You’ve heard the stat 1,000 times…
“You have a 7x chance of connecting with a lead in the 1st hour versus just one hour later.”
This stat comes from a Harvard Business Review study and for today’s B2B sales and marketing teams, it has several problems…
First, it was published in 2011. That was almost 7 years ago!
Do you realize how much has changed since 2011?
- Uber had only just launched (and it was called UberCab)
- Postmates had also only just launched
- DoorDash didn’t exist and neither did Instacart
- Facebook was still your favorite social network (unless you were cool and an early adopter of Instagram) and no one knew who Evan Spiegel was
The point is, the “On-Demand Economy,” that we can’t live without today, was just getting started.
Second, that HBR study is actually often misquoted. While the study audited over 2,200 companies, that was only to measure the amount of time it took for those companies to respond to their leads.
The study which measured the correlation between lead response time and likelihood to connect with a key decision maker (i.e. the stat above that we’ve all seen quoted everywhere) only looked at 42 companies in total and only 13 of those were B2B companies.
This matters because B2B companies and products (especially SaaS) typically have bigger differentiators between their competitors compared to B2C, which means B2C customers can more easily and quickly find a viable solution somewhere else if not called soon enough.
For example, if a SaaS company knows about Chili Piper and the value of our buyer enablement solution, they’re going to wait (a reasonable amount of time) for us to call them because they know they can’t get the same solution anywhere else.
Contrast this to the type of leads say a plumber gets. Their buyers are not going to care as much which plumbing company helps them – they’re going to care more about which company can come out the soonest for the best price.
For plumbing companies, speed-to-lead matters. For B2B SaaS companies? Not so much anymore.
Let me explain.
Four Reasons Why Speed-to-Lead Isn’t Worth Measuring
Before we dig in, let’s define what speed-to-lead is actually measuring.
Speed-to-lead is typically measured as the length of time between a demo request form submission and the first contact attempt from a sales rep.
But with today’s marketing and sales tech and our current buyer landscape, your sales team receives leads in several different ways, which makes monitoring speed-to-lead challenging and futile.
The first challenge is the numerous communication channels your buyers can use to request a demo or contact sales.
Besides demo request form submissions, buyers can come through live web chat, chat bots, direct phone calls, or email replies to lead nurture cadences.
And sophisticated SaaS companies are even giving their buyers the option to pick a time and set their own meeting with sales without first having to talk to a sales rep.
All of these channels make it much more difficult to measure speed-to-lead and understand how fast your reps are responding to leads.
If you remove all these non-typical demo form submissions from your speed-to-lead calculation, you’re most likely removing a significant chunk of leads from the equation, devaluing the meaning of the metric.
The second challenge is buyers submit demo request forms at all times of the day.
And just because you get a lot of inbound lead volume at 10pm on weeknights or throughout Sunday for example, it doesn’t mean they want to be called at that hour or on their weekends.
So to get a more accurate measurement of speed-to-lead, you include only demo requests that 1) come through demo request forms and 2) during business hours.
Again, you have to remove another significant chunk of leads from your speed-to-lead equation even further devaluing the meaning of the metric.
Third, do you want your reps even calling bad fit leads?
In a study of the top 100 SaaS companies, Drift discovered the number of mandatory fields are rising on demo request forms “from an average of 6 mandatory fields in 2017 to an average of 7 in 2018.”
With more data, companies can better auto disqualify bad fit leads so their sales reps can spend more time having better conversations with good fit prospects who are more likely to buy.
Additionally, lead enrichment tools like Clearbit and predictive analytics tools like Madkudu are helping companies discover more data about their buyers for more accurate lead scoring and prioritization.
Now if you only include 1) leads from forms, 2) leads during business hours, and 3) exclude bad fit leads, you may have an accurate measurement of speed-to-lead…
But at this point, if it’s only measuring a small subset of your total leads, is that metric even insightful anymore?
I don’t think so.
Lastly, there is an incentive for sales reps to take their time
The ultimate goal after the demo form submission is to move the prospect to the next step of the sales funnel (typically a discovery call or demo with an AE).
If too much emphasis is placed on speed-to-lead, it can actually worsen your reps performance.
By losing focus of the ultimate goal. Goodhart’s Law states “when a measure becomes a target, it ceases to be a good measure.”
Yes, speed-to-lead can help improve your reps’ connect rates, but at the cost of better conversations with your prospects.
It’s important to communicate to your prospects the way they want you to. If a prospect wants to talk to you right away, they could call you or use chat.
If they submit a demo form, your reps should take the time to do a little research first. Your prospect will appreciate the more informative and personal call – it shows you care about them and they aren’t just a number to hit a quota.
A rep who prepares for the call, does preliminary research on the company, and has a few unique talking points ready for the call, has a much better chance of booking and converting the prospect – something that can never be done when speed-to-lead is prioritized above all else.
Doing prep work before the call allows sales reps to bring up specific value points unique to that prospect, which will result in a better conversation for the prospect and a higher chance of conversion.
Kevin Dorsey (VP of Inside Sales at PatientPop) and I experienced this first hand when we worked together at ServiceTitan. As soon as he joined he started coaching the sales reps on better messaging and effective pre-call prep – and it worked.
“A slower speed-to-lead with a better-prepared rep will always beat just pure speed-to-lead. The data spoke for itself.”
It comes down to this: speed-to-lead is an outdated metric measuring an old process.
What is the new process? Buyer enablement.
As we like to put it, “Buyer enablement is helping make your future and current customers life easier, from the beginning of the buying journey to remaining happy customers.”
It means meeting buyers on their terms and offering them different methods of communication with you based on their preferences.
We don’t need a new metric. No new buzzwords. We just need to get back to focusing on the one tried and true metric that matters: meetings booked.
So Does Speed-to-Lead Not Matter at All?
Responding quickly to leads is still of course important, however…
We believe speed-to-lead shouldn’t be prioritized over the expense of a good buying experience.
This is especially true for leads generated through your website where you have more control over the buying experience.
And speed-to-lead is still critical for leads generated through pay-per-lead channels (e.g. Software Advice, Technology Advice), where they may not already be familiar with your brand and will have competitors calling them as well.