When should you follow up with online prospects?
For example, if you run a SaaS business that demos products, how quickly should you follow up with customers who ask for a demo?
In the first five minutes? Within the hour? Within a week? What’s the optimal time?
These questions are even more important with the current, prevalent online selling process.
The current online selling process
More and more leads are being generated online for SaaS companies, service companies, and everyone in between. Previously, most businesses relied on cold calling to get in touch with customers. Now, more and more companies are relying on inbound marketing to generate leads.
This results in buyers and sellers no longer collocating during sales transactions. Most communication is taking place over the phone, via Skype, over the Internet, or through email.
The good news is that this cuts down on costs since sales teams don’t have to travel as much. The bad news is that sellers aren’t privy to as much information as they once were. They can’t rely on non-verbal cues and things of that nature to know how prospects are responding.
This leads to a decreased understanding of the buyer’s thoughts. Formerly, sellers would be in the same room and could watch how buyers responded to different questions and sections of a presentation. They could see if the audience was paying attention or nodding off and falling asleep, but not anymore.
It also means that people expect faster response times than they did in the past. When it came to visiting prospects in the old sales model, companies could respond only so quickly.
Now, buyers have higher expectations than ever before, and competition is even stronger. Let’s discuss a study reported in an article in the Harvard Business Review titled “The Short Shelf Life of Online Sales Leads.”
How fast is fast enough?
In a study conducted by David Elkington, CEO of InsideSales.com, and James B Oldroyd, assistant professor at SKK Graduate School of Business at Sungkyunkwan University, it was found that most companies don’t respond fast enough to online sales leads and that responding faster leads to increased sales.
Out of 2,241 U.S. companies audited for the study, 37% responded to leads within an hour, 16% within 24 hours, 24% took longer than 24 hours, and 23% of companies never responded at all. For the companies that responded within 30 days, the average response time was 42 hours.
Here’s where it gets really interesting. In another study that evaluated 1.25 million sales leads, it was found that companies which contacted people within an hour were sixty times more likely to qualify leads than companies that took 24 hours or more. Yes, that’s right, sixty times more likely.
Here are a few more interesting stats as reported in Forbes:
“The study revealed that the odds of making contact with a new lead are extremely high if you call within the first 5 minutes of submission,” said Elkington. “The odds drop off dramatically by the first 30 minutes. Specifically, a rep is 100x less likely to make contact if the first call is made 30 minutes after submission. The odds of making contact drop by 3000x if the first call is made 5 hours after lead submission.”
From all the stats gleaned from these impressive studies, we learn that the best time to follow up with online sales leads is within the hour, and that following up within 5 minutes is even better since there’s a 100x decrease in the likelihood of making contact if the call is made 30 minutes after the lead was generated.
So how should you respond to this study?
A step-by-step guide
Here’s a step-by-step guide for how you can take advantage of the findings in this study and implement a faster response time to leads:
Step 1: Create a chart of your current follow-up process
Begin by outlining the steps that take place once your leads come in. Map out the process in order to know exactly how you currently follow up with online leads. This will identify steps that can be improved or removed and give you something that can be measured.
Click on the image above to see a larger view. This is an example of optimized lead flow and follow-up process (Source: fourquadrant.com).
Step 2: Measure the current response time
Once the process steps are clear and on paper, measure how long it takes you to contact customers. This will give you a benchmark to measure against.
It’s best to use a CRM like Salesforce or SugarCRM because they provide a system where details can be recorded for each customer (but the most basic way to track would be with an Excel spreadsheet updated by marketing once they deem a lead to be qualified).
Most CRM systems allow you to run reports, but before you get into that, you have to define your different lead statuses for your company.
When a new lead comes in, it might have an “open” status which is changed to “contacted” once someone has reached out to the lead.
In this post, I will be going through Salesforce in some detail since this is a system I am very familiar with, but I’m sure that similar features are also present in other CRM systems. (For SugarCRM, check out the following section on workflows here.)
Above is an example of lead status fields in Salesforce. These can be customized to suit a company’s needs, but the first four values are pretty common across the board. For now, let’s focus on the first two; i.e., when a lead comes in, it is open and we want to know how long it takes before the status changes to contacted. As discussed earlier, this is a very important metric.
To achieve this, we need to add a new custom field to our Salesforce lead record and create a workflow.
The above screenshot shows where you need to go in Salesforce to create a new custom field in your lead record. You would create a “standard” custom Date/DateTime field (Workflow Rules can’t update Formula Fields). So, in this example, it would be called something like “Status Change Date.” What this field will do is record the date and time when the status of the lead changes from “Open” to “Contacted.”
Then you would create a Workflow Rule that is triggered when the Lead Status is changed to update the Status Change Date using the formula:
TODAY() if you just need the day
NOW() if you need to track hours or partial days
Then you would create a custom Formula(Number) field like “Status Duration” and use a formula like:
(Status_Change_Date__c – DATEVALUE(CreatedDate))
if your Status Change Date is in Date format and you want just the number of days
(Status_Change_Date__c – CreatedDate) * 24
if your Status Change Date is in DateTime format and you want the number of hours
So what we have now is an ability to see the time duration from when the lead came in to when it was contacted.
Once you have this defined, you can create a report where you can define filters to see all leads which are within the acceptable contact period and those which fall out of it. For instance, you can run a simple report and see how many leads were contacted after 1 hour or 1 day. Reporting functions in CRMs should allow for this; Excel will require more manual data entry and calculation.
Once you’ve measured your response time, you have a benchmark to test against.
