’s start with the most pull-based strategies and work our way to the push-based ones.
One of the simplest methods, cherry-picking is when sales reps are free to choose their own leads out of a shared lead pool. This approach is best suited to established businesses that aim to encourage healthy sales competition.
Reps tend to appreciate the autonomy of this approach to lead distribution. The risk is that all the reps fight over the biggest fish and ignore less promising leads, potentially cutting into your sales totals. So this method is best when there are only a few sales reps with different levels of experience or areas of expertise who won’t get in each other’s way.
The best approach is to establish a clear system of claiming leads. For example, the lead could go to the rep that clicks it first in the company’s CRM or spreadsheet, and sales reps should have a hard limit on the number of active leads they can have at a time.
As a teen getting a ride with a group, you might’ve hollered “Shotgun!” to claim the front passenger seat for yourself. The shotgun method works similarly.
First, sales reps are segmented by a simple criteria, such as area of expertise or level of experience. A manager then routes incoming leads to the most appropriate segment, at which point each sales rep in that segment has the chance to call “shotgun” and claim the lead.
This method is best for larger sales departments with enough reps to be separated into categories. It encourages a competitive spirit and ensures leads are routed to at least reasonably fitting reps.
Shotgunning runs the same risk as cherry-picking: aggressive reps might dogpile onto hot leads, leaving the less assertive reps picking over the scraps. As detailed above, the manager would be wise to implement a system that ensures reasonable lead distribution.
In round robin lead distribution, lead assignments rotate from one rep to the next, much the way tables are assigned to waiters in a restaurant.
This method is best for a smaller sales team in which the reps are similar in terms of ability, experience, and area of expertise. It’s often used by smaller, more focused companies such as specialized real estate agents and accounting firms.
Region-specific lead distribution is pretty much self-explanatory – leads are assigned to reps in their geographic region. It’s often a practical solution for companies with a distributed workforce, with reps and customers scattered across the country or the globe.
This ensures prospects work with someone in their time zone, making communications more efficient. The downside is that sales reps in less active locations will likely see less action, so care should be taken when divvying up the map.
Manual assignment is when the manager assigns leads to the sales reps.
While we wouldn’t recommend this for growing businesses or as a sustainable strategy, for large clients and special cases, it’s often a good idea for the manager to weigh the options and choose the sales rep most likely to close the deal.
How you implement lead distribution hinges on which method best suits your sales team. But here are some tips for making the most out of any lead distribution process:
Whether you use a pull- or push-based distribution system, your sales team will need a certain amount of knowledge about each lead to be able to make good assignment decisions. This requires a robust lead qualification system.
If you’ve got one stellar sales rep, it might be tempting to assign all hot leads to them to ensure they become sales. But this is likely to overwhelm your top talent, potentially leading to burnout while depriving your other reps of opportunities and the experience that will help them improve.
Be careful not to give your reps more leads than they can handle, though it’s true some will be able to handle more than others. But you don’t want to keep prospects waiting just to maintain fairness.
In general, match each sales rep’s workload to their experience and availability. And you might want to occasionally assign them something different from what they’re used to to help them build experience or get a breather from the monotony.
If you’re using a push-based system, sales reps might become resentful if they notice one rep getting better prospects.
Employee resistance is the main reason company changes fail, so be sure to create detailed guidelines on how your lead distribution system works and post it publicly, like on a shared policy document. Be willing to address concerns and answer any questions to ensure successful implementation.
Sales rep performance has traditionally been measured by the number of sales and total revenue, but these metrics are less informative when leads are pushed to the reps. In these situations, a rep’s performance is limited by the leads they’re given.
To correct this, sales rep performance could be measured by conversion rate. A rep who closes all five of the leads they were assigned would have a 100% conversion rate, for instance, while a rep who closes seven of their 10 leads would have a 70% conversion rate.
The market is constantly changing, so it’s a good idea to regularly review your lead distribution strategy and make sure it’s still the best fit. During employee evaluations, make sure each rep is getting enough leads – some might have the bandwidth for more.
Choose and monitor key performance indicators (KPIs) like response time, close rate, and sales cycle length to gauge the success of your lead distribution strategy and adjust as needed.
Many larger companies rely on lead routing software to automatically distribute leads, sparing managers the trouble. Top providers include Chili Piper, Lead Assign, and Salesforce’s Power Router. All of these software tools allow users to choose their preferred approach to lead distribution and customize.
Some CRM systems, including HubSpot CRM, Zoho CRM, and Freshworks, also come with lead routing capabilities. Many businesses buy a CRM eventually, so starting out with an all-in-one provider is a good way to ensure robust and reliable data throughout the lead management process.
By matching leads to the sales reps best equipped to handle them, smart lead distribution enhances the customer experience and drives sales. Whichever lead distribution strategy you choose, with solid implementation, you could soon turn your sales department into a lean, mean, sales-closing machine.
There are many ways to get leads. Broadly speaking, there are two types of lead generation strategies: inbound lead generation, in which customers contact the business, and outbound lead generation, in which the business reaches out to potential customers.
Examples of inbound lead generation strategies include social media marketing, collaborations, and SEO. Outbound lead generation might involve cold contacting, asking old customers to refer you to new ones, revisiting old leads, and participating in trade shows.
Let’s not put the cart before the horse: you shouldn’t waste time and money on fancy software if your business is just starting out, you only have a few sales reps, or you only manage a few leads at a time. In the early stages, manual lead distribution is the way to go.
But as your business grows, an automatic lead qualification and routing process will certainly speed things up. If you’re caught between buying a designated lead distribution software or CRM, you should go the extra mile and buy a CRM: as your business grows, you’ll likely need a CRM solution anyway. Having lead data and customer data in the same system prevents information silos.
Common pitfalls to avoid when implementing a lead distribution strategy include choosing a method unsuited to your leads or sales reps, assigning too many or too little leads to reps, not properly qualifying leads before distributing them, and failing to convince and train your sales reps on the new distribution method. It’s best to be aware of these potential challenges and take steps to avoid them.
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