Maximize Sales Performance With Lead Response Analytics
Leads are valuable, and lead response is critical to make sure that the value isn't wasted. Every lead that falls through the cracks is money that your company is kissing goodbye. And sales people never want to miss a possible opportunity.
The problem is getting worse as marketing automation technology drives an ever increasing volume of inbound leads for B2B sales teams. In this post, we show how lead response analytics can shine a bright light on what's happening with your leads, so you can maximize their value and improve sales performance.
Good lead response is really important in B2B sales. InsideSales.com set the standards for lead response management ten years ago with its Lead Response Management Study. This study established that calling leads on the right day of the week and time of day make a huge difference for contacting and qualifying leads.
For inbound leads, the odds of contacting a lead decrease by 10 times in the first hour. The odds of contacting a lead drop a whopping 100 times for leads called in 5 minutes versus those called in 30 minutes.
InsideSales.com followed up with a "Lead Response Audit," which studied how 4,732 companies were responding to leads. The numbers were eye opening.
- 4.7% of leads were called within the optimal 5-minute window.
- 28.4% of leads were only sent an auto-response email with no call to action.
- 50% of leads did not receive any kind of response.
In 2018, Drift tested lead response time of B2B companies and their research showed that 58% of companies never responded at all to inbound lead requests. Drift's numbers also showed that 90% of companies didn't respond in under five minutes.
These numbers are horrible. And my experience tells me that they are typical of most modern B2B sales teams. If you believe that valuable leads are falling through the cracks at your company, you need to take action. And quickly.
Lead response analytics gives sales leaders the visibility that they need into what's working and what's not working with leads.
In this post, we'll cover three things
- The impact of lead response on the cost and value of leads.
- Why the CRM is horrible at lead response management.
- The benefits of lead response analytics.
We'll finish up with an example of how Sales Rep Scorecards can automate lead response analytics at the sales rep and sales team levels.
The Impact of Lead Response on the Value of Leads
The math is simple. Let's use the InsideSales.com numbers and analyze a scenario where average contract value is $10,000 and your conversion ratios look like this:
- Inbound Lead to Demo Ratio = 5%
- Demo to Opportunity Ratio = 50%
- Opportunity to Deal Ratio = 30%
In this example, the value of an inbound lead is $10,000*.05*.30*.50 = $75.
But poor lead response numbers mean that the "actual" value of a lead is much higher than $75. The problem is that the Inbound Lead to Demo Ratio is based on the entire set of inbound leads. If only a fraction of the inbound leads are getting the necessary follow up, then the "actual" value is much higher than $75.
- If only half of the leads are getting a response, then the actual value of an inbound lead is doubled to $150.
- If you exclude the leads that never get a response (50%) and those that only received an auto email (28.4%), then the percentage of leads with a reasonable response is only 21.6% and the value of a lead is $75/.216 = $347.22.
The conclusion is sobering. If lead response is poor, then a subset of your leads are driving your business. The value of your leads is higher than your original calculation, which means you are wasting a lot of value for any leads that don't get enough response.
This means that an investment in better lead response can generate a big return in terms of deals moving through the pipeline. In the example above, every 100 leads that can be saved is the equivalent of picking $34,722 up off the floor and investing it back into your go-to-marketing engine.
Why the CRM S*cks at Lead Response Management
There are two big reasons why the customer relationship management (CRM) system is horrible at lead response management. The first is the scale of leads that are being generated by modern B2B marketing teams. The second is cross object reporting, which is particularly challenging in the case of Salesforce.com, the leading CRM.
The CRM is great for tracking data associated with leads, but it's bad at keeping track of a large volume of leads. Most modern sales people are managing hundreds or thousands of leads and contacts at any given time. It's not possible for a sales manager and a sales rep to drill into all those leads and contacts. They need help to figure out which leads and contacts should get attention.
This is where cross object reporting fits in. Cross object analysis in CRMs like Salesforce is very painful.
Best practices for lead response management say that sales managers should be tracking response time. But the information needed to calculate response time is in different data objects. When a prospect fills out a lead form, a time stamp is created on the lead object. When the sales person calls the lead, a time stamp is generated on on the task object. To figure out response time, you need to do math between these objects. Not fun.
Another best practice is to contact leads 12 times (InsideSales.com). In InsideSales.com's Lead Response Audit, only 9.4% of the leads were contacted 12 times.
Sales managers need to know the number of calls and/or emails for each lead or contact. This is not easy to calculate for large number of leads. Again, cross object reporting makes it difficult. In Salesforce, info about calls and emails is on the task object. It sounds like it should be simple, but counting the number of calls and emails at the lead level turns out to be a lot of work.
The Benefits of Lead Response Analytics
Lead response analytics gives visibility into activity levels for individual leads and rolls up the leads to the sales rep level.
With lead response analytics, sales leaders can see if leads are falling through the cracks and take action to capture the value of those leads. Here are four examples of how lead response analytics can help.
1. Measure and enforce lead response time targets. The benefit of contacting leads within 5 minutes is compelling. You can only improve performance if you can measure performance. You'll need an automated solution to measure lead response time for a large number of leads.
2. Assess number of touches and re-cycle or re-assign low- or no-touch leads. With large numbers of leads, you'll need an automated solution to count the number of emails and calls for every lead. With these numbers, you can set filters to identify leads that have have not been contacted or have low numbers. These can be recycled easily if you have a sales engagement tool like Outreach or SalesLoft. You may also re-assign them to a different sales rep if they have zero or low contact numbers after a certain period of time. This can really motivate your reps to contact their leads.
3. Take advantage of lead scoring for prioritizing activities. If you are using lead scoring technology, then it makes sense to prioritize sales activities with high scoring leads. Lead response analytics makes it possible to sort high scoring leads and see whether or not they are getting enough touches from the sales team. If they aren't getting enough attention, then they can be recycled or reassigned.
4. Optimize the number of reps needed to handle the existing lead volume. Sometimes there are too many leads for the number of sales reps. Lead response analytics can be used to figure out the number of leads that can be touched with the right speed and volume by an average sales rep. This information can be used to figure out the optimal number of sales reps.
How Rekener Automates Lead Response Analytics
Rekener's Sales Rep Scorecards automates lead response analytics. With advanced cross object reporting, Rekener does three things.
- Integrate data from multiple objects and different data sources;
- Join data to show volume and speed of response for every individual lead;
- Roll up leads to the sales rep level; and
- Filter based on multiple variables to reveal leads that can improve sales performance.
This screenshot is an example that shows sales activity for inbound leads. The leads are rolled up to the sales rep level. This is especially powerful in one on one meetings with sales reps. With Sales Rep Scorecards, a sales manager and sales rep can see if inbound leads are getting enough attention.
Sales Rep Scorecards Can Help
Rekener's Sales Rep Scorecard app is the fastest and most powerful way to give your sales leaders (at all levels) the visibility they need to maximize the value of leads and improve sales performance. We crunch the data so you can focus on crushing your numbers.
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Alex is CEO and Founder of Rekener. Previously, he served as President and COO at ZeroTurnaround and as President of the Delta Division of BBN Technologies. At ZeroTurnaround, he grew high velocity inside sales by 6x in 3 years. At BBN, Alex co-founded RAMP and AVOKE, both recurring SaaS businesses based on BBN's world class speech recognition and natural language processing tech. Alex started his entrepreneurial career as founder and COO of NBX Corporation, which led the transformation of business telephone systems to Voice over IP. Alex’s companies have generated $500M in liquidity events and more than $1B in sales.
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