Step 3: Create a new improved process
Now that you know how long it takes you to respond and what the process is, you need to investigate why there are delays. Do the sales reps know when new leads come in? Are they too busy with other activities, such as mindless data entry into the CRM? Or, is there some other part of their daily workflow that’s getting in the way?
Has the lead contact rate metric been discussed in sales meetings to create awareness and spur improvement? Are there any unnecessary steps involved or even a missing step, such as leads coming into the system that aren’t getting assigned to an appropriate sales rep?
Another problem can be that sales teams are getting leads they don’t want to sell to. The definition of who gets followed up with is very important and needs to be agreed upon. Marketing and sales need to define leads, agree on who they are, and generate those types of leads. Here are two common approaches:
- If the corporate strategy is to push a certain type of product, then marketing finds people who fit the product buyer mold. For example, if a software company wants to push an enterprise security product, then marketing people need to go after Fortune 500 companies.
- If salespeople are good at selling to person X, then marketing finds person X. For example, if a sales team feels they can close deals fastest with purchasing directors of advertising companies, then that is the profile marketing needs to go after.
But it needs to be one or the other. Sales can’t be expected to sell to person X and have marketing give them something else.
Depending on the size of your organization, you may want to do a workshop with your sales reps or with some of them to involve them in the process. This especially helps if the changes that need to be implemented require organizational agreement and buy-in.
Just remember that you’re creating an improved process. You need to eliminate any unnecessary steps, figure out how you can speed up the necessary ones, and get everyone on board with the new, streamlined process that you can test against the benchmark.
Step 4: Evaluate any tools that can help you improve
After figuring out why there are delays and which steps can be removed or improved, it’s good to evaluate how the process can be automated with such things as notifications and automatic assignments for your sales reps.
Most CRM tools allow you to set up workflows based on the process you would like. You can even go as far as having the first contact completely automated using the email function of your CRM tool. This will depend on your sales process.
If your process involves immediately calling contacts, there are tools which measure metrics such as:
- Call frequency
- Response rate
- Follow-up rate
These vendors facilitate contacting leads over the phone and provide an additional intelligence layer for things like the best time to call a particular lead. This removes a lot of the guesswork for sales reps on who to call when.
In this screenshot of Inside Sales’ PowerDialer, a sales rep simply has to press “Next Call,” and the lead that is best suited to be called next will appear. This ensures that the lead requiring a response “right now” is being called. At the same time, all the metrics on the call will be tracked as well, such as if the lead cannot be reached and how many times a sales rep attempts to call.
Going even further, you can use tools that will give you insight as to whether the leads are engaged with the information you have shared with them on email or sales pitches. These tools would tell you who else in the company is engaged with your material and when you need to follow up.
It’s important to consider which specific step in your process technology can facilitate. If you discover that you don’t know how often your sales reps call a lead, then you need something to measure that. Because if you can’t measure call frequency, then you will be missing essential metrics for your lead follow-up process and won’t be able to track other metrics, either, such as response rate or follow-up rate.
Step 5: Test the new process
Now that you’ve created a new process and, hopefully, selected tools that can automatically measure and report response times for your sales calls, it’s time to test and see if the new process shows improvement over the old one.
The most important thing to remember here is that you don’t want to finalize the process unless there’s improvement. The whole point of measuring a benchmark and then testing it is to make sure your new process is an improvement over your initial process. Without testing and measuring, there’s no way to know for sure that the new process improves your response time. You really need to put on a virtual lab coat and measure the results before and after changes have been made.
If your response times do improve (which they should after removing unnecessary steps and automating parts of the process), you can move on to the next step.
Step 6: Train your team
Depending on the changes you’ve made (whether they are changes in process, tools, or a combination of both), you’ll need to train your team. This will help generate awareness and also help with adoption.
This costs some time and reps will be away from core tasks, but downstream it will benefit your organization.
Step 7: Establish key metrics
Your new and improved contact rate should be tied to data like an improving number of replies, a higher percentage of leads being closed, and increasing revenue. These are things you should continue tracking by connecting the data to metrics that are helping you improve your bottom line.
You’ll want to create a dashboard where reports show the real impact of the contact rate and follow-up rate improving. For fun (and as an incentive), you can create a leaderboard of the reps who close the most deals and improve their contact rate the most.
Since it’s possible to improve immediately and then slip back into your old ways, measuring key metrics will help you maintain any improvement you generate.
So how do you measure up?
It’s imperative for SaaS companies to respond to inbound leads faster than their competition if they want to close more deals. Service companies need to respond faster as well.
No one likes waiting two or three days to hear back from someone they emailed, and the same is true when it comes to inbound-generated leads for service and SaaS businesses. The Internet has made customers more impatient than ever before and has made it easier for your competition to respond faster than you do.
If you follow up with online sales leads, it’s important to ask how you measure up with this study because your success rate decreases in a matter of minutes, not hours or days. Lots of companies are investing in fancy tools like HubSpot, Salesforce, etc., which is great, but it’s not going to help much if you don’t follow up with your prospects quickly enough.
It’s good to invest in tools that help you generate and nurture leads, but it’s also important to follow up with prospects as quickly as possible. It’s very likely you’re missing out on business by not being structured or disciplined when it comes to responding to online leads.
By responding faster, you’ll reach more open prospects that you have been missing. And if you can respond within five minutes, not only will you increase the chances that you’ll be the first company they talk to, but you’ll also wow them in the process.
So, if you ask me, following up within 5 minutes is the best time frame for following up. What do you think?
About the Author: Khuram Hussain is the CEO and co-founder of Fileboard, a sales app that helps companies respond faster to online leads and learn more about their customers with instant notifications and slide analytics for online presentations. Visit their site today to learn how they can help you follow up faster and more effectively with online leads.