Conclusions from sales and marketing research are head-slappers. Many global businesses aren’t meeting expectations of online customers.
Increasingly, businesses are using customer relationship software (CRM) but they’re not using it for maximum revenue. That’s the conclusion from a Velocify study, study “The Impact of CRM on Sales Lead Response.”
The 2014 study concludes that many companies that use CRM were following up on leads via e-mail and phone more effectively than Fortune 100 companies.
But the rub is that the companies are still responding too slowly to prospects’ inquiries – they’re not meeting the expectations of their potential customers.
This, of course, means the businesses’ sales opportunity costs are too high.
Worse, considering businesses invest an aggregate of $20 billion in CRM, 13 percent of customers never even hear from a sales rep.
Even if they do get a response, another 19 percent of prospects wait days or even weeks before they get a response.
“There is no denying CRM solutions have made a significant impact on the effectiveness of sales organizations, however, this study provides evidence that CRM solutions alone aren’t enough,” said Nick Hedges, president and CEO at Velocify in a press release.
“This study found a clear gap exists at the initial point of contact with a prospect. Even the savviest of CRM users are letting ripe leads die on the vine by failing to respond, waiting too long to contact an inquiring buyer and giving up too soon,” he added.
Secret shoppers
Velocify conducted a secret-shopper study. The shoppers recorded how quickly the businesses responded by phone and email. The shoppers also tracked how many response attempts were made in the subsequent 22 days.
More on the study’s findings:
— No response – 13 percent of leads received no response of any kind to their online inquiry – not a single email or phone call.
— Slow response via phone – The average buyer wait time for a phone call in response to a sales inquiry was 2 days. Previous Velocify research [2] found that attempting to contact a lead within three minutes of a web inquiry being submitted increases the likelihood of that lead converting into a paying customer by 98 percent.
— Slow response via email – While the average email response time was better, with nearly 35 percent of inquiring buyers receiving an email response in under an hour, previous Velocify research [2] would suggest room for improvement, indicating the optimal time for email follow-up is 20 minutes.
— Lack of persistence – Only 57 percent of inquiring buyers received at least one phone call and one email in response to their inquiries. Previous Velocify research [3] found the optimal number of call attempts is six and email attempts is five. Only 13 percent of leads received close to the optimal number of follow-up calls, receiving between five and seven attempts.
Comparisons:
— Companies that used sales CRM solutions sent email responses on average three times faster than Fortune 100 companies (studied earlier in 2014) and were nearly twice as fast to call up inquiring buyers.
— Sales CRM users were more persistent on average than Fortune 100 companies, making 23 percent more call attempts on average and sending 29 percent more emails on average. As a group, however, CRM users are still a long way from best practices.
— Tech companies performed 60 percent better than non-tech companies in following optimal contact strategies.
— Sales teams using one of the five CRMs included in this study significantly outperformed all other sales CRM users. Details can be found in the study here.
Velocify is a top provider of cloud-based intelligent software. Obviously, Velocify has a possible dubious motivation to conduct such a study, but my sense the conclusions are valid. (This portal does not receive any remuneration for articles.)
My sense regarding the issues raised by study – there are relatively simple solutions:
The study’s conclusions serve as an indictment. Companies need to use best practices in lead response. Savvy customers today want a better buying experience. The companies that provide it increase their revenue and get a stronger return on their CRM investments.
Sales managers need to manage by plugging the holes. Sales reps should be poised to jump on any such leads. And they should be persistent in their follow-up.
From the Coach’s Corner, here are sales-management solutions:
Is Your Company Underperforming in Marketing / Sales? Evaluate Your Culture — If you’re dissatisfied with your revenue, it’s time for an assessment of your culture’s operation. Why? Superior cultures drive business performance. Specifically, two key elements of culture – innovation and responsiveness – have a direct impact on your company’s sales success.
Critical Fundamentals to Build the Best Sales Staff — The crucial question: How can a company develop a top sales crew? Short answer: Start with a premise — if it were so easy then everybody would be doing it. Long answer: Some companies are achieving stellar sales results in complex global situations by adopting best practices.
Sales Management: Motivate Your Staff in 10 Seconds — All too-often when sales managers are busy, they’re task-oriented. Not to be critical, but they’re focused only on what’s at the end of their noses. For effective management and revenue, the trick is to guard against it.
Checklist to Create Cyber Monday Sales Success — In order to celebrate your Cyber Monday sales, you must first create a happy buying environment. That means reviewing your store and Web site to attract prospects and to create happy customers.
“Whenever an individual or a business decides that success has been attained, progress stops.”
–Thomas J. Watson Jr.
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