APRIL 2, 2013 AA-ISP 2013 RESPONSEAUDIT EXECUTIVE …static.insidesales.com/assets/pdf/AA-ISP-2013... · Professionals (AA-ISP) promotes and advances the profession of Inside Sales

APRIL 2, 2013

AA-ISP 2013 RESPONSEAUDIT EXECUTIVE SUMMARY ILLUSORY SUPERIORITY

INSIDESALES.COM RESEARCH DIVISION PERFORMED BY KYLE DAVIS

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Copyright © InsideSales.com 2013

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No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning,

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© 2013 InsideSales.com

All rights reserved, including the right of reproduction in whole or in part or in any form.

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AA-ISP 2013 RESPONSEAUDIT EXECUTIVE SUMMARY

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RESEARCH PAPER

AA-ISP 2013 RESPONSEAUDIT

RESEARCH OVERVIEW

Attendees of the 2013 AA-ISP Leadership Conference held in Chicago were tested for how quickly and persistently they respond to Web leads. In addition to these tests, companies were sent a survey asking them how well they believed their sales teams responded to leads. The results suggest not only that companies need to respond more quickly to Web leads, be more persistent in contacting leads, and call each lead more frequently, but also that companies’ perceptions as to how well they do are out of line with reality.

THE AA-ISP

As its name suggests, the American Association of Inside Sales Professionals (AA-ISP) promotes and advances the profession of Inside Sales. Its self-proclaimed mission is to serve “as an authoritative resource to leaders and individual sales representatives who want to take their organization and careers to the next level of professionalism and performance” (AA-ISP, 2011). Members come from a variety of industries—from hospitality to software—all striving to maximize the performance of their sales teams.

OPTIMAL LEAD RESPONSE MANAGEMENT

The following report focuses on two areas that affect a lead’s progression into the sales pipeline: response time and persistency. There are two types of contact methods this study tracks: email responses and call attempts made by a member of the sales team. Lead response time refers to the period between when an electronic lead is submitted and when first contact is attempted by a sales rep. Persistency refers to how many times a company attempts to contact a new lead before giving up.

The Lead Response Management Study by Dr. James Oldroyd shows that sales agents do not have much time to respond before their leads become unresponsive or “cold.” In fact, the odds of contacting a lead are 100 times greater when contacted within 5 minutes after the lead was

http://www.insidesales.com/research

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submitted than if contacted 30 minutes after submission. Similarly, the odds of the lead entering the sales process, or becoming qualified, are 21 times greater when contacted within 5 minutes versus 30 minutes after the lead was submitted (Oldroyd, 2007).

In the March 2011 issue of the Harvard Business Review (HBR), an article entitled “The Short Life of Online Sales Leads” states that companies are spending more money on Internet leads, but their systems and processes are not keeping up. The amount companies spent on Internet-generated leads increased 82% between 2005 and 2009; however, of companies audited in the study referenced in HBR, only 37% responded within an hour, and almost a quarter—24%—took over 24 hours to respond. The average first response time of companies that responded within a month was 42 hours (McElheran, 2011).

Lead response time was also the subject of a May 2012 Forbes.com article, “When it Comes to Inbound Marketing Time is Definitely of the Essence,” which discusses how companies are essentially wasting money on poor lead management. B2C companies spend an estimated $2 to $25 per generated lead while B2B companies spend an estimated $30 to $200 on each marketing lead generated. Company executives likely do not realize the money they are losing by allowing their leads to get “cold” (Olenski, 2012).

Not only does quickly responding to a lead matter, but the day and time of response also have an effect on the odds of contacting a lead. An article in Inc magazine, published in July 2011 and entitled “How to Best Harness Inbound Marketing Leads,” mentions that for a group of 42 companies, Wednesdays and Thursdays between the hours of 4 pm and 6 pm are the best times to contact a lead (Markowitz, 2011).

Persistency is also important in successfully responding to leads. Based on ResponseAudit research across 7,960 companies between the years 2008 and 2012, sales reps on average make only 1.3 call attempts to a new lead before giving up. Ken Krogue, president and co-founder of InsideSales.com, has blogged and spoken on this topic and on how to improve this metric at a number of events such as the Sales 2.0 and AA-ISP conventions (Krogue, 2012). He advocates making 8-12 calls in order to dramatically improve contact rates. Companies will likely increase the number of leads moving down their sales pipeline by being more persistent in contacting them.

http://hbr.org/2011/03/the-short-life-of-online-sales-leads/ar/1

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

http://www.inc.com/guides/201107/how-to-best-harness-inbound-marketing-leads.html

http://www.inc.com/guides/201107/how-to-best-harness-inbound-marketing-leads.html

http://www.kenkrogue.com/best-practices/inside-sales-best-practices-7-ways-in-increase-contact-ratios/

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ILLUSORY SUPERIORITY

Illusory superiority is the tendency to see ones’ self as more skilled than what is in fact the case. This section explains this pyschological principle and shows how it applies to business, but more particularly, lead response.

