Lead Response Management Study – Phonexa Canada

Phonexa

18 minute read

As a company operating in the lead management market, Phonexa highly values data that brings to light the dynamics of lead responses. In this lead response management study, we will present extensive statistics on lead management, discuss the response and lead management infographics, and conduct a thorough analysis.

Our focus extends to illustrating the impact of delays on lead conversion, examining patterns across days of the week and times of the day, exploring the frequency of contact attempts, and investigating whether the same representatives handle the entire process or different ones manage various stages. Through these comprehensive studies, we aim to provide valuable insights for relevant businesses, enabling them to enhance their lead management strategies.

The Lead Response Time Analysis

The Lead Response Management study conducted in 2009 brought to attention the significance of timely answering to web-generated leads. The data was collected from companies based on how they responded to over 15,000 leads over three years. Thus, the importance of this data lies in the actual, real-world lead response statistics rather than the best practices or customer expectations.

The hourly examination of lead responses reveals that the chances of successfully contacting and qualifying leads decrease dramatically with every hour of delay. The success rate is the most striking when comparing the lead responses during the first and the second hours after acquiring the lead.

The data suggests that the reps have almost 11 times more chances to engage in successful contact with a lead during the first hour than during the second one. The success rate continues to drop and is 2,3% during the third hour and less than 1% after that. Overall, the odds of contacting a lead during the first hour compared to the following nine hours is eight to one.

Examining hourly data about qualifying leads showcases similar patterns with the most striking difference between success probability during the first and the second hour. Here, the chance to qualify leads is 16% during the second hour and 6% during the third hour.

While the tendency of dropping the success rate dramatically with every hour is obvious in both turning leads contact and qualifying, the curve is noticeably less steep with the second data. Let’s keep this difference in mind for the later analysis.

It is reasonable to suggest that the probability of converting a lead into contacted or qualified doesn’t change only at the turn of 59th and 60th minutes but continues from zero point onwards.

Splitting the data into 5-minute tiers reveals the same type of graph, where the drop in each tier is steeper closer to the start time. There is almost a 5 times better chance of making contact with a lead during the initial five minutes than during the 5-10 minute period, while if comparing the 0-5 period to 30-35 minutes, the difference becomes approximately 75 times.

When comparing the same periods from qualifying leads data, the study shows a 4-fold decrease after the initial five minutes and a 25-fold decrease when comparing the first tier to a 30-35-minute one.

Again, contact and qualify data show similar hyperbola graphs, with the latter being less steep.

At this stage, we can hypothesize that while lead response times are crucial for qualifying the leads, their impact is smaller than in the case of contacting the leads. We will see similar patterns later when we study data about the impact of the days of the week and the time of the day on the lead conversion.

Real-World Lead Response Time Statistics

Armed with this data, one might think that most businesses put their efforts into getting hold of their leads as soon as they acquire them. However, the data suggests the opposite.

The Harvard Business Review research conducted shortly after the previous lead response management study showed that the average lead response time to web-generated leads for companies that responded within 30 days was 42 hours, while 2,241 audited companies 512 never responded.

Knowing that the odds of successfully contacting leads are more than 10-fold higher during the first hour of leads’ acquisition, it’s unexpected to learn that about 65% of companies failed to do this.

Forbes researched phone leads in 2012 and had almost the same results: on average, it took 47 hours for companies to respond to a lead.

The results demonstrating that most businesses don’t find it critical to stick to an hour rule when contacting their leads were replicated repeatedly. The 2017 study showed that only 7% of companies respond within 5 minutes to phone leads, while 55% call after five days or never call.

Imagine receiving the first call from a company rep within one hour after you submitted their form and a call from their competitors in five days. What would your impressions be?

Another research targeting 114 companies showed that less than 1% of companies responded to leads within a five-minute frame while every fifth company ignored them.

Customer Expectations Data

The data we have looked at so far provides a realistic view of lead response time: how quickly companies react to acquired leads and whether the timing impacts lead contacts and, subsequently, conversions. Now it’s time to look at another part of the process – the customers, whether they are private individuals or acting on behalf of their employers.

Learning about customer expectations for a lead response time is crucial for offering products or services at the right time. With the competition in online marketing and the positive user experience being a groundbreaking factor for choosing a vendor, these expectations are quite demanding.

A study conducted in 2020 says that nearly a third of customers expect businesses to answer emails in one hour or less. However, we were not able to find any data suggesting that there is a demand to respond to leads within 5 minutes after they show interest in a company. On the contrary, the same study suggests that the percentage of customers who expect to be contacted by email in under 15 minutes is shrinking.

