LEAD RESPONSE MANAGEMENT SURVEY

Lead Response Management Survey Overview

Companies are spending a significant amount of their marketing budgets on tools designed to increase their ability to generate leads over the web and optimize their sales representative’s ability to close those opportunities.

However, companies often use intuition to generate, capture, route, manage and respond to the leads that marketing organizations generate through the web. Intuition is often incorrect. As such, there is an opportunity to help bring science to the field of lead response management.

To understand what is currently happening in companies today in this new area, Dr. Oldroyd performed a survey of marketers and sales manager to identify which organizations are having success and how they are achieving it.

Over the course of four months (June to September 2007), Dr. Oldroyd received 495 responses from companies that drive web leads to their web sites. The surveyed group represents over 40 industries. The survey was primarily responded to by sales or marketing managers/executives and represents a broad distribution of every company size (ranging from “under $10 million in annual revenue” to over “$1 billion in annual revenue.”) The survey audience consisted primarily of companies that are headquartered in North America (USA, Canada, Mexico).

22 survey questions focused on the following issues:

What are the antecedents that drive the highest qualification and close rates?
- Which marketing methods are most effective in driving visitors to company’s websites?
- Which website offers compel visitors to enter their information into a web form?
- What methods used to assign and distribute web leads to sales and lead qualification representatives are most effective in driving qualification rates?
- How do the tools used to capture and deliver leads to sales and lead qualification representatives impact qualification rates?
How frequently should a sales or lead qualification representative call a web lead to drive the highest qualification and close rates?
- How the number of attempts until a web lead is contacted impacts the firm’s qualification and close rate.
- At what point should the firm abandon contact attempts?
How do industries differ regarding the response times to web leads to drive highest qualification and close rates?
What time frame is best to call web leads to drive the highest qualification and close rates?
- What time of the day is best to call a web lead?
- Which day of week is the best day to call a web lead?
- What length of time should the firm wait before calling a web lead (time from the time a lead was created)?

Generally speaking, the study was focused on identifying WHEN the best time was to efficiently contact web-generated leads, and HOW to generate, contact, and handle web leads for optimal success.

Several interesting patterns emerged from an analysis of the data that offer clues on how best to generate, capture, route, manage and respond to web-generated leads in order to optimize lead qualification rates and sales close rates.

HOW do you generate web leads to qualify and close at optimal rates?

To answer this question, Dr. Oldroyd conducted an analysis of which antecedents to generating leads drive the highest qualification and close rates and which processes are most effective in distributing the leads to sales and lead generation representatives.

The study design allowed a focus on both positive and negative relationships between the antecedents and processes, and their correlation on qualification and close rates of the companies in the survey. The table below summarizes some of the key findings and their correlation with qualification and close rates:

In the table below, a ‘+’ sign indicates this method increased qualification and close rates, a ‘-‘ sign indicates a negative effect on qualification and close rates, a ‘~’ sign indicates this data bordered on just barely being statistically significant. If nothing is indicated there were no statistically significant relationships in that data. (The appendix has the list of methods we surveyed.)

Antecedents to generating leads:

Processes to distribute leads to sales and lead generation representatives:

WHEN does a lead go cold? How does efficiency in contacting impact qualify and close rates?

Companies intuitively understand that speed is likely to improve qualification and close rates. Moreover, they understand that greater efficiency in responding to web-generated leads allows them to contact more leads with less effort. A portion of the study sought to find evidence for these effects.

The effect of time and efficiency on both qualification and response rates was striking.

