This article appeared in www.salesjournal.com on Friday, September 11, 2009.

This week’s blog  is by Jeff Ogden, President of Find New Customers “We Make Lead Generation Simple”  He’s also a special guest on SalesBuzz radio on Thursday, September 17th at 3:30PM EST where he will share best practices in Lead Nurturing.

Once there was a time when business made perfect sense.

The CEO would look at last year’s EBITDA (Earnings before interest, taxes, depreciation and amortization) and factor it up by a fairly aggressive number, say 25%.  Then he would back out recurring revenues like maintenance and upgrades.  The result became the company sales quota and the VP, Sales divided it by the number of reps and assigned it to each of his salespeople.

Each salesperson would receive his or her quota and scale it up based on conservative estimates and close rates.  The result would be the pipeline needed.  Finally, he’d figure out what calls, emails, events, etc. he has to do to find enough good prospects to fill the pipeline.

For a company looking for $200 million in revenue who gets 40% in recurring revenue would need to book $120 million in new revenue.

If the company has 40 salespeople, each will receive a quota of $3,000,000.  A typical salesperson might decide it will take $7,000,000 in prospects to ensure he makes quota.  Then he goes about planning his activities to find $7,000,000 in prospects.

That process worked for decades.  But suddenly, seemingly overnight, it stopped.  The Train crashed.  What happened?

As the Internet grew robust and broadband connections became commonplace, buyers realized they no longer needed salespeople.   They simply do their own research and narrow their selections.  In fact, they began avoiding salespeople.

Unfortunately companies thought they had business as usual; continuing to hand out higher and higher quotas and relying on salespeople to find leads.  But no matter how many phone calls they made or emails they sent out, all they found were deaf ears.  Salespeople missed their numbers, were let go, and more were hired.  But the result was the same.

What almost everyone failed to realize was that a railway shift had just occurred, and nobody had bothered to change tracks.  With the balance of power squarely shifted to buyers, early parts of the sales cycle moved to marketing.  Marketing now needed to take the ball and run with it – they needed to use new approaches to build trust with potential buyers.

Now buyers turn to websites to search for solutions to business problems – and websites need to offer what they look for.  More than ever, companies need remarkable websites filled with compelling thought leadership content.  Lead nurturing, the process of gaining the trust of potential buyers has moved to the forefront.

What are you doing to avoid a train wreck?