JULY 2, 2013 THE EXPANDED LEADSCON RESPONSEAUDIT...

JULY 2, 2013

THE EXPANDED LEADSCON RESPONSEAUDIT EXECUTIVE SUMMARY INSIDESALES.COM RESEARCH DIVISION PERFORMED BY KYLE DAVIS

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Copyright © InsideSales.com 2013

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No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning,

or otherwise, except as permitted under section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of InsideSales.com. Requests for permission should be addressed to the Legal Department, InsideSales.com, 34 East 1700

South, Suite A200, Provo, Utah 84606.

© 2013 InsideSales.com

All rights reserved, including the right of reproduction in whole or in part or in any form.

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THE EXPANDED LEADSCON RESPONSEAUDIT EXECUTIVE SUMMARY

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RESEARCH PAPER


RESEARCH OVERVIEW

Attendees of the 2013 LeadsCon Conferences in Las Vegas and New York were tested for how quickly and persistently they respond to Web leads. The results suggest that companies need to respond more quickly to Web leads, be more persistent in contacting leads, and call each lead more frequently. The findings of this report will help companies recognize and address their lead response strategies and improve their lead management.

THE LEADSCON CONFERENCE

Since 2007, the LeadsCon Conference has helped companies gain “unparalleled insight” on the latest marketing trends (LeadsCon, 2013). In addition to insight, attendees have great opportunities to network and meet with top leaders and technology solution providers.

OPTIMAL LEAD RESPONSE MANAGEMENT

This study focuses on two areas that affect a lead’s progression into the sales pipeline: response time and persistency. There are two types of contact methods this study tracks: email and phone call attempts by members of each company’s sales team. Lead response time refers to the period between when an electronic lead is submitted and when first contact is attempted by a sales rep. Persistency refers to how many times a company attempts to contact a new lead before giving up.

The Lead Response Management Study by Dr. James Oldroyd shows that sales agents do not have much time to respond before their leads become unresponsive or “cold.” In fact, the odds of contacting a lead after it is submitted are 100 times greater when contacted within 5 minutes versus 30 minutes. Similarly, the odds of the lead entering the sales process, or becoming qualified, are 21 times greater when contacted within 5 minutes versus 30 minutes after the lead was submitted (Oldroyd, 2007). These findings underline the importance of immediate

http://www.insidesales.com/research

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contact, as well as the dramatic decrease in the odds of successful lead qualification after the first 5 minutes from lead generation.

In the March 2011 issue of the Harvard Business Review (HBR), an article entitled “The Short Life of Online Sales Leads” states that companies are spending more on Internet leads, but their systems and processes are not keeping up. Between 2005 and 2009, the amount companies spent on Internet-generated leads increased 82%. However, of companies audited in the study referenced in HBR, only 37% responded within an hour, and almost a quarter—24%—took over 24 hours to respond. The average first response time of companies that responded within a month was 42 hours (McElheran, 2011).

Lead response time was also the subject of a May 2012 Forbes.com article, “When it Comes to Inbound Marketing Time is Definitely of the Essence,” which discusses how companies are essentially wasting money on poor lead management. B2B companies spend an estimated $30 to $200 on each marketing lead generated, while B2C companies spend an estimated $2 to $25 per generated lead. Company executives likely do not realize the money they are losing by allowing their leads to get “cold” (Olenski, 2012).

Speed of response is not the only factor that contributes to contact rates—the day and time of response also have an effect on the odds of contacting a lead. An article in Inc magazine, published in July 2011, entitled “How to Best Harness Inbound Marketing Leads,” mentions that for a group of 42 companies, Wednesdays and Thursdays between the hours of 4 pm and 6 pm are the best times to contact a lead (Markowitz, 2011).

