Ken Krogue

Notice I did not say 7 Ways to Increase Contact Rates! What is the difference between a Ratio and a Rate? Socrates said “the beginning of wisdom is the definition of terms.”

Socrates - The beginning of wisdom is the definition of terms

A Rate is contacts divided by time, like contacts per hour, or contacts per day. It results in a metric, or number, like 10 contacts today, or 1.25 contacts per hour.

A Ratio is contacts divided by dial attempts, which results in a percentage. For example, if I make 100 dials and talk to 10 people, I have a 10% contact ratio.

There are three more Ratios that I like a lot. They are the Correct Contact Ratio, the Contacted Ratio, and the Contactable Ratio.

A Correct Contact is the number of correct decision makers divided by time. Technically, a Contact could be anybody you speak to, whether they influence the buying process or not. A Correct Contact is talking to the right person. Why is tracking this important? It pushes your people to make sure they constantly seek the proverbial Decision Maker(s).

A Contacted Ratio is the percentage of leads you have actually contacted divided by the total leads. Why? According to eleven different ResponseAudit research studies we have done with over 10,000 companies, companies only actually contact 27% of their leads. I will show you in this article how to contact 85-92% of your leads, which we were able to do for nearly two straight years, that is a 3.4X increase!

A Contactable Ratio is the percentage of leads you receive with valid contact information (real phone number) divided by the total number of leads. Web leads in particular are notorious for junk contact information. People want the white paper or ebook, but they don’t want people calling them, so they put in bogus information. (Hint, usually only part of it is bogus.)

Bryon Geddes of Dixie State College

My good friend Professor Bryon Geddes from Dixie State College of Utah and Director of Southern Utah Marketing Resources (S.U.M.R) asked me to share ways to increase contact ratios. He is leading an initiative at Dixie that we will be talking about soon.

Here goes:

1. Get direct dial phone numbers: This trick was shown to me by Steve Richard of Vorsight and it is so common sense people miss it. Usually doubles or triples effectiveness. The best lead generation reps know this best practice. Vorsight has lots of amazing ways to do this (Steve, maybe a guest blog article with some ideas here?)
2. Ask for the best time of day: This is also common sense. Put on your web form or other response mechanisms this question, “best time of day to respond?” The individual knows their own schedule better than anyone. When getting stopped by a gatekeeper, ask the same question.
3. Know your best Time of Day to call: This came out in our original study with Dr. James Oldroyd (Inc.com recently mentioned this with a download link) , the contact ratios at 4 to 6pm was 114% higher than right after lunchtime. 8 am was the second best time to make contact. So rearrange your meetings and calling times.
4. Know your best Day of Week to call: Wednesday and Thursday (again from original study) were 49.7% higher contact ratios than Tuesday.


Inc.com - How to Best Harness Inbound Marketing Leads

5. Call back Immediately: This was the biggest finding of all. In a study of over 100,000 datapoints (very statistically significant) Dr. Oldroyd and Dave Elkington found an incredible increase in contact ratios if you call a web lead back in less than 5 minutes. The odds of contacting that lead are 100x higher than even waiting 30 minutes. And the odds of qualifying that lead (setting an appointment to progress in the sales cycles) are 21 times higher. Kristina McElheran of Harvard Business Review (HBR), along with Dr. Oldroyd and Dave Elkington our CEO did a completely updated research study in an article called The Short Life of Online Leads with 10 times the data in March of 2011 that re-validated the original findings. Eleven ResponseAudit studies show the average response time is still just over 49 hours.
6. Call back Persistently: In these same ResponseAudit studies we found that the average sales rep at a company only makes 1.41 calls before giving up. We find that you need to make 8-12 calls if you want to dramatically increase contact ratios. Think about it. The average contact ratio hovers between 10-11% in business-to-business (B2B). How many calls do you need to make to reach someone? 9 to 10.
7. Caller IDs matter: What shows up on your caller ID when you dial a busy decision maker? A blocked number? A Toll Free number? A long distance number? Those are all red flags that say, “I don’t know you.” A local caller ID has been shown to be 17% to 193% more effective in getting people to answer than those other three. We have a product called LocalPresence that has been shown to increase contact rates by 58% as a byproduct of many of its other great benefits.

Ok, I’ll try and address contact rates next. Thanks for reading everyone, spread the word about contact ratios!

Ken

Today I had lunch at the MountainWest Capital Networks Entrepreneur of the Year Award Luncheon watched Josh James, Founder & CEO of Domo, and former founder and CEO of Omniture give the keynote address and receive the annual award for Entrepreneur of the Year.

Much deserved.