The user behavior can be characterized by topics related to lead response time. For example, most users who were subjects of a 2017 study by American Express were willing to wait on the phone for five minutes or longer, while another study conducted two years later showed that 66% of respondents would not wait on the phone for over two minutes.

Businesses should also consider paying attention to customers’ reviews on social media. Similar to the lead response, a quick reaction here is much appreciated. 53% of customers expect businesses to respond to negative reviews within a week, while one-third of them expect this time to be shorter than three days.

Now, when the user experience has become a pivotal factor for choosing a seller or a partner company, user expectations for businesses’ quick responses, including responding to leads, are not surprising. A comparison of customer expectations to the lead response time statistics provides valuable information and raises further questions.

Comparing Lead Response Time to User Expectations

Overall, we see that the buyers’ (or leads’) understanding of the acceptable time is not that much shorter than what average companies offer. At least, we found the one-hour response time statistics to be true. This can be explained by the fact that user expectations are not shaped only by their ideas about the best possible scenarios but rather are based on real-world experiences and previous interactions with similar businesses.

Prospects analyze businesses that offer a better user experience through timely lead responses and align that knowledge with their current needs, forming lead response time expectations. For companies falling short of these expectations, it is better to revise their policies on lead response time if they want to compete for conversions.

However, comparing user expectations to successful leads data that we shared at the beginning of this study yields more interesting conclusions.

If you recall, the companies’ representatives had 11 times better chances to contact leads during the first hour of their acquisition than during the second, or 8 times better than during the 2-10 hours. Yet, during that first profitable hour, three out of four successful contacts were clustered within the first five minutes.

So, if only one of three average users finds an hour-response time critical for engaging with the business, why do more than 90 percent of successful contacts occur during the first hour and not, let’s say, 30 percent? To answer that, we must acknowledge that other factors contribute to the successful lead contact rate.

First Response Impact on Lead Conversion

Continuing our exploration, the compelling relationship between swift engagement and customer conversion deepens. Delving into B2B dynamics, over a third of companies assert a preference for vendors that contact them first. This essence amplifies in the B2C landscape, where customers, devoid of professional business reps’ qualities, lean heavily on psychological factors.

Consider a scenario: two equally enticing offers. Opting for the first offer not only secures immediate commitment but signals a commitment to user satisfaction. In contrast, delayed acceptance diminishes the impact of subsequent offers. With its promptness, the first contact signifies effort and dedication, foreshadowing an enhanced user experience.

As we decipher the nuanced interplay of time and conversion, it becomes evident that both B2B and B2C customers lean decisively towards businesses that take the initiative, affirming that the first impression is indeed a lasting one. In such a case, even if your business manages to address leads within the expected lead response time, it can still be outrun by a competitor that responds first.

Analyzing Data on Lead Connection Attempts

The next data set helps further understand the importance of lead response time.

More than one attempt is often needed for businesses to contact leads through phone calls or emails. The goal is to increase the chances of making a successful connection, qualifying a lead, or converting a lead into a customer.

While more attempts provide more opportunities to connect with a lead, each consecutive attempt is less likely to reach a goal, as revealed by the Kellogg Lead Response Management Survey. Surveying 495 companies across various industries headquartered in North America, the lead response management study examines how many call attempts companies make to contact their web leads and the effect of each of these call attempts on lead qualification and close rates.

Each additional call attempt decreased the chances of qualifying leads (engaging them in the buying process) by 5.05% and made the close (converting) odds less likely by 2%.

After successfully initiating contact with a lead, each additional attempt slightly diminishes the chances of qualifying the leads, decreasing 3.72% and lowering the close rates by 1.46%. Many surveyed companies revealed that their sales reps typically make 4-5 attempts before deciding to abandon the leads.

Several surveys were conducted to gauge the average number of attempts companies make to contact leads. The reported figures vary, ranging from 1.3 attempts in 2012 to an average of 6-10 attempts for the inbound leads industry.

Businesses realize that cutting short the number of attempts often eliminates the possibility of a positive lead outcome. Perhaps they calculate the probability of the successful conversion and move on to focus on other leads rather than chase that probability with the lead that already showed several failed attempts.