Another aspect of successfully contacting leads is persistency. Based on ResponseAudit research across 7,960 companies between 2008 and 2012, sales reps on average make only 1.3 call attempts to a new lead before giving up. Ken Krogue, president and co-founder of InsideSales.com, has blogged and spoken on this topic and on how to improve this metric at a number of events such as the Sales 2.0 and AA-ISP conventions (Krogue, 2012). Krogue advocates making 8-12 calls in order to dramatically improve contact rates. Companies will likely increase the number of leads moving down their sales pipeline by being more persistent in contacting them.

http://hbr.org/2011/03/the-short-life-of-online-sales-leads/ar/1

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

http://www.inc.com/guides/201107/how-to-best-harness-inbound-marketing-leads.html

http://www.kenkrogue.com/best-practices/inside-sales-best-practices-7-ways-in-increase-contact-ratios/

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METHODOLOGY

RESPONSEAUDIT TECHNOLOGY

The ResponseAudit system is a patent-pending technology used to conduct research. Its purpose is to test how quickly and persistently companies are contacting Web leads. The process begins with a “secret shopper” who creates an alias name, email, phone number, and company website. Next, this “shopper” visits a website, locates a Web form, fills it out using the alias information, and submits it. As the company responds to the lead, the ResponseAudit system records all call attempts, email messages, and timestamps for each response received during the subsequent two-week period.

THE EXPANDED LEADSCON RESPONSEAUDIT PROCESS

The ResponseAudit system is standardized and automated. Audits are only performed during the standard business hours of 8:00 am to 5:00 pm (accounting for time zone differences), which allows companies to have the best chance at responding quickly. At the end of the process, a report is compiled for each company with a list of response types (call or email), number of attempts, response times, and summary statistics.

Companies that attended the 2013 LeadsCon conference in Las Vegas as well as many companies planning to attend the 2013 LeadsCon East conference in New York City were tested for how quickly and persistently they respond to Web leads. The 1,333 companies were found on LeadsCon’s website.

WHY “EXPANDED”?

The LeadsCon 2013 ResponseAudit was published in March 2013 with an audit of all exhibitors at the 2013 LeadsCon Conference in Las Vegas. This study, however, has over double the companies, many of which are attending the August 2013 LeadsCon East Conference in New York.

RESULTS

RESPONSE RATE

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The response rate shows how many companies attempted to contact the lead by phone or email. This metric is calculated as the number of companies that responded either by phone or email divided by the total number of companies audited. Figure 1 shows this aggregate finding. Of the companies that had Web forms, 47.0% responded to the lead. This is very low compared to most groups studied; the typical response rate is between 55% and 65%. These findings suggest that companies that attend LeadsCon do not respond to a majority of leads.

A possible reason why the response rate is so low could be that sales reps do not make it clear what company they are calling from. Companies may be responding, but they leave no voicemail, or when the calls are returned, nobody answers. IMMEDIACY

As mentioned above, immediacy refers to the amount of time it takes for the sales reps to attempt their first phone call. Of companies that responded by phone within two weeks, 15.0% called back within five minutes and 42.2% called in less than an hour. The median first response time was 1 hour 31 minutes 9 seconds. The average was 21 hours 28 minutes 15 seconds. While most people are generally more familiar with the average, the median is the better metric to rely on because it is less affected by very poor performers.

Response Rate

© InsideSales.com 2013

Figure 1 Response Rate

53.0%

47.0% No response

Responded at leastonce

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First Call Response Times


PERSISTENCY

In general, LeadsCon attendees do not make many contact attempts. The median number of response attempts, including both phone and email, was 0, and the average was 1.6. Only 21.9% of companies made more than one attempt. Figure 3 shows the number of companies that made the specified number of responses.

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Figure 2 First Call Response Times

Number of Attempts


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RESPONSE TYPES

Email is the primary method that companies use to contact leads on the first attempt. With subsequent attempts, however, their responses gradually involve more calls. Figure 4 shows the progression of media through the number of responses.

Contact Method by Attempt Number


Figure 4 Contact Method by Attempt Number

Companies typically should be calling much earlier in the sales process. Overall, almost half of all responses were emails as shown in Figure 5.

Total Responses


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DISCUSSION

COMPANIES NEED TO RESPOND FASTER

As shown in this report, LeadsCon attendees are relatively fast at responding to leads compared to other tradeshow groups and industries. There is, however, still much room for improvement.

