Coffee for Closers | Leads360 Sales & Marketing Blog 

The path to a successful sale is fraught with obstacles. Not a few of which are inside our own heads in the form of assumptions and erroneous beliefs.

Before we wave our fingers at the salespersons’ tendency to favor the quick close and not follow up on leads well, let’s first acknowledge that this behavior is commonplace for a reason. It makes sense. And in a world without a dedicated Lead Management Solution, it may actually be considered a best practice. What behavior am I talking about specifically? Salespersons are ‘hooked’ on the quick close. If one lead in a hundred is the one that is going to close quickly, why would you spend time on the phone with the ones that aren’t? Since the salesperson’s skill set and experience equip them to recognize when they have a lead on the line that they can close, why wouldn’t they just keep burning through calls, until they get that feeling that they have a ‘live one’ on the line? Wouldn’t you? Choosing a path other than this would mean that the ‘live one’ winds up on the line with one of the other salespeople.

Three obvious problems with basing your sales approach around the quick close are:

1. There is a margin of error. The lead may be a ‘live one’ that can be closed, but the sales agent can’t see it
2. It ignores the fact that 40-50% of leads will eventually close, even if they don’t close right away
3. Slow closing leads represent 77% of total sales

If those pieces of data are not persuasive enough, consider one even more critical fact: It’s not necessary to choose one or the other. With Lead Management Software, salesmen do not have to choose between chasing the quick close and nurturing leads. By using Lead Management Software, Salesmen can turn and burn calls, while funneling leads that are not quick closers into a nurture cycle.

A lead nurture cycle serves as an automated bidirectional reminder.

• It sends emails to the lead: “Don’t forget about this company, this sales agent, when you’re ready to buy, we’ll be here!”
• It sends reminders to the Salesman: “Don’t forget about this lead, when they’re ready to buy, you have to be there!”

Research in neuropsychology shows that one way the human brain organizes information is by retracing the steps that lead to a desired result and trying to replicate them. Your sales agents have for so long gotten positive results by working according to the old rules: Burning through calls as fast as they can to get to the one they can close. And Lead Management Software doesn’t require that sales agents ‘learn a new way to work’. Instead, it harnesses the sales agents enthusiasm for connecting to new leads while automating the more easily overlooked tasks of following up with leads that are not immediate closers.

The new lesson that salespersons are learning while using Lead Management is this: There are a lot more deals to be closed outside of that fish that just flops into the boat.

Recently, LeadCritic posted an article regarding the enormous growth in the For Profit EDU sector, and how although business is good, forward thought and preparation is going to be very important. Like LeadCritic mentioned, with access to internet ever increasing coupled with the fact that the work force is actively looking to get ahead and stand out, growth is moving as fast as a freight train.

From our vantage point at Leads360, we have watched the industries we serve experience the same lifecycle again and again. We know all too well how the Mortgage industry was effected and especially know how quickly things can go from good to bad, and then to worse. Over-saturation is a common fear in growing industries, and smart companies know that even when potential business is booming, they need to prepare to weather the times when it isn’t. Companies should embrace the bountiful period, but never take anything for granted.  The point of this warning is not to scare anyone, but to bring about a call to action. This cyclical nature can be looked at as good thing, de cluttering said space, and allowing for the survival of the fittest.  The separation of the “men from the boys” can allow companies who have prepared and are following best practices to establish themselves as industry players, and can create an environment for them to continue to grow and flourish far down the road. The keys for this preparation are fairly obvious. Make sure your company is not fooled by the tremendous growth by letting standards slide. Be sure to contact leads quickly and concisely, don’t allow for precious leads to be stranded by the wayside, and utilize current technology to stay ahead of the curve. Although you may find some things unnecessary at the moment, teaching your sales force how to embrace new technology before the storm, allows for an easy transition when your company needs it most. Take heed, but enjoy the ever expanding market.

Michael Ferree is an expert on online marketing and lead generation and his most recent article on imediaconnection.com highlights the necessity of strong Lead Management Systems like Leads360.