The speed of first attempt (time to first dial) to a newly generated web lead correlated with a significant increase in the number of qualified leads. For each tier of delayed response in the survey question (for instance, responding in 30 minutes rather than 10 minutes) the percent of leads qualified dropped 4.3% and close rates fell nearly 2%. (See the different tiers in the survey question in ‘the TIME it takes to make first contact’ question in the Appendix.)
Similarly, an increase in the number of unproductive call attempts (4 attempts rather than 3 attempts) correlated with a decreased lead qualification rate and close rate. For every additional call attempt that did not lead to a contact, the lead qualification rate dropped 5% and the close rate dropped nearly 1.5%. (See ‘# of attempts to CONTACT’ question in the Appendix.)
In addition, there is a multiplicative negative effect when combining slow speed and unproductive call attempts. Companies with poor performance on both dimensions experience accelerated negative performance at a rate of an additional 1% point decrease for each level. An improvement of just one level on each dimension would increase qualification rates by about 11% and close rates by about 5%.
Delay and inefficiency in contact time (as opposed to time to first attempt) had an even more pronounced effect. A delay in contact time reduced the qualification rate by 4.7% and inefficiency in dials (dials to contact) reduced the lead qualification rate by 4.41% but companies that do both badly experienced an additional 4.35% penalty. All together this is about a 13% lower qualification rate for each category of movement. If a company is able to cut the number of attempts to contact from 3 to 1 and the time from 30 minutes to 10 minutes they would realize a dramatic 26% improvement in lead qualification.
Finally, a similar analysis for close rates demonstrated a 3.5% decrease per level for each time delay and a 2.3% decrease per level for each additional attempted contact to qualify a lead. In this case, the data also revealed a compound negative effect of 3.3% for those who do both poorly. A company that can decrease the amount of time and the number of attempts one level will experience a 9.09% increase in close rates. Firms that move two categories get an 18% increase.

I. Process Antecedents

In addition to the when question addressed above, The Lead Response Management survey also sought to answer how companies generate, respond and route leads. In doing so, the study identifies which methods of demand generation marketing are more effective and which are less effective in both qualifying and closing leads. In particular, the survey linked each process ( 1) demand generation, 2) offer type, 3) techniques to capture the lead and 4) lead distribution strategies) to the qualification rates and close rates from the same respondent.

Demand Generation

The first area of analysis is that of demand generation. This section examined the stages involved in generating a web based lead, and what techniques correlate with an increase or decrease in lead qualification and close rates.

The following table represents the Lead Response Management Survey questions related to generating demand and processing leads. Respondents described how often they used the methods or criteria described in the specific questions by using the seven Response Tiers in the right box.

On a technical note, Dr. Oldroyd regressed each demand generation process on the company�s qualification rates and close rates using OLS regression with robust standard errors. A cut off of 95% confidence was used for most analysis; however, some relationships with a lesser confidence interval are also reported (and noted with an � *�.) A listing of all potential responses is indicated in the order in which they appear in this paper in the Appendix for context.

NOTE: Each question will be represented by the letter bolded throughout this summary.

Demand Generation: What methods do companies use to drive visitors to their web site, and the effects on their lead qualification and close rates?
Web Site Offers: What methods do companies use to incentivise visitors on their web site to fill out a web form, and what are the effects of those offers on their lead qualification and close rates.
Capturing Leads from Web Forms: What methods do companies use to capture leads after they have filled out a web form, and what are the effects of the different capture methods on lead qualification and close rates.
Distributing Leads: What methods do companies use to assign the correct leads to the correct sales and lead qualification representative, and what are the effects of the different distribution methods on lead qualification and close rates.
Routing Leads: What physical methods do companies use to deliver leads to sales and lead qualification representative, and what are the effects of the different deliver methods on lead qualification and close rates.

Contacting Leads: What methods do companies use to contact web leads after they are delivered, and what are the effects of those contact methods on lead qualification and close rates?

Question asked to respondents: “To what extent does your company use the following methods to CONTACT leads received from its website?”

Effects on lead qualification rates: Several methods used to contact leads like fax, chat, and email all increased qualification rates. Contact by phone and direct mail had no correlation.

Effects on close rates: Fax and chat increase close rates. Phone and direct mail had no meaningful relationship to close rates.