Of the 173 companies that attempted a phone call (out of 862), 26 companies attempted a phone call in the first five minutes after the lead was submitted. Many companies did send emails within five minutes, but it is impossible to tell which were human-generated and which were auto-reply emails. Only 15.0% of companies that attempted a call and 3.0% of total audited companies are taking advantage of the short five-minute window before their leads grow cold.

As previously mentioned, rapid response to a lead can greatly increase contact rates. It is likely that companies are wasting marketing budget and ultimately losing prospective customers by not responding fast enough. Businesses that respond quickly to leads will increase contact and qualification rates and therefore increase the number of leads coming through their sales pipelines.

COMPANIES NEED TO BE MORE PERSISTENT

Surprisingly, 53.0% of companies never responded. Companies are giving up very quickly in responding to their leads—only 21.9% made more than two attempts. Not responding to leads represents a waste of the work going into marketing, equipment, sales, website design, etc. Thus, companies spend large amounts of time and money to attract, capture, and convert leads, and then they do not effectively manage their lead response strategies.

CALL PERSISTENCY

Companies are emailing more than they are calling on the first attempt. Responding to a lead using mixed media is a good idea; however, phone attempts are typically better than email, especially on the first attempt. This is because responding by phone can put the vendor in a direct conversation with the lead. The vendor answers questions, sells the product more fully, and can push for the next step on a phone call. Email conversations are typically slow; each reply could take hours or days.

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Though using email is a good way to diversify response attempts, phone calls should be the primary contact method.

CONCLUSION

Companies need to respond more quickly and more persistently to Web leads and make more phone calls. The conclusions drawn in this study can be useful for all companies that respond to leads. For instance, all companies can be mindful of contacting leads more quickly and persistently, thus ultimately increasing the number of leads in their sales pipeline. Further areas of research on this topic should include why companies do not respond to leads and how much money companies can gain by contacting leads faster. As the information about lead management grows, companies should place emphasis on utilizing this knowledge and, consequently, improving their processes to increase their profitability.

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ABOUT INSIDESALES.COM

The InsideSales.com platform accelerates efficient lead response management and qualification. Key features include: PowerDialer, integrated with the InsideSales.com Lead Response Platform or the Salesforce® CRM; ResponsePop, the ability to respond to web leads in under 10 seconds; automation of standard sales functions, such as the ability to leave a voice message or email with the click of a mouse or through one or more pre-defined trigger events, otherwise known as sales workflow automation; extensive sales analytics that enable visibility down to the sales rep level. ResponseAudit is a unique service offered by InsideSales.com for analyzing a sales team’s response time and persistence to an Internet-generated lead (request a free ResponseAudit at www.responseaudit.com). A brief list of our enterprise clients includes: NEC, Dell, REMAX Cornerstone, and Marketo. To learn more, visit www.InsideSales.com.

http://www.responseaudit.com/

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WORKS CITED

Krisitna McElheran, J. O. (2011, March). The Short Life of Online Sales Leads.

Harvard Business Review, p. 28.

Krogue, K. (2012, February 23). Inside Sales Best Practices: 7 Ways to Increase

Contact Ratios. Retrieved from www.kenkrogue.com:

http://www.kenkrogue.com/best-practices/inside-sales-best-practices-

7-ways-in-increase-contact-ratios/

LeadsCon. (2013). LeadsCon Las Vegas. Retrieved from leadscon:

http://leadscon.com/

Markowitz, E. (2011, July 6). How to Best Harness Inbound Marketing Leads.

Retrieved from www.inc.com:

http://www.inc.com/guides/201107/how-to-best-harness-inbound-

marketing-leads.html

Oldroyd, J. (2007, October). Lead Response Management Study - Oct. 2007.

Retrieved from Inside Sales Best Practices:

http://www.insidesales.com/images/LRM_07.pdf

Oldroyd, J. (2009, October). Lead Response Management Study - Cct. 2007.

Retrieved from Inside Sales Best Practices:

http://www.insidesales.com/images/LRM_07.pdf

Olenski, S. (2012, May 5). When It Comes To Inbound Marketing Time is

Definitely Of The Essence. Retrieved from www.forbes.com:

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-

comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

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