Most notable, is Michael’s reference to a Leads360 study that we conducted that shows that only 57% of lead conversion can be attributed to the quality of leads, while a whopping 43% comes down to smart and efficient lead management.  This means that success in sales cannot rely completely on one method or the other, as both are necessary to maximizing ROI and finding a systematic approach for consistent success.

The first area where lead management shows its value is in speed to contact.  Studies have shown that calling within the first five minutes will allow a sales staff to make contact with their lead 100 times more often than calling within the first half hour.  Internet leads move quickly, representing people who are actively shopping around and who will look at at least 2-3 different providers before they’re done.  The highest level of success will come from contacting that person immediately, while they’re still online and shopping, and before a competitor has reached them.  Lead Management Systems like Leads360, will increase the speed to first call for these leads and give a sales staff a much better chance of calling within the critical first five minutes.  What’s more, Lead Management Systems will also help with another key problem for teams dealing with internet leads: a failure to even contact the lead at all.  The same studies have shown that 37% of leads are never contacted even once!

The second key element that Michael explores is the number of call attempts made for each lead.  It should come as no surprise that persistence is a key element of success in converting leads, and a Leads360 study confirms that multiple call attempts will dramatically increase the chances of success.  A second call alone will increase the chances of contacting a lead by 87%.  Despite this fact, a shocking 50% of leads don’t receive a second call.  More interesting though is the fact that the metrics we collected indicate that there’s an ideal method of calling and number of calls, and calling too many times won’t increase the odds of contacting the lead.  By calling six times and varying the time of day with each call, sales teams can ensure that they contact leads and give themselves the best chance at converting.

Michael Ferree is a leader in the industry and it should come as no surprise that he’s familiar with the necessity of a solid Lead Management System.  A Lead Management System will isolate inefficiencies in your sales process and find solutions for them based on the data Ferree references.

You hire a sales team to do one thing, Sell. All too often, managers frustrated with their ROI, tend to go to what they think is the root of their problem, their sales department. Who could blame them though? Going through their checklist they think they are doing everything they can to convert the most sales. Adequate lead generation quantity? Check. Quality Leads? Check. Target market Research? Check. So it must be the sales team’s lack of effort right? WRONG. In today’s market, ensuring those items on the list only takes you half way there. Your company needs to maximize the potential it already possesses by creating an environment that is conducive to selling. Lead management technology in conjunction with tools like predictive dialing, create the best environment possible for your sales team to SELL. Think about how much time is wasted dialing people, waiting for them to pick, leaving a message, and then hanging up. With tools like predictive dialing, hundreds of numbers are automatically called and then routed to sales people once a lead answers the phone. This allows more time for sales people to properly engage the lead and make the most of it.  With all the extra time saved from the predictive dialer, an environment is created that maximizes performance and encourages success. Click to view  Leads360 and Five9’s whitepaper. 1+1=3

Please join us on December 9th at 11AM Pacific / 2PM Eastern for a brand new webinar about how to understand and leverage the unique characteristics of your sales process.  You can register here, for free, in about 5 seconds.

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What Planet Are You On? Leverage the Differences between B2C and B2B Sales and Marketing

Applying the 7 universal ground rules of sales and marketing and the 3 keys to lead conversion

Knowing what factors are critical to success in your business is not as obvious as you may think. The most successful sales and marketing organizations understand which planet they are on, and they know which sales and marketing approaches align with their needs.

Understanding the characteristics of your sales and marketing efforts are essential to achieving higher lead conversion and sales success.

Sign up for this free webinar to learn how the 7 universal ground rules of sales and marketing apply differently to B2C and B2B sales. Find out what the unique characteristics of your sales efforts are, and see how to leverage the 3 keys to lead conversion using powerful lead management software from Leads360.

From this webinar, you will learn:
•    Questions for better understanding the rules of your target marketplace and sales process
•    The 7 universal ground rules of sales and marketing
•    The 3 key drivers of sales lead conversion
•    How lead management software can boost your sales and increase ROI
•    Why implementing the wrong technology solution can cripple your business

We’ll see you there.