Impact of Lead Connection Attempts on Lead Response Success

Unfortunately, we haven’t found recent lead response management studies on the impact of the number of attempts on successful lead conversion, like the one we cited earlier. Based on the data we have (a 5.05% chance decrease to secure leads with every additional failed attempt), even after 10 failed attempts, there is still almost a 50% chance of conversion. However, this data has to be coupled with the lead response time stats: by the time sales reps proceed to the tenth attempt, the lead may already be cold, and further activity with this lead would be a waste.

Your sales reps need to recognize the negative impact that additional contact attempts can have on the outcome of their efforts. When company representatives fill out and submit your form, they expect to be contacted promptly. Their minds are focused on your business; they’ve reviewed the information and are ready to hear from you. Catching them during this stage provides the best chance to connect with the person responsible for dealing with your company’s sales matters. This minimizes the likelihood of failed or additional attempts, thereby increasing your chances for lead connection, qualification, or closure.

The combined impact of the number of attempts and the timing of the first contact shapes the lead response time success graph, with the percentage of successful lead connections disproportionately higher at the start than in each subsequent tier.

Timing & Lead Response Success Rate

Another variable that may impact lead response success and is related to speed is timing. The previously mentioned Kellogg Lead Response Survey provides data on what day of the week and what time of the day is best to call a lead. Specifically, this data demonstrates the dependency of timing on initial calls to make a contact, initial calls to qualify a lead, and calls to a previously contacted lead to make it qualified.

Wednesday and Thursday are the best days to make an initial call and make contact with a lead. Thursday provides a 49.7% better chance to connect with the right person than Tuesday, the least favorable day.

Similarly, Wednesday and Thursday are optimal for initial calls to qualify leads. However, the difference between the best and the worst days in the week is less prominent – 24.9%.

Thursday is also the best day to call the lead who was already contacted and qualify it. Here, the difference between all days is the least noticeable, with Friday being 19.1% less favorable than Thursday.

The most striking statistics come from observing daily initial call-to-contact rates: people are not willing to engage with new contacts at the beginning of a week. Such results may be due to two reasons: sales reps don’t initiate actions prompting companies to acquire new leads (such as completing online forms) or simply refuse to engage in conversations when receiving the call.

However, once again, the data on qualifying leads is less susceptible to time variables than just making a successful contact. That means when seeing an opportunity to establish connections with your company on favorable terms, customers enter the sales process with less dependency on the day of the week.

The hourly data here includes the non-standard seven-to-eight AM and PM work hours.

The call-to-contact data shows that 10 AM to 3 PM is the least favorable time for calling a lead. From 4 to 6 PM yields the best results, with the best-to-worst hours difference being 114%.

The call-to-qualify data reveals two prominent day periods: early morning and after lunch. However, this time the morning period also covers the non-standard 7 AM, and it seems that the sales reps are still busy after 7 PM. The difference between the top 8 AM and 1 PM is a striking 164%.

The data for calls to qualify contacted leads shows similar patterns as the previous one, with the difference between the best time to call leads and the worst hours being smaller: 109%. Interestingly, the late hours, including non-standard 7 to 8 PM, show average lead response rates.

The data for all three types of calls shows that the middle-of-the-day hours are not favorable for calling leads, especially 12 to 2 PM for calls to qualify leads. A simple possible explanation may be that people are busy with other activities during that time. Additionally, it’s worth mentioning that calls resulting in lead qualification occur during non-standard work hours, confirming that engaging in more critical processes is less dependent on specific times than making contacts.

One of the similar studies explored whether the days of the week and the time of the day impact the success rate of cold calls.

The days-of-the-week data confirms the findings of previous lead response time studies. It is particularly reminiscent of the research exploring success rates of initial calls to contact leads. Wednesday and Thursday are the best days, and the difference between the beginning and the middle of the workweek is over 100%.

As for the hourly data, it shows two periods when people are more likely to engage in conversations after receiving a call: late morning and late afternoon. The difference between the highest and the lowest stats (during regular work hours) is over 100% as well. That shows the same patterns as with the call-to-contact stats but with the shift to the later hours.

These lead response time statistics align perfectly with our proposal that the contact success rates are more dependent on the day of the week and the time of the day for engaging in the initial contact. Specifically, call-to-contact statistics show more similarity to cold calls than contact-to-qualify.

Impact of Timing on Lead Response Success

Summarizing the presented data in this chapter suggests that Wednesday and Thursday are overall better for lead responses than the rest of the week, and the periods from 8 AM to 10 AM and 4 PM to 5 PM are more favorable than lunchtime or the end of the workday. However, the importance of timing is less pronounced for cases when engaging customers in sales processes.