Justin Kruger and David Dunning published a study about being unskilled and unaware of it. In this study, Kruger and Dunning claim that the more unskilled someone is at a task, the more they overestimate their abilities. Volunteer undergraduate students from Cornell University were asked to rate their abilities in three areas: logical reasoning, ability to recognize humor, and English grammar.

The results were the same for each study. Those in the bottom quartile grossly overrated their abilities. It seemed that these people knew they were not superior, but did not realize the extent of their incompetence--they consistently rated their abilities as average (50th percentile), rather than below average. Interestingly, the study showed that as performance improved, the gap between overestimation and reality lessened and reversed to the point that those who really were superior underestimated their abilities. In all studies, those that scored in the third quartile consistently perceived their ability very close to their actual performance (Kruger & Dunning, 2009).

In a similar study done at Stanford University, researchers explored the tendency of most people to think they are above average. In one study, 87% of Stanford MBA students rated their academic performance as above the median. Similarly, 90% of students said that they believed they were either average or above average in quantitative ability. The great majority of people think they are better drivers than average, that they are better-looking than average, and that they have better health prospects. These estimations obviously cannot all be true (Zuckerman & Jost, 2001).

There are obvious applications to business. Companies may overrate their ability to sell, the attractiveness of their product, their customer service, or even their ability to contact leads. This study tested just that: how companies perceive they contact leads and how they actually do.

WHY THIS MATTERS

One of the first steps to growth is identifying how and where to grow. By realizing some processes may not be as strong as originally thought, a company can make efforts to seek out these weaknesses and improve.

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METHODOLOGY

RESPONSEAUDIT TECHNOLOGY

The ResponseAudit system is a patent-pending technology used to conduct research. Its purpose is to test how quickly and persistently companies are contacting Web leads. The process begins with a “secret shopper” who creates an alias name, email, phone number, and company website. Next, this “shopper” visits a website, locates a Web form, fills it out using the alias information, and submits it. As the company responds to the lead, the ResponseAudit system records all call attempts, email messages, and timestamps for each response received during the following two-week period.

THE RESPONSEAUDIT PROCESS

The ResponseAudit system is standardized and automated. Audits are only performed during the standard business hours of 8:00 am to 5:00 pm (accounting for time zone differences), allowing companies to have the best chance at responding quickly. At the end of the process, a report is compiled for each company, complete with a list of response types (call or email), number of attempts, response times, and summary statistics.

PERCEPTION VS REALITY SURVEY

A survey was sent out to all AA-ISP members asking basic questions about how they responded to leads. The questions focused on lead response time, persistency, ratio between phone calls and emails, and what method companies use to make their first response.

AA-ISP 2013 RESPONSEAUDIT

AA-ISP members were tested for how quickly they respond to their Web leads. Of the members, 760 had Web forms where ResponseAudit research could be performed.

RESULTS

RESPONSE RATE

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The response rate shows how many companies even attempted to contact the lead either through phone or email. This metric is calculated as the number of companies that responded either by phone or email divided by the total number of companies with leads submitted. Figure 1 shows that of the companies that had Web forms, 58.6% responded to the lead. This is on par with most groups studied; typically the response rate is below 70%. This rate needs to be dramatically improved; currently, most companies are throwing away Web leads

PERCEPTION VS REALITY: IMMEDIACY

As mentioned above, immediacy refers to the amount of time it takes for the sales reps to attempt their first phone call. Companies have very optimistic views as to how fast they respond to Web leads.

As Figure 2 shows, nearly 25% think that they respond to leads within 5 minutes. However, only 5% actually do. Also, about 20% think that their company takes over a day to first respond by phone, but in actuality, 30.6% do.

Response Rate

© InsideSales.com 2012

Figure 1 Response Rate

41.4%

58.6%

No Response

Responded at Least Once

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PERCEPTION VS REALITY: PERSISTENCY

Obviously, persistency affects whether a lead ever gets contacted and ultimately buys. Since most people are likely not contacted on the first attempt (in fact, probably under half), statistically, companies need to make between four and eleven attempts to contact over 90% of leads.

Companies also have very false ideas as to how many times they contact leads. The most common response was that they attempt five or more times. Figure 3 shows the data.

