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Picture this: you’ve met with your executive team and mapped out a comprehensive and aggressive business development plan for the upcoming quarter. Based on your revenue goals for the year, you know you will need to secure six new contracts during the next three months. With an average closing ratio of 50%, this means you will only need 12 leads to hit your goal. You let your sales team know and they assure you this won’t be a problem. In fact, they see your 12 leads and raise it to 15.
Great! What could possibly go wrong?
As the quarter presses on your confidence only increases. Week after week your sales team has been reporting a full pipeline of leads. By now they must be up to 20!
Fast forward to the final week of the quarter.
You’re reviewing the numbers when you realize only two contracts have actually been signed. This is bad. You’re way off your expected 50% close ratio. At this rate you’ll be lucky if you end the quarter breaking even. The team is frustrated by the numbers, and you’re frustrated by the team.
So, where did things go wrong?
Has your team been fudging the numbers all along? What if they’re being too aggressive and scaring away leads before they close? Or maybe they’re being too soft and simply letting the competition out-sell them? These are all realistic possibilities, but I’d like to present a different hypothesis.

Perhaps the real issue is one of semantics.

After some internal discussion you come to realize that the way you define a lead is very different from the rest of your team.
At its core, a lead is described as “a potential customer”. I think we can all agree that definition is vague at best.
When you said you needed 12 leads you meant “12 sales opportunities with a budget of $25,000+ and the intent to purchase within the next 30 days…” obviously. But what the rest of the team heard was “12 people willing to schedule a call”.
By skipping over the basics of a good business development plan, and speeding ahead to goal setting, you’ve overlooked the critical step of discussing and defining the stages of your sales process. Although it may seem trivial, I can’t overstate the importance of taking the time to agree upon a clear and concise sales process — which is unique to your business — and develop a list of well-defined stages.
Sales people tend to look at their pipeline through rose-colored glasses, assuming every conversation could lead to a contract. In many ways this is good. This positive attitude and confident demeanor is what you want in your employees. But without a standard definition of a lead, this optimism can lead to skewed numbers and a pipeline full of dead-ends.
Ultimately, defining and categorizing leads in a consistent way will lead to more reliable data and a more informed business development plan for the future.

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