Industrial sales lead conversion modeling

Abstract

Purpose

This paper seeks to develop a theory and a practical qualitative modeling tool that accurately predicts the probability that an industrial sales lead will convert to a booking based on observable lead characteristics and one that can be used by a typical sales manager.

Design/methodology/approach

Past lead characterization models were reviewed and gaps and weaknesses examined. A qualitative model of lead characterization and qualification was then developed based upon the determinants of customer purchase decisions.

Findings

In total, 16 commonly available lead characteristics that represent proxies for the eight determinants of industrial customer purchase decisions were identified. These were adapted to a scoring model that enables sales and marketing personnel to assess the probability that a lead will convert to a booking.

Research limitations/implications

Different companies use different criteria and different weighting factors for making purchase decisions; therefore, no single quantitative lead characterization model will be accurate for all companies. The proposed model has not yet been formally field validated, but that is planned for future work.

Practical implications

The qualitative model proposed herein is more comprehensive than previous models and should thus prove more accurate. This should prove useful to sales and marketing managers, who need to forecast bookings and sales, optimally allocate resources, and structure marketing and promotion efforts for maximum return.

Originality/value

Several lead characterization models have been proposed in the past, but none are based upon sound theory and none have been field validated. Use of this work should significantly increase selling effectiveness as well as the accuracy of sales projections.

Citation

Monat, J.P. (2011), "Industrial sales lead conversion modeling", Marketing Intelligence & Planning, Vol. 29 No. 2, pp. 178-194. https://doi.org/10.1108/02634501111117610