Sunday, February 9, 2014

Is Your Lead Response Time Costing You Sales?

One of the most basic requirements for maximizing results from your lead generation efforts is responding to new lead inquiries in a timely fashion. Unfortunately, it's clear that most companies don't respond nearly fast enough to inquiries from new leads.

In 2007, and Dr. James Oldroyd conducted a landmark study regarding lead response methods and timing. The study addressed several important issues, including what day of the week and what time of the day is best to call a new lead to respond to an inquiry submitted online. The most striking results of the study, however, related to the impact of responding quickly to lead inquiries. Here are two of the most significant findings:

  • The odds of contacting a lead are 100 times greater when the initial contact attempt is made within 5 minutes vs. 30 minutes after the inquiry is submitted.
  • The odds of qualifying a lead are 21 times greater when the initial contact attempt is made within 5 minutes vs. 30 minutes after the inquiry is submitted.
These results relate specifically to telephone contacts, and they clearly show that leads go cold quickly.

Since 2007, InsideSales has conducted several additional studies pertaining to lead response practices. The most recent research (the Dreamforce 2013 Lead Response Report) was a lead response audit that involved attendees of the 2011, 2012, or 2013 Dreamforce conference (organized by Salesforce).

This study used a "secret shopper" methodology. InsideSales created an alias name, phone number, e-mail address, and a company website. Then, the "shoppers" visited the websites of the companies included in the study, located the main web form on the site, filled out the alias information, and submitted it. Then, they simply waited and tracked how fast each company responded, along with other response attributes.

The Dreamforce study included 5,257 companies, 1,811 of which were eliminated from further analysis because their websites did not contain a functioning web form. Here are four of the most significant findings:
  • 40% of the companies did not respond at all to the submitted inquiry.
  • The median first call response time of all companies that responded to the inquiry by telephone was 4 hours and 8 minutes.
  • The average first call response time for the same group of companies was 40 hours and 56 minutes.
  • Only 38 companies responded within the best practice time of 5 minutes.
These studies clearly show that most companies need to significantly improve their lead response processes. It's also important, however, to understand what this research is not saying. In all of these studies, the lead submitted an inquiry that asked for someone to contact him or her, requested information, or otherwise signaled that he or she wanted to communicate directly with the company. Common sense, as well as the research, says that companies should respond to these types of inquiries as quickly as possible.

These studies did not address the situation in which a lead fills out an online form in order to gain access to one or more specific content resources. This type of "inquiry" does not typically signal that the lead is ready to have a personal conversation with the company. In an earlier post, I argued that companies make a mistake when they reach out too aggressively to these kinds of leads, and the InsideSales studies do not contradict this important point.

The bottom line? When an inquiry by a new lead indicates that he or she is ready for a person-to-person communication, you need to be able to respond immediately. For other types of inquiries, immediate and aggressive person-to-person contacts may do more harm than good, and content-based lead nurturing is the best response.

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