Jason M. Lemkin explains why revenue per lead matters for founders managing 3-20 sales reps. By routing the right lead types and volumes to each rep, companies can typically increase revenue by 20% from the same lead pool without generating new leads.
There's a metric we talked about a lot in the very early days of Saster, revenue per lead, that I've really never seen anyone talk about since. But I actually think this is one of the best tools for you as a CEO or founder for growing faster from say, sales rep three through number 20. And it's knowing revenue per lead. And what we all get really good at is understanding how much revenue a sales rep is generating. We know exactly how much Linda or Bob or Joe booked last month, but how did they get it done? How much revenue did they generate per lead? And for your first two reps, you'll know. Typically if you have two reps, you'll split the leads in half, Bob will get half and Linda will get the other. And you don't need to know the revenue per lead. But it's hard to keep track from reps 3 through 20. And here's the key. Once you can start granularly knowing how many and which leads to send to which rep, you'll learn so much more. On my first team, I learned that some reps couldn't possibly process more than 50 leads per month because as soon as I gave them 51, they didn't generate any more revenue. But some of our top performers could handle 100 or even 150 leads per month because they were so efficient. In other cases, there were follow up time issues. Some reps were great at following up in 60 seconds, some took hours. And you need to know how many leads of which type to route to each rep and it's work. But if you can do this, typically you can get about 20% more revenue out of however many sales qualified leads, or just leads in general as you would otherwise. If you're always routing the right lead to the rep that can process them the most. So try to figure that out after about 20 reps. After as many as you can fit on one sheet, one PowerPoint slide, it's too many. And you just have to judge reps and the whole process from lead to close, based on how much revenue each human generates. Put but from 3 to 20, get each lead into the hand of the right rep for that lead and you will grow much, much faster.