II. Lead Response Timing and Efficiency

The next area of analysis is that of lead response timing and efficiency. Once again, Dr. Oldroyd regressed responses from these questions on the qualification rates and close rates. This is the examination of when and how frequently a sales or lead qualification representataive should attempt to call a lead they gave their information in a web form.

One area that is different and interesting here is Dr. Oldroyd also compares those that responded to those that did not respond to the questions in this section. He calls those that did not respond the ‘Don’t Knows’, and he uncovers some additional relationships that are statistically significant in their correlation to qualification and /or close rates.

The following table represents the Lead Response Management Survey questions related to lead response timing and efficiency. Respondents ranked how often they used the methods or criteria in answering the specific questions by the response tiers in the right box.

Time of Day to Contact Leads: This question examines what times of the day companies call their web leads, and what the effects of calling at different times of the day has on lead qualification and close rates.

Question asked to respondents: “To what extent are the following time blocks effective for contacting leads (i.e. speaking on the phone with the correct person)?”

This analysis looks at the answers of all respondents to understand when they think different the time blocks of the day are best for contacting leads. It then regressed these responses on qualification rates and close rates as reported by the same respondents.

Effects on lead qualification rates: The following correlations were found for the time blocks listed below:
� 9:00am�10:00am	Calling at this time block correlated to a 5.56% increase in qualification rates over other times.
� 10:00am�11:00am	Calling at this time block correlated to a 5.43% increase in qualification rates over other times.
� 11:00am�12:00pm	Calling at this time block correlated to a 4.16% increase in qualification rates over other times.
� 2:00pm�3:00pm	Calling at this time block correlated to a 3.99% increase in qualification rates over other times.
� 3:00pm�4:00pm	Calling at this time block correlated to a 3.24% increase in qualification rates over other times.
� 4:00pm�5:00pm	Calling at this time block correlated to a 4.34% increase in qualification rates over other times.

As demonstrated in the chart, there are two time periods that marketers and sales people feel is more effective to call in order to improve qualification rates. They are mid to late morning and the afternoon.

NOTE: Compare the survey data to the more significant LRM study on the same topic.

Day of Week to Contact Leads: This question examines what days of the week companies call their web leads, and what the effect of calling on different days of the week has on lead qualification and close rates.
Speed to First Call Attempt: This question examines when sales and lead qualification representatives first attempt to call a web lead after it has been created, and what the effect the timing of the first call attempt has on lead qualification and close rates.
Speed to First Contact: This question examines when sales and lead qualification representatives first contact a web lead after it has been created, and what the effect the timing of the contact has on lead qualification and close rates.
Call Attempts to First Contact: This question examines how many call attempts companies make in order to contact their web leads, and what the effect of each of these call attempts has on lead qualification and close rates.
Contacts to Qualification: This question examines how many contacts companies make in order to qualify their web leads, and what the effect of each of these contacts has on lead qualification and close rates.
Call Attempts before Abandon: This question examines how many call attempts companies make before they give up attempting to call on their web leads, and what the effect of this point of abandonment has on lead qualification and close rates.

III. Company Size, Structure and Other General Results

The next area of analysis is observing trends related to company’s revenue, employee count and other general results. Once again, Dr. Oldroyd regressed these responses on the qualification rates and close rates.

Employee Headcount: This question examines the effect that the employee headcount has on lead qualification and close rates.

The approximate headcount of employees in your company was correlated against qualification rates and close rates. The response tiers were:

Effects on lead qualification rates: Analysis shows ‘Employee Size’ with the reported effect on qualification rates and close rates. The relationship between employee size and qualification rates was just outside of the criteria for validity, but it was close enough that we have mentioned it.

It says that for every tier of increased employee size, there is a loose relationship between lower qualification rates that decreases at a rate of -1.22%.

Effects on close rates: The correlation between Employee Size and close rates is statistically significant and decreases at a rate of -1.44% for each tier of larger Employee Size. Or in other words, this suggests close rates go down in larger companies.
Sales or Lead Rep Headcount: This question examines the effect that the number of sales and lead generation representatives has on lead qualification and close rates. The table to the right includes the Response Tiers.

