Beware the 4 Unintended Consequences of the “DGR” Sales Role

With the meteoric growth of electronic B2B demand generation over the last decade, many organizations have restructured their sales organizations to optimize the division of labor.

Now, there is often a dedicated “demand generation representative” (DGR) that calls and qualifies sales leads. They are typically paid a bonus for each qualified lead accepted by sales and sometimes they also receive a percentage of the eventual sale. They are often put in place to provide leverage to the core sales team: they allow the primary sales reps to focus on active opportunities and offload lead qualification to a lower cost dedicated lead follow-up specialist.

Is this a good idea? Sometimes it is — but the additional of a demand generation rep role often creates bigger problems than it solves. Here are the top 4 risks of multi-tier lead follow-up structure:

(1) DGR models are often designed for the benefit of the core sales rep and not for the customer: If you staff this position with lower paid, lower skilled “junior” sales reps, then you risk creating a subpar customer experience. A better approach is to make sure that the best leads receive a call from a  highly skilled expert who can immediately add value to the prospect and who will be likely to answer initial questions.

(2) The addition of a DGR can create inefficient sales handoffs: Sales is a relationship business, and a change in ownership often means a reset in the sales relationship. By definition, multi-tier lead follow-up structures require sales handoffs. With each handoff, you’ll lose good prospects and add time and complexity to the sales process. You’ll also likely ask prospects for the same information multiple times, creating a subpar customer experience.

(3) The best prospects will not go through a multi-stage qualification process: In the rare chance that a senior executive comes in as a lead, you will typically have one chance to get the message right and move the sales cycle forward. If the first call is focused on qualification and doesn’t add enough value to the buyer, the sales process will quickly end.

(4) Multi-tier sales structures are setting-up your sales teams for a battle: It’s inevitable that a demand generation representative will uncover a great lead and pass it to sales only to have sales sit on the lead or screw-up the transition or botch the follow-up. When this happens, the demand generation rep doesn’t get paid. When a core sales person resigns or moves to a different role, the corresponding demand generation representative often loses 6 months of productivity and revenue.

So what is the alternative? One alternative is to rethink lead qualification (try this approach) and to send sales ready leads directly to the core sales teams. With this approach, demand generation representatives would focus on outbound calling campaigns and lower tier leads that still require development. I’ve successfully implemented this approach at companies ranging in size from 50 employees to 100,000+.

How can you design a DGR model that works? The starting point should be the customer experience and not sales opex optimization. If the DGR offers specialized expertise or focuses on prospects that wouldn’t otherwise get a call, then the addition of the role may offer real value to customers.