Research-Web Leads Beat Cold Calls 8 to 1
The web has disrupted everything we know about sales and marketing. Even the time-honored practice of cold-calling has fallen by the wayside, and face-to-face selling, advertising, yellow pages, and direct mail are limping along. But in return, the Internet is opening up the greatest opportunities ever available for sales organizations who learn it’s secrets.
XANT was originally founded to generate cost effective leads through outbound cold-calling technology. We were the first web-based sales tracking Lead Management CRM system with fully integrated dialers and voice messaging tools … and though far ahead of the competition, we were obsolete before we launched.
Why? Because we thought we were building the ultimate system for cold-calling, and cold calling had already become obsolete, we just didn’t know it.
At the end of 2004 my partner Dave Elkington and I had developed nearly two dozen telephony ‘Power Tools’ like automatic dialers that we embedded within online CRM solutions and we were getting crazy productivity increases helping our clients with cold calling. Our sales were picking up and things were going well. So much so, that we decided to pull together a test to see just what we really could do.
We had already built a sales team of ‘closers’ that worked the rapidly increasing leads from our website. Having the name of one of the fastest growing category of sales helped. We were learning about Pay Per Click and Search Engine Optimization of necessity while we were busy developing a full suite of lead generation and sales management tools.
Be default we used our web leads as the control in our little experiment. We noticed that our most successful clients were using web-based demand generation software and using our phone dialer software similar to us.
We budgeted an amount equal to that spent on our web strategy and hired a team of lead generation specialists, cranked up our power dialer and our ‘Power Tools’ and proceeded to dial like crazy. We tested list after list. To our dialers and CRM we added auto-responders, drip campaigns, blast emails, and automated voice messaging. It took months to pull everything together but we were soon getting ratios better than during my glory days at Franklin Quest (now Franklin Covey) where I pioneered these core techniques a decade earlier.
We gave the leads to the same closers that worked the web leads so there wouldn’t be a bias in skill-set. We expected our cold calling system to dominate the web leads.
But the web leads out performed in actual sales closed by a factor of eight to one.
We couldn’t believe it. With our best technology the cold call leads cost eight times more to close sales than the web leads. And the results were maintained long enough to make the difference obvious.
Why? We believe ultimately that the web leads found us because they needed us, while the cold call leads we found had interest, but had no urgent need. The average sales cycle of the web leads was 9 days, the lead gen leads were averaging nearly 2.5 months.
So what did we do?
We changed our focus. We moved from a technology company for cold-calling to focus on the new-found sweet-spot where web-based lead generation and phone sales converge. We found a huge need out there because most companies suck at generating leads and doing anything with them once they have them.
Key Factor: It’s all about controllable sources of highly qualified, low cost leads.
We shut down the lead generation team, doubled the web leads, added more closers, and starting looking around to figure out what we should do with years of cold-calling technology.
During this time we were getting more and more inquiries from companies that either generated leads or were buying leads. Their common problem was that they didn’t call back enough times to reach the leads, or they let them sit for an average of 48 hours before they picked up the phone.
Then a light went on.
We immediately re-tooled our dialers to redial different times of day and different days of week until we made contact. We designed multiple lead response management tools that let companies put forms on their site that captured and routed leads, then triggered callbacks within seconds. We found we could help clients make contact and pull more value out of existing leads.
It was obvious the web provided productive leads at costs far below anything we had experienced in the past. This experiment opened our eyes and helped us notice that the web had changed everything else we had previously thought about sales and marketing as well.
The big question then became, could we get enough Web Leads?
We would love to hear about your comparisons between cold calling and web-based leads and what your results were.
Free Lead Resonse Management Study
Answer the question, “When should companies call Web-generated leads for optimal contact and qualification ratios?”