The approximate number of lead generation or sales reps in companies was correlated against qualification rates and close rates. The response tiers were:

Effects on lead qualification rates: Analysis shows that there was a significant relationship on qualification rates of -2.45% as higher tiered numbers of Lead Reps or Sales Reps were reported.

Effects on close rates: There was no observed effect on increasing # of Reps and close rates.
Bottlenecks in the Lead Generation Process: This question examines where companies have bottlenecks in their lead generation process, and what the effect of these bottlenecks has on lead qualification and close rates.
Effects on lead qualification and close rates: Dr. Oldroyd regressed responses on all three of these questions to qualification rates and close rates and only found statistically significant relationship, that was question #3.

There was a negative effect of -2.68% for each tier from ‘Never’ to ‘Always’ on close rates when a company says they lose customers because they are not able to CONTACT THE QUICKLY ENOUGH.

There was no relationship in either direction when respondents said they didn’t have enough time or enough leads.
Generalist vs. Specialists: This question examines if companies use a specialists or generalist approach in following up on web-generated leads, and what the effect of these two different methods have on lead qualification and close rates.

Question asked to respondents: �On average, is your company�s sales process a generalist process (i.e. one rep handles the entire sales process), or a specialist process (i.e. one rep hands off to another rep for different aspects of the process)?�

There were 67.4% of the respondents that reported their sales reps are generalists, while 32.6% are specialists. Specialists work in an environment where there is at least one hand-off in the sales process. An example would be a company where a lead is qualified by a representative that qualifies and sets an appointment on behalf of a rep who closes the sale.

Dr. Oldroyd uncovered a 7.9% higher reported close rate of Specialists over Generalists. Companies that focus the inside sales process have better outcomes then firms that take a generalist approach.

5. Company Revenue: This question examines the relationship between annual revenue on lead qualification and close rates.

Question asked to respondents: “What was your company's annual revenue for 2006?”

Effects on lead qualification and close rates When examining how qualification rates and closes rates are effected by revenue, there was no relationship with qualification rates, but close rates decreased at a rate of -1.55% with each increasing tier.

This finding seems to be similar to Employee Sizes and # of Reps. Close rates seem to decrease as size increased.

Lead Response Management Survey Conclusion

The Lead Response Management Survey introduces many new answers to the field of lead response management.

However, in studying the responses, we couldn’t find ANY statistically significant answers to our question of WHEN (besides generally faster and more efficiently) we should respond to web leads by asking the marketing departments of companies.

Here are a few additional questions we asked that further exemplifies this point:

When asked “How much time does it take to make a first call attempt” we had the following responses:
1. Less than one hour	20%
2. 1 hour to 8 hours	16%
3. After 8 hours (next business day or beyond)	26%
4. Don't Know, Don't Measure or Didn't Respond	38%
When asked “How many attempts does it take before a rep makes first contact” we had the following:
1. One	4%
2. Two	22%
3. Three	21%
4. Four or more	12%
5. Don't Know, Don't Measure, or Didn't Respond	40%
We asked “how many call attempts do you suggest sales reps make before they abandon a lead?”
1. One to Three	14%
2. Four to Five	21%
3. Five to Seven	12%
4. More than Seven	11%
5. Don't Know, Don't Measure, or Didn't Respond	11%

Please note that 107 companies chose not to respond at all to these three questions.

The survey clearly reveals that marketers and sales representatives DO NOT KNOW when and how efficiently to follow up on web-generated leads. Since this was the reason for the survey, Professor Oldroyd recommended a more detailed behavioural analysis on actual call data. To perform this kind of study, we needed data that would allow us to analyze the effects on contact and qualification ratios based on the time from when leads are created, to attempted, to contacted, to qualified.

Believing that companies don’t know, we acted on his recommendation to answer the original question:

“How Much Time Do You Have Before Web-Generated Leads Go Cold?”

LEAD RESPONSE MANAGEMENT SURVEY

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