Speed-to-lead. It’s an expression we use often here at VanillaSoft. If you’re not familiar with the definition, it refers to how quickly you respond to a new lead entering your system.
Perhaps a prospect has filled out a form on your website for a killer piece of content or signed up to attend a powerful webinar you’ve scheduled. Maybe somebody responded to an email blast or a social media post asking for more information. These all represent new leads and based on sales best practices we need to respond quickly while their interest is at its peak. That’s speed-to-lead.
Despite knowing this, many studies show that we’re doing anything but responding quickly. You can measure it in multiple ways. Several studies indicate that sales reps only spend approximately 35% of their time selling, which means 65% of their time is not dedicated to following-up leads. Another study indicated that over one-third of new sales inquiries are never contacted. Other studies have documented the average time for a sales representative to follow-up on a new lead is in excess of sixty-one hours.
So why is there a disconnect between what we know and what we practice? Especially when our sales organizations are compensated on the business they close. They’re missing out on sales opportunities due to a lack of speed.
In our quest to figure this out, we partnered with the Telfer School of Management, part of the University of Ottawa, on a series of studies they were undertaking. We provided them with over 50,000,000 anonymous call records, including more than 25,000,000 sales leads and upwards of 2,500,000 web leads. They followed the web leads through the sales process, at five-minute intervals, for time to first contact watching to see which leads resulted in a positive outcome such as a request for more information or a booked appointment.
Here are the facts:
- The first hour is the most crucial time for lead follow-up. It’s critical to your success.
- Engaging leads within the first hour — 38% engagement success
- Engaging leads within twenty-four hours — 8% engagement success
- Engaging leads beyond twenty-four hours — 5% engagement success
Said another way, you’re at least seven times more likely to have a positive outcome if you respond within the first hour instead of waiting a seemingly harmless twenty-four hours.
These outcomes appear fairly definitive and confirm that the importance of speed-to-lead is not a myth. It’s real. It’s essential. However, there were some well-established myths the study does appear to debunk, particularly the widely reported claim that you need to respond within five minutes for the highest success rate. The original study that made this claim focused on approximately 100,000 web leads, which is only 4% of the data that Telfer used.
According to Telfer’s analysis, if you respond within five minutes you only achieve an 18% rate of positive outcomes. The data actually seems to indicate that the initial sales engagement cadence should happen between 10-60 minutes of the lead being submitted by the prospect. At this point it is hard to know why, but it could possibly be attributed to human psychology: people don’t want to feel pursued or stalked. When vendors respond too quickly perhaps they are effectively scaring prospects away.
A logical follow-up question would be, why is the engagement rate so high within the first hour? As we now know, prospects are self-educating, getting to the middle-of-the-funnel on their own. Your production of content is designed to support this process. Therefore, when they finally reach out to engage with a vendor they are typically looking to make a decision quickly. The vendor who gives them the answer they seek first is often the vendor they proceed to buy from.
The most startling part of the study was that positive outcomes only happen 5% of the time if you wait more than twenty-four hours. In our profession, it appears you’re either structured to respond quickly, or you’re not. Most organizations are not.
If you’re lacking speed you need to address that immediately. Many of the industry’s sales leaders have added sales engagement platforms to complement CRM systems for this very reason. The study also showed that speed to lead is not the only factor; you also need to make more attempts in your sales cadence within the first five days. Don’t spread that cadence out equally; engage while interest is highest. You have to make sure your cadence is repeatable and applicable to every new lead. Take control away from sales representatives’ individual working styles and build it into your systems.
When dealing with warm leads it would appear that even if the process is a marathon, you need to sprint out of the blocks. You need speed-to-lead.
This weeks post is by guest author David Hood, President & CEO of VanillaSoft, a Sales Engagement platform that gives your sales development reps the tools they need to engage more prospects, build more pipeline, and close more deals.