With 2013 wrapped up, if I asked you how much your company spent last year to generate marketing leads, could you tell me? Could you tell me the percentage of those leads that your company followed up on?
A January 2013 study by eMarketer predicted total digital ad spending in 2013 would be $118.4 billion. With digital advertising representing 12.5 percent of the annual marketing budget (see Gartner infographic), businesses spent a lot of cash on generating new marketing leads in 2013.
What is truly staggering is that despite this massive investment, the average company follows up on only half the inbound leads they generate.
Would it shock you to learn that the average company makes only one attempt to contact a lead by phone and that the average response time is 18 hours? Or that the average number of emails sent to new leads is 0.9 with an average response time of 19+ hours?
“The average company is bad to terrible at responding to their marketing-generated inquiries,” according to the 2012 Retrospective on the Lead Response Management paper from InsideSales.com.
Sales managers, marketing leaders, business owners, partners and investors are aware of the problem and the wasted time, money and effort in not following up on these leads in a more persistent and responsive manner. But despite this awareness only one percent of companies can follow up on an inbound lead inside five minutes
The high cost of generating leads
Generating an inbound lead costs anywhere from $15-$500 depending on company size, industry, methods used and product.
The imperative and the new competitive bar for excellence is to follow up on those leads inside five minutes. The reason is staggeringly simple: The odds of contacting a lead if called within five minutes versus 30 minutes are 100 times greater.
Given that the above research indicates that the average company does not follow up on half of inbound leads — and on average they follow up on the rest of the leads nearly two days later — I think it’s useful to review why companies don’t follow up on leads and also helpful to look at the impact of following up on leads immediately.
Top 10 excuses for not following up on leads
- We don’t get any inbound leads.
- They are not qualified. (See video: Anthony Iannarino qualified leads & unicorns; it also refers to a book by Andy Paul, “Zero Time Selling.”)
- They left a phony telephone number, so we can’t call them.
- The leads are from companies outside our target market.
- The leads are not in a role that we are targeting; they are consultants, competitors, students, job seekers or from out of our territory.
- I tried calling five times and left voicemails, and then I gave up.
- The lead used a personal email address but did not list a legitimate company name.
- We get too many junk leads, so we assume all leads are just “tire kickers” (i.e., one in 1,000 leads close).
- The lead asked a question in the text box that we couldn’t answer, and it’s just too hard to get answers.
- The salesperson who received the lead already has too many deals to work on.
Should you follow up on all leads?
Every new lead should be assessed and followed up in real time … but not every lead is ready to buy.
Today buyers leave light touches early in their buying cycle. Many companies are either oblivious, unable to detect the visit or don’t bother to follow up as they are “not sales-ready.”
Buyers may visit your website six months before they are ready to make a purchase, in the Identify or Mentoring phases (see figure below) at the outset of the buying process. And they may wish to conceal their identity, which means marketers must work harder to get the buyer to opt in to be contacted.
Copyright 2014 Mark Gibson.
In the early buying stages, buyers look for help and seek to understand the risks of various approaches. They are not looking for a call from a sales closer looking to make his number for the month.
The impact of following up on leads immediately
Our consulting business has used an inbound marketing platform for the past five years, and we generate on average 45 inbound leads per month for our various eBook, whitepaper and webinar offers.
Since rereading the InsideSales.com report on responsiveness, I have tried where practicable during business hours to contact inbound leads within five minutes.
The results are astonishing. Here’s a recap:
- The prospect picks up more than 50 percent of the time on the first dial, (where they leave a valid phone number).
- The prospect is surprised but not displeased to get the call and is not at all defensive.
- Conversations last anywhere from 10-20 minutes and lead to a next step in about 40 percent of cases. My goal is to help them on their journey and understand if our services can create value for them in the future.
- I tell the buyer to look for an email summary from me within five minutes.
- I generate a follow-up call summary email within five minutes of the telephone call with next steps and links to resources. I also receive a signal when buyers open my email and when she clicks on any links, which is typically within a few seconds of sending the email.
- Although I lack data to support this yet, my observation is that sending email within minutes of a conversation results in higher open rate and better engagement in next steps.
- It’s too early to declare victory because of our long cycle time, but the resulting engagement and qualification has doubled our pipeline.
The concept of separate sales and marketing roles is slowly adapting to a more useful, universal role of buyer facilitation, where sales and marketing organizations work in tight alignment and cooperation to achieve shared goals. Accelerating this process creates competitive advantage.
Service level agreements between sales and marketing and agreement on lead scoring and hand-off are critical in implementing inbound marketing methods to generate leads in the first place and to meet responsiveness expectations and sales results. But these are first base in a transformation to a combined customer facing unit to facilitate the buyers journey from first lead to support call.
In 2014 marketers are salespeople, salespeople are marketers and responsiveness is the new competitive differentiator. If you follow up on your new leads inside five minutes, you will speak to more prospects, qualify more opportunities and grow your business more profitably — guaranteed!
Mark Gibson is CEO and founder of Advanced Marketing Concepts (Admarco), a B2B marketing messaging agency founded in the UK in 2004 and now based in the Bay Area of San Francisco. Admarco helps sales and marketing organizations develop better content, better content process and improve content ROI. Engagements include content strategy and frameworks to create content that resonates with buyers to drive inbound leads, and conversation support tools to connect with buyers. Contact him at firstname.lastname@example.org.