Ken Krogue

Inc. Magazine has just become another major publication to note the importance of our research on responding immediately and persistently to inbound leads.

Eric Markowitz is a well known writer for Inc., Vanity Fair, and the Washington Square News and summarizes the research of Dr. James B Oldroyd, a former professor at the Sloan School of Management at the Massachusetts Institute of Technology, and our own CEO, Dave Elkington. His Inc. article on July 6th, 2011, is entitled “How to Best Harness Inbound Marketing Leads.”

Inc. Magazine links to the original downloadable MIT study here. It was originally titled “How Much Time Do You Have Before Web-Generated Leads Go Cold?” and has been quoted now by hundreds of blogs, speakers, and publications around the world.

Original MIT Study by Dr. James Oldroyd & Dave Elkington

Every now and again you discover something that changes the world. This did for us.

At last count we have had nearly 70,000 companies access and / or download this landmark study. A more complete summary of all the research started originally by Dr. James Oldroyd and InsideSales.com is readily available at www.LeadResponseManagement.org.

I travel to several different trade shows, summits, and conferences a year and it is still fun to have someone quote our study back to us.

Has it changed anything? Only for those who are taking advantage of the windfall of immediate and persistent response. We have “secret shopped” nearly 5000 companies over the last four years to find how fast they response and how many times they persist before they give up.

The bar is still very low.

The average company still takes 46 hours to attempt their first callback, and the average sales rep only makes 1.2 call back attempts before they give up and move on. Our continued research shows that only 27% of leads ever get called.

With our technology and the awareness of these principles of immediacy and persistency, we have been able to keep our contacted rate between 85 and 92% for over three years. Our customers who follow our lead also receive this immediate bonus of a 2.5x increase in results based on the most common sense principle, “just call them back, and do it quickly.”

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The message of Monday’s blog this week is short and sweet:

If you’re a B2B sales organization, it’s more important than ever to have a dedicated lead generation and qualification team.

The Bridge Group’s Matt Bertuzzi showed recently that 43% of organizations surveyed by CSO Insights were increasing their sales team size by at least 10%, and 24.7% were increasing there sales force by 20% or more.

Our own research in 2009 showed that inside sales hiring in B2B was going to go up 7.5% a year through 2015.

In the same vein:

The Funnelholic recently provided a list of 54 things to do when building a lead qualification team.

Marketo’s Jon Miller provides Seven Ways that Sales Development Reps Drive Revenue.

Green Leads’ Michael Damphousse demonstrates that the “actionable” activity rate of phone vs. face-to-face prospecting is much closer than any of us think.

The point of all this is simple: inside sales and lead qualification teams drive revenue, period. As much as I respect and admire the work of marketing automation technologies, inbound marketing companies, search engine marketing, and the like, it’s becoming ever more clear that direct outbound prospecting, and fast, immediate response by a qualification team to inbound inquiries are a critical strategic advantage to get leverage in the B2B Sales 2.0 era.

When Ann Holland from MarketingSherpa asked Dave Elkington and I to present InsideSales.com’s research findings with MIT and Kellogg back in 2007, I’ll admit we were excited for a chance to “show off” a little bit what we thought was some “pretty cool little research” on lead management and lead response.

To say that the response since then has exceeded our expectations would be a major understatement. That same research has practically spawned the the entire lead response management industry, and I’ve seen at least ten follow-up studies from other sources since.

So when Ann contacted me to let me know she was moving on from MarketingSherpa, I was both surprised and intrigued to see where she was going.

Ann’s had an ear to the ground, and her finger on the pulse of sales and marketing, especially in B2B, for a long time now. She’s an industry insider in the best sense of the word, and the work she did at MarketingSherpa helped make it one of the most respected thought leaders in professional sales.

One of her two new ventures, Which Test Won? is a fascinating take on split variant marketing testing. Using actual samples of marketing content, she has users predict which content actually performed better in use–and then show the actual answer. It’s still ramping up, but this is the type of real, actionable data that we marketers can use in our everyday work with a vengeance.

Check out the Web site here.

Her other site, Subscription Site Insider, gives users a well-informed view of how to better manage their subscription Web services, with great content on managing legal issues, renewals, content, and more.

Check it out here.

I bumped into this post on The New Sales Economy, and thought it was a worthwhile read on inside sales best practices (thanks to Trish Bertuzzi for the link).

Using The Bridge Group’s data, author Chad Levitt asks nine highly relevant, incisive questions about the current state of professional inside sales.

I was particularly interested in one of the questions—”Is there a disconnect between sales management and front line sales reps?”—because in my experience, even the best organizations occasionally have holes, or disconnects in their sales process.

For example, when we did our 2008 Lead Response Management Study, we were shocked to discover that 45 percent of the top 500 companies in terms of Web marketing budgets didn’t even respond a single time to a Web-generated lead.

So why do disconnects like this happen?