Anyone selling their company for well over 1 billion dollars is in a league shared by only a handful on the planet. And to lay it all on the table again within a year and start up another company is audacious to say the least. He has a reputation for doing the unexpected.

Josh James Receives Entrepreneur of the Year 2012

Well, right in the middle of his keynote address he mentions his desire to promote up-and-coming tech companies based in Utah and asks our own CEO, Dave Elkington, to come up and take two minutes to “pimp his company” and tell the whole audience about InsideSales.com and why they should pay attention. Dave spilled the beans and shared with the room of movers and shakers that Josh James recently invested in our company, along with some other key players in the high technology area.

Nobody I know shares the stage of their own awards ceremony and keynote address to share the love with a budding hyper-growth company… except Josh James.

Thanks Josh!

Josh went on to tell the amazing story of how he raised $50 million for Domo without any revenue by telling everybody “No, not interested.” I was sitting there at the table and thumbed through a small booklet with a collection of quotes called “Josh James – Startup Rules.” I was spellbound.

Josh James shares 36 Startup Rules; and the Stage with our Own Dave Elkington

Here they are (#jjsr):

1. I only care about sales. Don’t talk to me about marketing, booth, HR, comp, legal, etc. Can be fixed later with $$$$$$$. Close Deals.
2. I’m note trying to be rude by ignoring you. Your topic isn’t important yet. It will be but not now. No coddling. — Good person. Bad topic.
3. Don’t listen to your customers or potential customers when trying to #innovate. Use their feedback only to iterate.
4. Think big. I never think big enough. Be audacious. Imagine deals people around you think will never happen. Believe.
5. Don’t be afraid to hire execs older than you; But if treated like their child slap ‘em upside the head figuratively. #MutualRespect.
6. Attorneys work for you. The best make great partners, but you must manage them not them manage you. You have to make the decisions. Don’t let them intimidate you with legalese. Have them explain the full spectrum of choices. It’s still your business.
7. 1st things 1st. Ignore everyone until most important item is completely done. #RelentlessLikePitBull
8. Find salespeople who love to spend money: watches, cars, houses. The more they spend the better your prospects.
9. I relish an all-nighter like my dad relishes the smell of jet fuel in the morning. #Startups #SaaS
10. Nothing crystallizes your strategy like several hours of continuous, peaceful, uninterrupted focus.
11. Nothing is more motivating and nothing pisses me off more than people who doubt me. #Startups #Omniture #SaaS #Cloud
12. Spelling and grammar: Great employment filters. If they can’t, I don’t want them at company. 1% exception. #TakeToTheBank
13. Customers first!!! In every way. Had 100% retention of customers at #Omniture for 5 years. Aim to do the same at #Domo.
14. Believe in your tech team more than they believe in themselves they will rise to the occasion.
15. Make everyone responsible. Create internal conflict to quickly fix complex problems because it forces cooperation.
16. Make mistakes faster than anyone else. I do and it’s rad.
17. Big time execs put their pants on one leg at a time–treat them like an old high school friend. #Don’tBeIntimidated
18. Culture–be polarizing–some people will leave but others will love it. #WeedEmOut #FindTheBallers
19. In zeal to close deals, be careful not to become the CEO 10% discount. Sales won’t invite you back. #SaaS #Cloud
20. Hire hungry, angry, slighted, bad-luck, orphans and others waiting for their chance to prove the world wrong. #Startups
21. Competitors are trying to take food from your family and your team’s families. Treat accordingly.
22. I got 99 problems but hiring ain’t one. Fire fast. Hire slow.
23. Making decisions with more than 75% of the information is by definition hesitation.
24. When raising money, your 1st move is to tell potential investor, “No, not interested.” Makes them crazy.
25. CFO office not allowed to lose any sales. Prohibited from lying about finances but not allowed to lose deals either. #Startup
26. #Cloud: Pay attention to churn early because retention gets very nerve-wracking when 10% churn equals a $50M hole in the bucket.
27. When in #Cloud and #Startup, strive for perfect uptime. Fire repeat offenders. Measure uptime from inside and outside. Customers will.
28. #GuerrillaMarketing for #Startup: Get universities to run competitions about your space. $5K-10K goes a long way in branding + hiring.
29. Don’t spend #Startup money on anything until you have to, but when the time comes, don’t be chintzy… #PlayToWin
30. Early to bed early to rise hurts my head. Give me peace and quiet at 2AM and I’ll give you opportunity for genius. #Startup
31. Don’t be a scared American. Go solo overseas for biz. A jointventure is like playing roulette with your brand and success. #Startup
32. Do not negotiate with Israelis in business. You will lose.
33. Pay commissions only after receiving cash from customer. Sales people hate it but collections are easy. #SaaS #Startup
34. Family and friends more important than #Startup so act accordingly. More effort, zeal, creativity at home than work.
35. Unless emergency, until #Startup is stable, work like dog during week; weekends and friday nights are sacred time for family + fun.
36. If old enough to die for country, you should be able to rent a freaking car. Charge more if I’m a risk. #StillMadAtHertz

Q: How do you determine how many reps you need to be able to handle inbound leads most effectively?