Here’s what our own Nisheeth Singh had to say about the study:

As you may have read on Lead Critic today, we released our newest research regarding the impact of call frequency on sales lead conversion.

To misquote a famous author: “Elementary, my dear Watson”. Sir Arthur Conan Doyle’s written works never actually saw this phrase although the first and second parts of the phrase were seen in close association during conversations. But I digress.

As many of you opined above and is the central premise of the paper (found here), sometimes the most obvious and logical actions are never taken by lead buyers. I don’t necessarily understand why they don’t but I do revel in the fact that it means significant upside for those that choose to engage with their leads smartly.

We conducted the study based on several million leads that our clients tried contacting over a period of many months to have as diverse a data set as possible. We studied the effects of multiple call attempts all the way to 20 and I’ve published the entire results of our study below just to whet your intellectual curiosity. Some explanation is in order:

* Column 1 denotes the call attempt

* Column 2 denotes the percentage of ‘Contactable leads’ contacted – this is key to understanding the study and is NOT the same as Contact Rate. This means that the data set excludes any leads that were never contacted. This metric is a percent of the remaining leads in our study which we define as ‘contactable leads’

* Column 3 denotes the percent improvement in the ‘% of Contactable leads contacted’ metric for each successive attempt over the very 1^st call attempt

* Column 4 denotes the percent improvement in the ‘% of Contactable leads contacted’ metric for each successive attempt over the preceding call attempt

Contact    % of Contactable   Improvement       Improvement over

Attempt   leads contacted    over 1st attempt    preceding attempt

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1                              39%

2                              72%                        87%                        87%

3                              83%                        114%                     15%

4                              88%                        128%                     6.5%

5                              91%                        136%                     3.4%

6                              93%                        141%                     2.1%

7                              95%                        145%                     1.5%

8                              96%                        148%                     1.1%

9                              96%                        150%                     0.8%

10                           97%                        151%                     0.6%

11                           97%                        152%                     0.5%

12                           98%                        153%                     0.3%

13                           98%                        154%                     0.3%

14                           98%                        154%                     0.3%

15                           98%                        155%                     0.2%

16                           99%                        155%                     0.2%

17                           99%                        156%                     0.2%

18                           99%                        156%                     0.1%

19                           99%                        156%                     0.1%

20                           99%                        157%                     0.1%

As you can see, the benefits of calling start trailing off pretty steeply after the 5^th or 6^th attempt, we chose to prescribe 6 attempts as the cut-off. I beg to defer with LeadCritic in that this is a very statistically relevant study with a data set this size and of this heterogeneity, at least at a high level. I do agree though that to get maximum benefit from a study like this, one should conduct the same study but specifically for their own sales team to understand the effect of call attempts on their contact rate.

Cheers!

Nisheeth Singh

Director of Strategic Intelligence, Leads360

The necessity of speed in sales is more apparent on the internet than anywhere else. In order to maximize the results on your leads, it’s essential that companies be able to react at the speed of business. This is especially true when it comes to internet leads. High quality internet leads are expensive and cannot be wasted, making it all the more important to be the first agent contacting a lead/potential client and to do so within five minutes of receiving that lead. The first salesperson to contact a quality lead is the one that makes the sale the majority of the time, and those that can get there inside of five minutes further improve their chances.

Leads that are contacted within the first five minutes are converted at a healthy rate of 19.86%, a number that drops to 4.96 percent in the first ten minutes, 2.12 in the first 15, and continue to fall precipitously the longer it takes to contact the lead. Of course, a higher rate of conversion isn’t the only reason speed in contacting leads is so important. There’s also the fact that contacting a lead within five minutes of their completing an online application increase contact rates by over 500% when compared to those attempting first contact at the 10 minute mark. Contacting in the first three minutes also improves the rate of qualifying high quality leads to as high as 76% while only 10% reached in the first six hours can expect the same results. Finally, over three quarters of buyers wind up closing with the company that contacts them first. Beating your competitors to the punch is essential and the most effective way to convert leads into business.