Most of the time the root causes are very simple:

• Organizations simply don’t understand the value of the action they’re not taking (e.g., immediate response to Web inquiries = dramatic increase in qualified leads).
• There’s no incentive for someone in the organization to monitor the activity (i.e., because no one understands the value, there’s no expectation of accountability).
• The process they have in place is too inefficient to get the expected benefit (lack of automation, inability to get information to the parties fast enough).
• Changing the process seems like it “takes away” from “more important” activities (i.e., “We need our sales reps and managers selling, not managing leads”).

The bottom line becomes massive disconnect, sales reps not hitting quota, and managers griping about sales performance.

Gerhard Gschwandtner - Founder of Selling Power Magazine

A friend of mine, Gerhard Gschwandtner, the founder and owner of Selling Power Magazine, just took some time and wrote a post on his blog about when is the best time to call back on leads. 

The post he wrote came from our landmark research study conducted with Dr. James Oldroyd of MIT that was originally presented in October of 2007 at the MarketingSherpa B2B Demand Summit 2007 in both Boston and San Francisco.  This study was the genesis for the new industry called Lead Response Management; a subset of Lead Management that focuses on responding immediately, continually, consistently, and optimally to increase contact and qualification rates of web-based leads.  The interesting information involves the incredible changes in your ability to reach people by calling on the best day of the week, time of the day and most importantly, calling back immediately; as in 5 minutes!

BEST DAY OF WEEK TO CALL

To quickly summarize Dr. Oldroyds research: Tuesday is the worst day to call, while Thursday is best.  In fact, if you call on Thursday you have a 49.7 percent higher chance of reaching a prospect than on Thursday.  Monday and Friday are almost as bad, but Wednesday is nearly as good as Thursday.

BEST TIME OF DAY TO CALL

The next stage of the research was focussing on the best time of day to call.  Early in the morning (8am to 10am) and late in the day (4pm to 6pm) are much more productive than calling between 10am and 4pm.  By calling at 8am your chances of making contact go up 164% versus calling at the worst time of the day, which is from 1pm to 2pm.

IMMEDIATE RESPONSE HAS THE BIGGEST IMPACT

Day of week and time of day make noticeable impact on contact rates, but calling back within 5 minutes versus even waiting 30 minutes increased the odds of making contact BY 100 TIMES.  And possibly more important, the ability to qualify or set an appointment also went up BY 21 TIMES.

In summary… Call back NOW!

This information has changed the lead response management strategies that companies have put in place.  It has become clear that in an internet age people want information now; they don’t want to wait.  Their attention spans are shortening, so you had better reach out to them immediately.  Don’t let a lead sit in an inbox for even half an hour; that is a big problem when most sales reps don’t even attempt a first phone call for 24 to 48 hours and only make 4-5 attempts to reach a lead.  If the average contact rate is 10% (which our research among 450 clients shows it to be) then that means only 45% of all leads ever get contacted!

When we learned this internally at InsideSales.com, we immediately designed our dialer and lead management CRM technology to capture the lead on a website, look up which rep should get the lead, dial the rep, get them on the phone, and start dialing the lead… all in 8-10 seconds on average.  We couldn’t get our own reps to be able to do it by hand fast enough by just asking them (or even mandating) to call the leads back fast enough.  The best they could seem to do was about 30 minutes, which missed the whole window of opportunity.  So our phone dialer software was the key ingredient that launched a new industry that is getting the likes of Gerhard and Selling Power Magazine, the premier media provider for solutions for sales management to recognize it as a key ingredient in the Sales 2.0 initiative.

Lead Response Management is the process of responding to leads at the optimal time to achieve the highest contact and qualification rates.

Recent research shows that quite often the ‘optimal’ time is immediately.  But many companies spend thousands of dollars monthly to generate clicks to their website.  These same companies invest tens of thousands in building a website to attract visitors.  They use analytical tools to analyze how to convert these visitors to leads.  Then they send the lead to the sales department.

The lead often sits 24 to 48 hours before it gets called back.

A recent survey done by Dr. James Oldroyd while at the Kellogg School of Management at Northwestern University shows that the majority of companies expect 4 to 5 attempts are made by their reps to contact a lead.

Why spend thousands of dollars on generating clicks, high conversion websites, and powerful analytics if you are going to let your leads sit for 2 days and only contact roughly half of your potential prospects?

The question is almost insulting, yet that is what most organizations do.

More research by Dr. Oldroyd shows that calling back a lead quickly has dramatic effects on actually making contact with and qualifying that lead.  His research says that if you can call back a lead within 5 minutes, you are 10 times more likely to contact a lead, and 6 times more likely to qualify a lead than by waiting even 30 minutes.

And if you wait more than 20 hours to contact a lead, you actually hurt your chances of contacting and qualifying your lead with each successive attempt to make contact.

Technology now exists that can trigger callback attempts within seconds.

Technology can also schedule callback attempts at different times of the day and different days of the week to boost contact rates above 85%.  Also, these solutions can automatically market to leads and continue to generate prospects every 3-4 weeks for 2 years or more.

We at InsideSales.com coined the phrase ‘Lead Response Management’.  To us it means wringing every last ounce of value out of leads by responding quickly and consistently.  Interestingly, sometimes responding at just the right time is more important that responding quickly.