Lead Response Management is Most Impacted by Lead Response Time
Highlights
- The purpose of lead management is to systemically advance leads through the sales pipeline.
- Research shows that timely lead response dramatically improves buyer engagement and lead conversions.
- The Five-Minute Rule has become a lead response time best practice. That's because lead response management research has found the probability of engaging a new lead is 100 times higher if the lead is contacted within 5 minutes, compared to 30 to 60 minutes.
Lead Response Management and the Need for Speed
According to research from the Integrated Marketing Association, the average cost to get a lead to your website is $68.00. That's not cheap when you multiply that cost by the volume of leads needed to achieve your sales pipeline and revenue goals.
However, the one lever that can significantly lower your total investment and cost per lead is lead conversion. And the lever that most impacts web lead conversions is response time.
Lead Response Management (LRM) is the process of engaging leads timely, measuring their fit and routing them to sales. It's one of those functions that may fall under marketing or sales organizations.
It best fits with the group that performs other lead management functions such as lead scoring and nurture campaigns.
Without lead response management, marketing's successful efforts in acquiring sales leads will be squandered if sales reps or SDRs (sales development representatives) then sit on those leads until they get cold.
The 5 Minute Lead Response Time
InsideSales.com (which later became XANT in 2020, and was then acquired by Aurea in 2021, and then returned to its original name of InsideSales.com) was an early leader in lead response management research. The company partnered with Dr. James Oldroyd, a Faculty Fellow at MIT, in a study that was released at a Marketing Sherpa B-to-B Demand Generation Summit.
The research found the faster you respond to a lead, the more likely you will contact and qualify that lead. While that may seem intuitive, the research brings measurability to the process. In fact, it visualizes the process with a sliding scale that shows the asymmetrical relationship between response time and making contact with buyers.
The study also found that for each tier of delayed response (i.e., responding in 20 minutes rather than 15 minutes) the total percent of leads qualified dropped 4.3 percent and close rates fell about 2 percent.
The research has since been dubbed "The 5 Minute Rule" to reinforce the finding that when sales reps respond to leads in under 5 minutes, their likelihood of contact and qualification rises steeply.
Lead response management research shows the probability of engaging a new lead is 100 times higher if the lead is contacted with 5 minutes, compared to 30 to 60 minutes.
Click to Tweet / XFrom three decades of experience in implementing lead management systems, I find the research to be valid with one caveat. Vendors with strong brands are afforded more time.
Buyers will grant them additional leniency because they are intrigued, curious or familiar with the brand and don't want to miss out on what could be their best option.
However, vendors with poor or no recognized brand who do not gain early engagement will not get the call back or a second look. They are more likely to be excluded from the sale opportunity.
Maximum Contact Attempts
The next question is, when sales reps fail to make contact, how many attempts should be tried before they transfer the lead to a nurture marketing campaign?
A decade ago, research from the Ovation Sales Group found it took 3.68 calls to reach a prospect. That figure has steadily climbed. Today, most sales consultants recommend 8 attempts.
But that stands in stark contrast to real world results. Research from Sirius Decisions advises that the average sales rep makes only two attempts to reach a prospect before giving up.
There are two best practices to consider. First, it's a good idea to leave a voicemail with each attempt to show your commitment and to increase buyer familiarity with your company. Second, if telephone contact is not made, consider engaging in social channels before giving up.
A 3-Step Process to a 5 Minute Lead Response Time
Understanding the 5 Minute Rule and its impact is one thing. Being able to consistently achieve it is another. According to a study by Drift, only 7 percent of the respondents surveyed are achieving an average lead response time of 5 minutes or less.
Here is the three-step process we use with clients to achieve rapid-response lead conversions and plug the lead management leak.
Technology Automation
Lead management technology is needed to capture, assess, route and measure lead response time. Remember, not all leads deserve immediate response. Your Marketing Automation System should score the lead to measure buyer fit, purchase propensity or other factors that warrant SDR or salesperson engagement.
When the lead is qualified, or otherwise merits sale rep follow up, the MAS system should immediately route the lead to the CRM system, create an activity for follow-up and send an email alert to the salesperson with a link to the activity.
An additional technology is conversational marketing. It can actually reduce lead response time to zero minutes by engaging the prospect in real-time on your website using bots, online chat, integrated voice and screen sharing tools. For example, chatbots with natural language processing can engage and qualify website visitors using the same questions an SDR would ask over the phone.
Design, Streamline & Optimize the Process
The lead follow-up process should be streamlined, optimized and then solidified in a marketing and sales Service Level Agreement (SLA). The SLA will specify the process and timeline to follow up with each type of lead.
For example, a visitor submitting a Contact Us form will be assigned one process while a visitor downloading a white paper will get another. When leads are not followed up within the maximum time period, the lead should be escalated to an alternate resource and the sales manager.
Measure and Adjust
What gets measured gets managed. Time to response must be measured if the company is to improve lead conversions. Real-time measurement should be done with a lead management dashboard that brings visibility to the most important metrics.
Additional analysis should be done with lead management reports that identify gaps or performance improvement opportunities. These reports show things like average response times and conversions by salesperson, lead type, product interest or line of business.
Follow these steps and you will maximize early contact, qualify more prospects, move them through the funnel faster and reduce lead leakage.