A: There is a really cool algorithm that sophisticated inbound call center professionals know who calculate service levels.

It is called Erlang C.

Let’s say you want to staff enough reps to make sure that 80% of the time you answer inbound calls in 30 seconds or less. That is called an 80/30 service level, and it’s pretty good.

Well, Erlang C has you plug in the service level you want, how many calls you get, how long the calls are, and average delay of calls, and it tells you how many people you need to handle the service level you want.

This is exactly what you need to do for your Inside Sales team. Type in “Erlang C Calculator” in Google and try it for yourself.

You could be burning a lot of expensive leads by not staffing up enough. Beware, we’ve done it.

Q: What happens if we don’t have enough reps to handle the leads?

A: This may be the biggest mistake companies make with inbound models. We have often made it ourselves, even though we handle hundred inbound and outbound inquiries weekly. Our research shows time and time again that the average company responds to a lead in 46-49 hours. And the average inside sales rep only makes 1.2-1.4 call back attempts before giving up and moving on.

THIS MEANS ONLY 27% OF LEADS ACTUALLY GET CONTACTED ON AVERAGE!

Did you read that? You are spending all this marketing money to generate leads and only 1 in 4 get contacted? Are you kidding me?

No. Measure it yourself.

We have also found that if we:

1) respond to web leads in less than a minute,
2) make 8-12 call back attempts,
3) get direct dial phone numbers if possible,
4) use local phone numbers on caller IDs,
5) call at the best time of day and
6) day of week, good things happen.

WE HAVE MAINTAINED LEAD CONTACTED RATIOS OF 85-92% FOR NEARLY TWO YEARS INTERNALLY. Just recently we forgot this key at InsideSales.com and had to quickly remind ourselves of this important rule when our leads went up, but appointments went way down (my fault, I’m kicking myself.)

Calculate this. 27% versus 92% of your leads getting contacted. That is a 3.41x increase in results!

Q: When should we schedule inside sales reps and BDR reps to work?

A: Simple. When the calls come in.

Watch your call flow. There are call scheduling software platforms to help larger organizations to this.

Research shows that inbound calls increase just when outbound calls tend to become less effective (hint: an hour before and after lunch time by time zone.)

So have your outbound reps here early and stay late and give them longer lunches. Our study with Dr. Oldroyd showed that 8am and 4-6 pm were great times to call. But 11am to 1pm were the worst.

Q: Does a purely outbound cold calling shop need to be tightly scheduled?

A: Not as much. But don’t you have inbound calls in response to all your outbound calling? Aren’t those the hottest leads of the day? Shouldn’t you have people ready to respond? It is still important.

Yea, I know. Professional sales reps want autonomy, right?

Well, those who are way ahead of quota get more flexible schedules. Those who are behind need to be putting in more effort and taking more calls anyway, eh?

Should inside sales reps be allowed to pick their own schedules and come in to work as they wish as long as they get the job done? Isn’t autonomy and flexible schedules one of the things that all sales reps want to have?

These questions get asked a lot. Our own reps ask them. Our customers and prospects ask them.

I have a few questions and thoughts in return:

Q: Do your inside sales reps find their own leads or do they respond to inbound web leads provided by the company?

A: If they respond to leads then schedules are important.

We have found that by far the best way to respond to web leads is with immediate response technology (which we pioneered) that calls leads back in less than a minute and routes it immediately to a Business Development Rep (BDR) to pre-qualify and hot-transfer to an inside sales rep if they are available.

This means that you need to have BDRs and Inside Sales reps available when the leads come, don’t you think?

Well planned scheduling is far more important for inside sales teams receiving inbound leads.

Q: How much fall-out do you have trying to set appointments and call people back versus taking the call right then? 30%, 40%, more?

A: Basically, an inside sales model that responds to inbound leads required far tighter scheduling to have people ready to answer and respond to calls than an outbound model. But you know what, even an outbound model benefits from hot-transfers from appointments setters to closers if it is a “specialist” model that hands off phone calls (and our Kellogg research found specialist models to be significantly more efficient and effective.)

If you can have qualified reps ready to take calls at any time, do it!

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