Wasted Lead Generation: How Slow Response Times Ruin Your Sales
Lead generation spoils leads. Counterintuitive? Let’s look at three lead response time studies and find out how your B2C or B2B sales leads are wasted.
Something Smells Fishy
Seafood lovers love fresh fish. Fishermen go to great lengths to keep their catches fresh and sellable.
Your online marketing is a stream for catching leads. Once these leads are caught, you need to sell to them when they’re fresh.
Why? Because leads spoil:
“[A] rep is 100x less likely to make contact if the first call is made 30 minutes after submission. The odds of making contact drop by 3000x if the first call is made 5 hours after lead submission.”
Lead generation reels a potential customer in but if you leave them on the hook to dry, these prospects will never make you money at the fish markets.
“Our own in-house research shows only 27% of leads ever get contacted. Yet with a combination of awareness, best practices, and technology; companies can contact around 92% of leads.”–Ken Crogue
Increasing response rates from 27% to 92% causes a 314% lift in results. That’s a huge lift! All you have to do is respond immediately and persistently to leads.
Not a Fan of Fish? We’ll Let You Off the Hook
Ken Crogue puts a concerning number to CEOs:
“[I]f you proved 71% of the leads your company generates on the Internet are wasted? Who would be fired?”
Hubspot contributor Chris Getman uses a car salesman to make another analogy for lead response time: you are in the market for a new car, do some research, find a dealer and go to his dealership. When you arrive you get this response from the dealer:
“Thank you for contacting me, I’ll be in touch in 24–48 hours,” and walks away. The car salesman calls you two days later, on Monday, while you’re at work, to talk about the car.”
Not exactly optimal. But Chris’s analogy is intriguing because another study found that automotive dealers are actually some of the best responders to online leads with 96% of their lead responses occurring within 24 hours of a lead submission.
But even in the top lead response time industry there are leads going bad:
“Like other industries, nearly 25% of automotive dealers in the study did not respond to a direct sales inquiry from their website.“
“As with our overall research published earlier this year, I’m both excited and frustrated by the results specific to the automotive industry,” said Alex Terry, CEO of Conversica
You’re Paying for these Sales Leads, Use Them!
Olenski, author of the Forbes article linked first in this post, summarizes the frustration of wasting money on lead generation:
“[C]ompanies spend anywhere from $30 to $200+ on each marketing generated lead while B2C firms typically spend from $2-25 for each hot lead.”
And that Elkington, an involved researcher, comments:
“[I]f a CEO realized the amount of money they were throwing down the drain in terms of wasted leads and lower close rates due to no-follow-up, slow-follow-up and low persistence, they would shake the tree and turn things upside down.”
Harvard Business Review’s article and study, “The Short Life of Online Sales Leads,” discusses the incredible amounts of resources being devoted to lead generation as lead capturing methods fall behind. 2,241 U.S. companies data showed that:
- 37% responded within an hour
- 16% responded within 1-24 hours
- 24% took more than 24 hours
- 23% never responded at all
HBR crystallizes its point by referencing a previous report which analyzed 1.25 million sales leads received by 29 B2C and 13 B2B companies:
“Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead … as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that wait 24 hours or longer.”
Spending resources, whether on PPC or other lead generation mediums, pays off best when leads become sales and customers. Leads become sales and customers when they’re responded to!
You have to respond quickly and constantly to make money from your leads.
The Importance of Selling to Freshly Generated Sales Leads
Prospects come to your site for information. They’re researching if what they want is what they really want, and if you can help them.
When a prospect submits a lead form, they’ve been convinced that you might have something that’s worth paying for. You have a small window to convince them.
The prospect needs to be contacted immediately. If you contact the prospect when he or she is hot and interested, you’re far more likely to not only reach him/her, but also to make the sale.
Lead Generation Marketing in Westeros
Jon Snow looks for the latest time management software. He fell behind with paperwork at the Night’s Watch due to many action-packed events, but, as we all know, the boring stuff has to be done.
He’s just in luck because you are the CEO of an impressive time management solution. He sees one of your PPC raven ads and is persuaded by your impressive parchment landing page to submit his information.
Next he has to wait for your follow-up and the numbers don’t look good. Insidesales surveyed Dreamforce 2015 participants and the average online lead response time was 37 hours and 25 minutes.
Now what does Jon do in the meantime? Perhaps he does a bit more research, submits a few more online leads.
Or he goes through his emails, moodily broods, breaks his vows to the watch, etc. Your offering’s attractiveness dwindles by the minute.
Furthermore, how interested will Snow be when your salesperson calls him at dinner?
His intent goes stale along with the possibility of a sale:
“if a lead is called within five minutes versus 30 minutes after it’s submitted, that lead is 100 times more likely to be contacted and 21 times more likely to enter the sales cycle.”
Persistently Respond and Profit
Steve Olenski visualizes the stats from above:
So who’s more likely to get Jon Snow’s business? Your company or Lannister Lead Generation Company which has a strict policy of a 2 minutes or less sales leads response times?
2 minutes! That’s a fanciful metric for a fanciful corporation but the Insidesales survey says it’s not fanciful at all.
Those are some inspirational numbers, but don’t be intimidated if your business is limited, there’s still hope.
Just aim to respond faster than your competitors.
Converting Online B2C & B2B Leads
Respond faster! A fresh lead has your business top of mind. He or she moved down your sales funnel—take advantage and close the deal.
Even if you can’t sustain the prompt response times listed above, any improvement helps catch wasted leads.
Follow-up diligently! If you can’t reach the lead within 5, 10, 30 minutes, etc., make sure you’re calling periodically to ensure contact.
Insidesale’s graph demonstrates the success of many follow-ups:
The participants surveyed attempted to call a lead 2.8 times. Are you aiming to be average? No! Call more! The data shows that 2.8 is less than ideal.
Just think about it: if you want to learn more about a product/service, will you be more receptive to talking about it while it’s fresh in your mind, or the next day while you’re relaxing with a steaming coffee and a million emails in your inbox?
Don’t waste money on lead generation by ignoring the leads you generate! It’s a simple idea, but can be difficult to implement. Work incrementally towards that instantaneous response time!
Respond to your leads quickly and repeatedly!
Insidesales and Dr. James Oldroyd’s study, which everyone references and is likely the charter document of lead response research, is available under the title “The Lead Response Management Study”
HBR’s study, “The Short Life of Online Sales Leads”
Conversica’s automotive study, “Sales Effectiveness Report: Lead Follow-Up”