Perception vs Reality: Immediacy


Figure 2 First Call Response Times

Perception vs Reality: Persistency


Figure 3

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The results show the opposite of what people think; in reality, companies are not persistent in contacting leads. As mentioned, the most common response for the survey was five or more attempts, but in reality, the most common number of attempts was zero. PERCEPTION VS REALITY: FIRST RESPONSE TYPES

Responding first by phone is the most effective way to first contact a lead. Sending an email at the same time as the call can also work, but it is essential that the phone call happens. This is because phone calls are fast—questions can be answered, next steps can be discussed, and the sale can move forward without the back-and-forth delays of email.

Companies seem to understand this. According to the survey, 90.6% believed that their first response came through a phone call. However, this perception differs from reality, as shown in Figure 4.

Companies are not even close with their perceptions. About 66.6% actually make their first contact attempt through email, versus the 9.3% that believed they first attempted through email. This is the biggest misperception seen so far.

PERCEPTION VS REALITY: RESPONSE TYPES

It is important that companies find a good balance between phone and email. Both can serve important purposes—perhaps someone is unable to answer the phone at any given moment, but they have access to email, and vice versa.

Perception vs Reality: First Response


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The most common ratio of emails to calls that survey respondents put was about three calls to one email. According to the data, these estimates are far from what is really going on. The reality is that about half of companies only use email and do not call at all. Figure 5 shows the results.

Companies could benefit from the more equal split between phone and email response that they think they have already achieved. The most disconcerting aspect is that half of companies are only responding through email. This is a cheap use of a sales team, with live reps being wasted for the sales skills they could use over the phone.

CONCLUSION

Companies have shown that they have lofty perceptions of how they respond to leads. However, performances do not meet their expectations. Companies should take a hard, honest look at how their company is really performing, not just in responding to leads, but in all areas. A limitation to this study includes the population—only AA-ISP members were surveyed. Further areas of study include how companies think they perform and how they actually do in other areas, such as contact rates, close ratios, etc.

Perception vs Reality: First Response


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ABOUT INSIDESALES.COM

The InsideSales.com platform accelerates efficient lead response management and qualification. Key features include: PowerDialer, integrated with the InsideSales.com Lead Response Platform or the Salesforce® CRM; ResponsePop, the ability to respond to web leads in under 10 seconds; automation of standard sales functions, such as the ability to leave a voice message or email with the click of a mouse or through one or more pre-defined trigger events, otherwise known as sales workflow automation; extensive sales analytics that enable visibility down to the sales rep level. ResponseAudit is a unique service offered by InsideSales.com for analyzing a sales team’s response time and persistence to an Internet-generated lead (request a free ResponseAudit at www.responseaudit.com). A brief list of our enterprise clients includes: Dell, NEC, REMAX Cornerstone, and Marketo. To learn more, visit www.InsideSales.com.

http://www.responseaudit.com/

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WORKS CITED

AA-ISP. (2011). The Association and Our Mission. Retrieved from The American

Association of Inside Sales Professionals: http://www.aa-isp.org

Krisitna McElheran, J. O. (2011, March). The Short Life of Online Sales Leads.

Harvard Business Review, p. 28.

Krogue, K. (2012, February 23). Inside Sales Best Practices: 7 Ways to Increase

Contact Ratios. Retrieved from www.kenkrogue.com:

http://www.kenkrogue.com/best-practices/inside-sales-best-practices-

7-ways-in-increase-contact-ratios/

Kruger, J., & Dunning, D. (2009, December). Social Science and Humanities:

Scientific Research. Retrieved from Scientific Research:

http://xa.yimg.com/kq/groups/21587583/1002473080/name/Dunning.

pdf

Markowitz, E. (2011, July 6). How to Best Harness Inbound Marketing Leads.

Retrieved from www.inc.com:

http://www.inc.com/guides/201107/how-to-best-harness-inbound-

marketing-leads.html

Oldroyd, J. (2007, October). Lead Response Management Study - Oct. 2007.

Retrieved from Inside Sales Best Practices:

http://www.insidesales.com/images/LRM_07.pdf

Olenski, S. (2012, May 5). When It Comes To Inbound Marketing Time is

Definitely Of The Essence. Retrieved from www.forbes.com:

http://www.forbes.com/sites/marketshare/2012/05/22/when-it-

comes-to-inbound-marketing-time-is-definitely-of-the-essence/2/

Zuckerman, E. W., & Jost, J. T. (2001). Retrieved from NYU Department of

Psychology:

http://www.psych.nyu.edu/jost/Zuckerman%20&%20Jost%20(2001)%2

0What%20Makes%20You%20Think%20You're%20So%20Popular1.pdf

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