Skip to main content

What Is Lead Distribution and How Does It Work?

Your business depends on generating new leads. Every new lead is a potential customer.

But leads are like any resource, what matters is what you do with them. You’ve probably spent considerable time and funds on generating those leads., so you need to make sure they don’t go to waste.

Once you’ve put in the work to generate a qualified lead, you need to get it in front of the right rep to generate revenue for your business. That’s where lead distribution comes into play. 

What Is Lead Distribution?

Lead distribution is the action of forwarding (or distributing) inbound leads to your sales representatives.

The easiest way to understand lead distribution is: 

Every lead coming through your marketing funnel is unique — each with different needs, problems, and goals. Your sales representatives are equally unique — with different skills, levels of product knowledge, and experiences. Lead distribution involves taking a look at what makes your leads unique and routing them to the right rep to run a sales cycle. 

For example, you wouldn’t want one of your newest sales reps with less than a year of experience handling leads from a large opportunity. Because They don’t have much experience dealing with larger potential clients, they may not be best-suited to communicate your solution’s value for the enterprise. 

Instead, you’d want to distribute that lead to a sales rep that has more experience under their belt, has been selling your product for a while, and has a proven track record of closing large deals.

Matching leads to the right reps is important for closing more deals. So how is lead distribution done? 

From Lead Generation to Lead Distribution

To fully understand how lead distribution works, you need to understand how leads are generated and captured first. 

1. Lead Generation

Strangers become visitors to your website as a result of your inbound lead generation tactics. They have found your articles, are watching your videos, and are reaching your valuable content.

2. Lead Capture

These visitors become leads by filling out lead capture forms or engaging with a chatbot. These lead capturing methods will generate valuable information such as their name, email address, company size, and location. The lead information is then stored in your Customer Relationship Management platform (CRM) or other database. 

3. Lead Qualification

Leads are qualified based on the information you have gathered. At this stage, you might also reach out to these leads to ask further qualifying questions around what their needs are, what their budget is, and when they are looking to purchase a solution. 

4. Lead Distribution

Qualified leads are analyzed using the information collected from the lead capture mechanism and during the qualification process and then distributed to sales representatives based on the criteria that you establish.

How leads are distributed depends on the method you use:

Manual Lead Distribution (Pull-Based) — Sales reps pick up leads they find in the sales pool when time permits

Automatic Lead Distribution (Push-Based) — Prospect details and contacts are pushed into a sales rep’s queue based on specific criteria 

Manual Lead Distribution (Pull-Based)

Manual lead distribution is when sales reps select the leads they want to work with rather than being assigned leads. It typically involves sales reps going into a CRM, database, or spreadsheet and filtering leads based on their own set of criteria. 

It is a much more selective process that enables the sales rep to work the leads they feel have the highest probability to close.

While this may be ideal for the sales rep, one problem with manual lead distribution is that it isn’t scalable which limits the volume of leads you can handle and results in lost opportunities for revenue.

Manual Lead Distribution Methods

Cherry-Picking

Cherry-picking is when sales reps select the leads they want to work. This method can quickly become problematic, though.

Because leads aren’t automatically assigned, reps are free to choose leads based on their availability and discretion. If sales reps aren’t working enough leads to match the volume of leads coming in, then lead response time slows which means deals are less likely to close. 

Shark Tank

A shark tank approach means every sales rep can respond to a lead once it becomes available. This can increase competition amongst sales reps, but it can also discourage reps who miss out on available leads or cause faster sales reps to take on more than they can handle.

Automatic Lead Distribution (Push-Based)

Automatic lead distribution involves using automation (usually software)  to assign leads to sales reps. 

Lead distribution software pairs with forms and utilizes round-robin or rules-based lead routing to distribute leads automatically to sales reps.

Automated Lead Distribution Methods

Round-Robin

Round-robin is when leads are routed to sales reps on a rotation. If you have 5 sales representatives, each rep will receive a lead based on where they are in the queue. Once that cycle is complete, the next round of leads is assigned in the same order.  

