It’s been a long time since I’ve posted anything on this blog, mostly because I’ve been knee-deep in doing research, and working with clients. But I’ve decided to post today to talk specifically about one particular experience talking to a client about how much the XANT system had made a difference in their sales performance.
SEO business optimization experts OrangeSoda improved individual sales rep performance 300%, and started seeing three times the monthly number of account closes.
But just as much as the productivity gains (which I was naturally gratified to hear about), something else stuck out to me, which was that even before they started using the XANT system, they were doing a lot of things right. They had a good system in place to acquire leads and close sales. They had a great management team that had developed a scalable, repeatable process.
The problem was they simply hadn’t fully learned yet that most sales are won and lost at the top of the sales funnel, not the bottom. It’s not that their pipeline was non-existent or stagnant. They simply weren’t getting the results they could have because they hadn’t put enough focus on the lead qualification process.
From my research looking over data sets from companies like Reed Business, CSO Insights, Gartner, IDC, and Forrester, when it comes to the general process of lead management they all generally agree:
- Somewhere between 40 and 60 percent of all sales leads EVERYWHERE go uncontacted. Meaning, approximately half of all marketing dollars spent get wasted, not because the marketing department targeted the wrong people, but because the leads marketing produced were never given a chance to convert.
- Of all the leads that go uncontacted, 40% of them will buy from SOMEONE in their target space within 12 months—and 80% will buy within 24 months.
So why does this matter? Because based on our own research surveys of over 3,000 companies, 90% of businesses have no idea what this actually means for their sales process.
- Based on our research, the average number of total lead qualification “touches” done by sales reps is less than four, and of those “touches,” less than two are actual phone calls.
- The average response time to a fresh, newly-generated lead inquiry is between 40 and 60 hours—even though key industry research shows that the best time to respond is in 15 minutes or less.
- 80% of sales happen AFTER the fifth contact attempt, and an additional 10-12% happen sometime after the tenth attempt—even though the average sales rep makes less than four total sales “touches.”
It’s mind-boggling but true: companies are losing up to half of their potential sales (and throwing away half of their annual marketing budget) because they don’t follow up on their sales leads fast enough, persistently enough, or intelligently enough.
Companies Take Too Long to Respond
The average company takes over 18 hours to send a first response to a newly-generated Web lead. 18 hours. And when that attempt happens, it’s usually an email, not even a phone call. The first phone call attempt? After 44 hours. (All this when industry best practices state that for the “hottest” of leads, response times should be 15 minutes or less.)
And to make matters worse, most companies make the mistake of emailing first, then calling, when research sponsored by respected business school SKKU in Korea shows that calling first, then emailing is 90% more effective.
A company that calls Web-generated leads within 15 minutes, follows up through some other medium (email, fax, voice message), then makes an additional 4-5 call “touches” and 2-3 media “touches” over a period of 10-14 days yields 300% more contacts. And if a typical sales process holds to form, more contacts naturally scales to more qualified prospects.
Companies Don’t Make Enough “Touch” Attempts
The Bridge Group has noted on numerous occasions that the average number of sales “touches” needed to contact a sales lead is somewhere around 7 (at last check 6.8 was the exact number). Yet as our aggregrate research data shows, the average sales rep makes a grand total of 3.59 touches—of which less than 2 are actual, live phone calls. Remember our numbers from above: 80% of sales happen after the fifth touch, and another 10-12% happen after 10 touches.
Very Few Companies—Almost Nobody—Follows Best Practices
So let’s review: companies need to contact “hot” leads fast (within 15 minutes), need to make at a bare minimum seven or eight touches to even give themselves a remotely realistic chance of contacting and qualifying a prospect.
But only 1.6% of companies, out of over 3,000 analyzed, made even four total touches on their leads. Even more disturbing is the number in the top right: during our research, 37% of companies never even responded to a sales inquiry at all. Ever felt like a company/sales rep didn’t particularly care whether they got your business or not? There’s a nearly 4 in 10 chance that it’s not just in your head.
We’re not trying to point fingers here. But the bottom line is if your sales team is struggling to make quota, and actual sales aren’t getting anywhere close to expected forecasts, it’s time to take a good, hard look at your lead generation processes, people, and technologies.
Free Lead Resonse Management Study
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