In 2007, James Oldroyd, MIT Professor, released a report in collaboration with InsideSales.com titled How Much Time Do You Have Before Web-Generated Leads Go Cold? Every startup founder and sales rep should read it. Despite it being almost 15 years old, it's more relevant than ever, and continues to spawn new studies with similar findings to this day. It lead to the popularity of the term 'Speed to Lead'.
It has had a major impact on our company's sales strategy, and since we provide a conversational sales platform, it has had a major impact on the product itself.
Here are the 2 major takeaways, and why you should care.
Takeaway #1. Add live chat and/or click to call to your website.
Live chat and click to call were the only lead capture methods that had a statistically significant effect on close rates. This one is probably well understood today. It's the reason that Intercom, Drift and others have been so successful. If you don't have live chat on your website, add it!
Web forms did not have a significant impact. Today, chatbots offer a slight improvement over web forms, but their biggest advantage is in branching conversations to improve qualification, and routing to live chat with a human. Leads will still go cold quickly with bots. Bots scale, humans sell.
Takeaway #2. Speed to Lead is Critical. Respond quickly or lose them forever.
Leads go cold fast! The odds of having a conversation with a lead are 100x greater when a contact attempt is within the first 5 minutes versus 30 minutes!
As well, the odds of converting the lead into a sales opportunity are more than 20x if contacted within that same 5 minutes vs 30 minutes.
This was followed up with an article in the Harvard Business Review in 2011 that found only 26% of companies respond within that 5 minute window. As well, 24% took more than 24 hours and 23% never responded at all.
This finding led to the term, 'The 5 Minute Rule' in sales, and the popularity of the term 'Speed to Lead', which is the time it takes to respond to an inbound lead.
Why Speed to Lead Is So Important
If you're a Sales Development Representative (SDR) or Business Development Representative (BDR), your success is based on your ability to get leads and prospects to have a conversation with you.
If you're a startup founder, you undoubtedly spend a lot of time and/or money on marketing (i.e. getting people to your site and generating leads). It's hard! The SaaS market is overcrowded, ads are expensive, almost everyone is doing SEO, and growth hacks seem to be harder than ever to uncover. Even if you're a product-led company, like us, speed to lead is just as critical for converting Product Qualified Leads (PQLs) and larger potential clients that will want to chat with a human before using your product or converting to paid.
So knowing how critical response time is should reframe your thinking. You should focus less on how many leads you can generate, and more on how quickly you can respond to them.
Speed to Lead Recommendations
#1. Prioritize new leads first
Unfortunately that amazing lead that your website just captured a few hours ago probably won't respond. Focus on the most recent leads, especially those that are still active on your website.
#2. Use a chatbot with proper notifications
Chatbots won't close the sale, but if you're using the right tools, you can set up notifications when leads start talking with a bot so you're ready to respond quickly when it's time to takeover the conversation. With Hootsy, you can easily add email, in-app, browser, and slack notifications at any point in a bot conversation so your team has an extra minute or two to takeover the conversation while the lead is still hot.
#3. Be more proactive
If reacting quickly to a new lead is so critical, imagine how impactful it would be to proactively reach out to one while they're active on your website. The only caveat is that you have to be careful not to scare them off by being overly aggressive in your approach. With Hootsy, we found that live video works extremely well in this case. You simply show people you're available to help with a message like 'John Doe is live now if you have any questions.' They can easily close the messenger without feeling like they have to respond. They will appreciate the level of human connection this provides; helping you build trust and increasing the chance that they'll respond later if not now.
Improving lead response times can have a dramatic impact on your ability to connect with more customers and increase sales. Responding to leads within 5 minutes and being more proactive is a great way to stand out from your competition and grow. The importance of speed to lead will only increase as time goes on. Make it a critical part of your sales strategy and reap the rewards!