In this method, each sales rep gets the same number of leads, but the strategy ignores other factors, such as expertise and availability, which can reduce the effectiveness of your sales team.

Lead Assignment Rules

Lead assignment rules can be used in addition to round-robin to improve your lead distribution process. Rather than just assigning leads to sales reps in a rotation, you can add rules that further define which leads are assigned to each sales rep.

For example, you may have a rule that says to route any lead with a company size of over 50 employees to three out of your five sales reps. This will make sure that any leads that meet that criteria are routed properly and your reps can specialize in subsets of your ideal customer profile (ICP).

Why You Should Automate Lead Distribution

Manual distribution may work for smaller teams, but as your business grows and lead volume increases, it just isn’t practical. 

Here are a few reasons why you should automate your lead distribution:

1. It’s more efficient 

It’s no secret that automated lead distribution makes the sales funnel more efficient. 

Leads are classified into groups and then assigned to the right sales representatives according to routing rules (e.g., availability, location, company size, etc). 

Your lead router takes all of these variables into account which means your team doesn’t have to spend valuable time checking multiple spreadsheets and calendars to connect your leads to the right reps. 

2. It improves lead response time

Your speed to lead matters. Prospects that spend more time waiting to speak with a sales rep are more likely to become disinterested and move onto a different solution. Having a quick lead response time results in closing more leads and driving more revenue.

3. It’s scalable 

Automated distribution easily adapts to changes in your process. 

For example, say you use a round-robin approach and generate 1,000 more leads than usual.

You decide to hire five additional reps to handle the increase in leads. Simply add those reps into your round-robin and it will adjust how many leads are sent to each rep based on the total number of reps on the team. 

What Should You Consider When Distributing Leads?

There are several factors to consider when distributing leads or setting up a lead distribution system.

1. Expertise

Consider the sales rep’s expertise with a specific type of product, service, market, or customer group. 

Sales reps who have expertise with a specific product or market will generally have a better understanding of the pain points and key benefits for these types of customers. They tend to be better at building rapport, handling objections, and closing deals.

2. Experience

Experience is closely tied to expertise, although it covers all aspects of working as a sales rep. Some situations require a more experienced sales rep than others.

Experienced sales reps are generally more adept at handling large or complicated deals. Experience is particularly important when dealing with large customers or when the account the lead belongs to doesn’t have a clear buying process.

3. Performance

Rewarding sales reps for past performance is another way to distribute leads. In this method, sales reps who have a good track record will get more quality leads when they come up.

However, fairness of lead distribution can become an issue, as top sales reps will continually receive the best quality leads over less successful sales reps. This can perpetuate the cycle of poor performance amongst reps at the bottom of the leaderboard. 

Performance-based distribution should be balanced to avoid giving all the best leads to top performers. The goal is to motivate less successful sales reps to improve, while still motivating top performers to maintain their productivity.

4. Geographic Location

Lead distribution by geographic location works well for certain types of businesses. For example, it makes sense to pair certain sales reps to accounts in a certain state or country when there is a need to know that locale’s laws, demographics, or requirements. 

The geographic location might also apply to companies that rely on video or phone conversations with leads in different time zones. It might also be required when sales reps are required to do product demos on-site in their territory.

5. Availability

Availability is a key factor for lead distribution. A sales rep can only work with a lead when they can provide the required attention or have the time to do so.

Maintaining a lead schedule or calendar will enable you to determine which sales reps are available and how much they have on their plate. A sales rep might not be ideal according to the other criteria, but availability can trump other factors when only certain reps are able to take the call.

The Bottom Line

Lead distribution can improve the efficiency and effectiveness of your sales process, as it will ensure your sales reps get the right leads at the right time. 

Using lead distribution software to automate the process will increase the speed of your sales reps’ response times, allowing you to scale your business and provide a better customer experience.

About the Author

David Gargaro has more than 20 years of experience as a content writer and copy editor. His content has appeared in Business.com, ITPro.com, RHB Magazine, Advisors Magazine, and more. In his free time, he enjoys reading, catching up on TV shows and movies, watching hockey, and playing with his daughter.

Profile Photo of David Gargaro