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Are You Wasting Your Investment in Lead Generation?

Posted by Darrin Fleming on Apr 28, 2014 2:38:00 AM
Darrin Fleming

improve lead follow upEach year InsideSales.com conducts an audit of lead-response patterns among 14,000 companies to see how quickly and effectively they respond to Web-based inquiries. (They define response time as “the period between the submission of a Web lead and the first contact attempt by a company representative.”)

Takeaway #1: U.S. companies are spending more on lead generation, but they are not improving in lead response times.

While companies increased lead-generation expenditures by 82% between 2005 and 2009), just 37% of these companies responded to Web leads within an hour. Meanwhile, 24% took more than 24 hours to respond. [Harvard Business Review]

Takeaway #2: Many companies are wasting their investment on lead generation.

Of the 9,538 companies that received a “test lead” as part of the Lead Response Report, 47% did not respond at all. Forbes has estimated that B2B companies spend between $30 and $200 per lead generated by marketing. As the Lead Response Report points out, any delay in response times to those leads is a waste. “It is highly likely that company executives do not realize the potential return on investment (ROI) gains that can occur with improved lead-response management.” [Forbes]

Takeaway #3: Many companies are giving up on leads too quickly.

InsideSales.com research indicates that sales professionals, on average, call leads 1.3 times before giving up. Results from the Lead Response Report indicate that the median number of contact attempts (for those companies that responded at all) was 1; the average was 2.2. Ken Krogue, president and co-founder of InsideSales.com says salespeople should be making between 8-12 follow up calls in order to be successful. [KenKrogues.com]

We probably all agree that it’s better to follow up sooner rather than later to inbound marketing leads. Years ago I learned this lesson firsthand, before marketing automation was even a thing. After we sent an email blast, I called a lead who was still viewing our Website by using a real-time email tracking program. His first question was, “How did you do that?” At the end of our chat he asked me to send a proposal; we closed a deal the following week.

We routinely tell ROI Selling customers who purchase our Value Calculators that they need to follow up within five minutes to a Web lead. That’s how much response time matters. When you consider how much inbound marketing has grown, response time might even matter more. It is unlikely today that I would even be asked how I knew whether or not someone had visited our Website, because most companies are using tracking tools and many customers have come to expect that kind of custom and immediate response.

Customers take it for granted that we’re watching their online behavior and responding accordingly. Not only that, but I would venture to say that their attention spans are shorter. I can remember calling on someone within hours after he visited our Website and he had no recollection of it.

Lead response times are just as important as lead generation. If your account teams complain about junk leads, ask them how quickly and persistently they’re following up. It could be that with some simple adjustments in process and behavior you could realize the full potential of your investment in lead generation.

How quickly do you respond to leads? Have you ever closed a deal because you responded within minutes to a Web visitor? Share your thoughts in the comments section.

[Image via freedigitalphotos.net / Danilo Rizzuti]

Topics: Demand Generation Solutions