It is crucial to consider the timing for lead responses. For example, if you call a lead at the wrong time, you might have a 50% lower chance of getting on the phone with the right person or hearing a refusal to proceed with the conversation at that moment. This results in a failed contact attempt and delayed initial contact, which, in turn, dramatically decreases your chances for lead conversion.

We are not suggesting to increase response time just to fit in a specific time slot. Instead, carefully plan your lead-capturing campaigns. Ideally, schedule lead acquisition for the time when you have the highest odds of successfully contacting a lead in the first attempt.

Relationship Between Company Size, Industry, Structure, and Conversion Rates

It is helpful to compare which businesses, in terms of size, industry, and organization, show better conversion rates and attempt to detect factors contributing to lead conversion.

The recent study analyzed businesses across 14 industries and found that the average conversion rate is 2.9%. The businesses that exhibit the highest conversion rates are professional services (4.6%), industrial (4.0%), and automotive businesses. The lowest conversion rates are in B2B eCommerce (1.8%), B2C (2.1%), B2B Tech (2.3%), and agencies (2.3%). This data provides limited hints at lead management best practices but suggests that the businesses dealing with software and online presence show the lowest conversion rates, perhaps due to intense competition in their spheres.

The Kellogg School of Management study analyzed the relationship between the company’s size and conversion rates. The data in this study reveals that the lead qualification and close rates decrease with the increase in the number of employees.

Although the decrease in qualification and close rates with each next tier is not very large, it is still important to note that the rates go down in larger companies. One explanation for this could be that with the larger structures, it takes longer for the acquired lead to get to the relevant salesperson, delaying the lead response.

The same lead response management study compared the conversion rates of companies with two types of sales processes: generalist and specialist. On average, companies with the generalist approach, where one rep is responsible for the entire sales process, reported 7.9% lower close rates than the specialist, where the rep hands over the lead to another specialist after achieving a specific goal, such as contacting the lead.

On the way to convert the lead, the sales team may have to complete various goals, each requiring different approaches better suited for different professionals. Consider that most visitors coming to your website are not ready to buy. But they may become your customers in the future. In such a case, lead nurturing is ideal until your lead response management system hands off the lead to a representative whose goal is to qualify or convert.

Given this data, companies need to structure their sales teams in a way that different reps focus on specific stages of the buying journey. However, the handing-off and lead distribution process must not create significant delays for lead responses, as we have seen that timing is among the most essential variables in lead conversion rates. Automated lead managing solutions allow the leads to get to the right reps at optimal times, resulting in a lead response time decline.

Other marketing automation tools, such as automatic call distribution software, email response management systems, and AI lead follow-up systems, can further facilitate lead conversions.

Factors To Consider for Lead Response Management Best Practices

In the current lead response management study, we carefully explored the available data on different factors that impact lead conversion rates. The most crucial variable is the speed-to-lead responses: faster lead response provides more chances to secure a lead. The striking data reveals an 11 times higher chance of a successful lead contact within the first hour compared to the second and five times better odds within the first 5 minutes compared to the second.

We also found several factors to be crucial for efficient lead response management while also they are essential for the explanation of the speed to lead statistics:

1. Surveys indicate that one in three users expects to receive an email or phone call from businesses within an hour after an inquiry. Lead responses that fail to meet this requirement have minimal chances for conversion.
2. Customers favor offers they receive first. Even if your lead response time aligns with general user expectations, the competitor may outrun you.
3. Failed contact attempts hurt lead conversion rates. A faster lead response allows you to reach the person who expressed interest in your company on the first attempt. Connecting with the right person within the first minutes of the lead acquisition multiplies your chances for success.

We have also examined the data about the best time for lead responses and identified the optimal days of the week and time of the day for initial contacts with prospects through emails or calls. The best practices for lead response management must consider the speed to connect to the lead after its acquisition and the specific timing and plan lead-generating campaigns accordingly.

By comparing different types of lead responses (initial calls to establish contact versus calls to engage in the buyer’s journey), we discovered a consistent pattern: engaging in more critical processes, like entering the customer journey, is less dependent on specific times and even lead response speed than making initial contacts.

Finally, we have uncovered the significance of the internal lead distribution on the conversion rates. Companies that transfer leads between their reps to complete different sales process stages show better results. Lead tracking and distribution systems, such as LMS Sync by Phonexa, help automate lead response management and decrease lead time conversion and inbound lead response time.