Market Analyst
Dun & Bradstreet
Canada
It's a seemingly innocuous question, asked by the Harvard Business Review in the March 2011 issue: "Are you confident that your company is effectively handling potential customers’ online queries?"
If the research in an article entitled "The Short Life of Online Leads," is any indication, there's a lot of companies out there that would be lying if they answered "Yes."
According to authors James B. Oldroyd, Kristina McElheran, and David Elkington, only one company in four out of over 2200 audited followed industry best practices for lead qualification by contacting their incoming Web leads in five minutes or less. Following this best practice is significant because, as the article states, the "5-minute contact rule" increases lead qualification rates by seven times over waiting even an hour, and over 60 times compared to waiting 24 hours or more to make an initial contact.
Which is a big problem, since the data revealed that 24 percent of the audited companies waited longer than 24 hours before making their first contact attempt, and the average response time for all companies audited was 42 hours—assuming they even responded at all.
Considering that 512 out of 2241 audited companies (another full 23 percent) never responded a single time, that's hardly a fool-proof assumption.
In light of the Harvard Business Review findings, it's not surprising that sales industry researchers like Gartner, IDC, and Reed Business have estimated that anywhere from 40 to 70 percent of all sales leads generated never get contacted. Such hideously bad lead management practices are even more damning when you consider that 40 percent of those uncontacted leads will buy within 12 months of their inquiry, and nearly 80 percent will buy within 24 months.
As Oldroyd, McElheran, and Elkington state, "It’s already evident that most sales organizations need new tools and processes to meet the demands of the online age"—an age where the battle for Customer 2.0's attention, brand equity, awareness, and budget is primevally fierce.
The concepts are simple, but require hard, realistic evaluation. Ask yourself:
1. "Do we even respond at all to our incoming marketing-generated leads?" As noted, one in four of you can't even respond affirmatively to this question.
2. "If we respond, are we doing it fast enough?" 25 percent of you can wipe your foreheads in relief and say, "Yes." The rest of you need to take a look at your process.
3. "Even we are doing those things, do we have the right processes in place to make sure it happens consistently?"
4. "Do we have the technology in place to leverage the process to its maximum potential?"
5. "Do we have the data intelligence to adjust and update the process as necessary?"
If you or company answers "No" to any of these questions, now's the time for sales management to stop burying their proverbial heads in the sand and make real change. If you're one of the 26 percent doing things right, keep fighting the good fight. If you're not, get on the phone or walk across the hall. Ask your VP of Sales/CSO/CMO/CEO why your company is throwing away half of its marketing budget and sales pipeline simply because it lacks a good lead qualifying process and the technology to facilitate it.