The early bird gets the worm, and a sales staff that can move immediately on high quality leads is more efficient and sees much better results.  Not only will they convert their leads at a much higher rate, but they will make a first contact more often and get in ahead of any competitors. Especially with the current state of the economy, it’s essential that neither time nor money be wasted on leads that don’t convert, and the best way to convert leads is to beat your competitors to the punch and get to potential buyers in the first five minutes.

When dealing with internet generated mortgage leads, the typical agreed upon conversion rate is between 1.5% – 2%. At this rate you can and should be profitable. Of course we’ve seen many clients that are converting much lower and we’ve seen some that convert quite a bit higher. One of the unique aspects of internet leads, in particular mortgage, is that they are often generated once and sold 3-4 times. This is pretty typical and widely accepted by the market. This practice however is the root of what I call the conversion conundrum. That is, even though the industry average for a mortgage lender to convert an internet lead is 1.5% – 2%, the actual average conversion rate of an internet consumer is actually 4.5% – 4.75%. That’s a 2-3% spread in the conversion rate. The reason for that is if a consumer goes online and submits their information as a lead to LowerMyBills.com for example. That lead is then sold to 4 mortgage lenders. Only one of those four companies can actually close that lead and if you calculate the conversion rate across all four lenders, it comes out to about 1.5% – 2%. But, when you calculate the actual conversion rate of that consumer, not taking into account which lender they chose, the internet consumer actually converts at about 4.5% – 4.75%. Interesting right?

Let me put it another way. If there is a 3% gap between conversion rates as I described above, what does a lender have to do to access that increase in conversion? That 3% is won purely by the behavior of the lender. In other words, the difference between the 1.5% and the 4.5% is the activity that a lender does when they get a lead. It’s about how fast they call that lead and how many times they follow-up.  It’s about what offers they give, what the loan officer says on the phone and so on. It’s all about the behavior of the lender after the lead has been given to them. That’s 100% controlled by the lender, not by the quality of the lead. So if a lender wants to reap the spread, they need to improve the behavior. That’s where we come in. We give our clients the tools and the training to get that extra 3% conversion and squeeze out the competition.

So, when we talk to mortgage lenders about conversion, and that’s really all they care about, we typically say shoot for 1.5% – 2%. But now, we tell them there is a 3% conversion spread just waiting to be grabbed. It’s all about what they do with the lead and we’re here to help them do it.

As some of you know, we’ve hired a lot of people lately in several departments all across Leads360. In January alone, I had four new individuals join the sales team. This is very exciting, but it’s also a lot of work. A lot, of work. Back in the day, Leads360, like many other companies, would bring in a new salesperson and throw them into the shark tank, and they would either sink, or swim. This approach is highly ineffective and is a complete waste of time and money. Getting good sales people is about identifying the strengths and weaknesses that you can work with, and nurturing them.

With this in mind, we’ve implemented a new training regimen up to and including pushups. Ok, I’m kidding, but we’re close, and I am still considering it. The plan is to expose these individuals to all facets of the organization, but focus heavily on what they will be doing when they start so that they hit the ground running, proficient with their assigned tasks. This way, they can play an integral part in the company from day one, and learn at the same pace as their assigned tasks require them to. Sales people who are thrown into the pit with everyone else often feel as though they are not contributing, and this idea permeates their entire being, and rather than contributing and learning, they scurry toward every possible deal whether it is a good one or not. We won’t be having that issue any longer.

We are building a professional sales force. Not a boiler room. A department that is not only reliable, but ethical, well learned, and helpful. How would you rate your sales force? Can you walk out of the room and trust that your people will do their job? Can you comfortably leave for a few days and trust that your sales staff will take care of your prospects and clients and treat them with respect and professionalism? We’ve mirrored our Best Practices ideals in house so that we actually walk the walk. Relationships always start in the sales department, and in order to have a long and fruitful relationship, it has to get off on the right foot. At least that’s what we think here, so I’m proud to say that we have a professional sales force, not a boiler room.

I read a very interesting blog this morning over at the XBroker. Jeff over at the XBroker talks about some radical changes needed in this market to run a shop, keep your head above water, and most importantly gain consumers trust. No doubt, he will take flak from people who are stuck in the past, but still worth the read.