Well, not "mad" so much as "incredibly brilliant." Dr. James Oldroyd (from the Korean business school SKK GSB) is probably the world's greatest expert on the measurement of cold calling. He examined and analyzed the electronic logs of more than a million cold calls, made by thousands of sales professionals inside approximately 50 companies. I recently interviewed him for a feature article; here's an excerpt from our conversation:
- GJ: What's been the most surprising discovery that's come from your research?
- JO: The days and times that are most effective for qualifying a sales lead into a real prospect. Turns out that Thursday is the best day and is, statistically speaking, 19.1% better than Friday, which is the worst day. Research also showed that 8am to 9am and 4pm to 5pm are the best times to call to qualify a lead. In fact, 8am to 9am is 164% better than calling at 1pm to 2pm. That runs counter to the long-held belief that the best time to call is right after lunch.
- GJ: How long do sales reps have to respond when somebody indicates an interest in a firm and its products?
- JO: Not very long. You are 4 times more likely to successfully qualify a lead if you call within 5 minutes than if you call between 5 and 10 minutes. You are 21 times more likely to qualify a lead if you call within 5 minutes than if you wait for 30 minutes.
- GJ: Is this true in B2B and B2C?
- JO: In B2C, response speed is absolutely vital. In B2B, you still have reasonably good odds of qualifying a lead if you call within 20 minutes after interest is shown. After 20 minutes, however, the value of that lead quickly declines and if you want to qualify it, you'll need to make a lot of repeated phone calls. After 4 months, the lead is completely dead, at which point you should drop the calling and put that lead into the cheapest possible nurturing program.
- GJ: Is that true of every industry and product category?
- JO: Sales leads in the financial and healthcare industries response times remain "live" for up to 24 hours. Sales leads in communications and IT industries require much faster response times, while professional services industries land roughly in the middle.
- GJ: How important is cold-calling and inside sales in business today?
- JO: Most of the growth in the sales industry is in this area. The growth rate of outside groups has nearly stalled, leveling off at a .5% annual growth. By contrast, companies are adding new inside sales departments at a rate of 7.5% annual growth. By 2012 nearly 800,000 companies are expected to add inside sales departments. Incidentally, even outside sales teams spend a lot of time on the phone.
- GJ: How is outside sales changing?
- JO: Outside sales responsibilities are becoming more and more like inside sales jobs. An average of 41% of outside sales activities are done over the phone. Companies need to provide similar tools to support both kinds of groups.
- GJ: How can I apply this research to sell more?
- JO: Always give priority to your newest leads. If you have a lead that is two hours old and one that just came in, focus on the on the one that just came in. If you do the opposite, you'll always be fighting an uphill battle trying to reactivate leads that are already dead.
- GJ: How can we find out what response patterns and strategies work best in a particular industry?
- JO: While understanding general patterns is useful, every organization has a specific type of customer that behaves in a slightly different manner. If you want to optimize you need to measure what's actually working, which means tracking your leads throughout the pipeline and then drawing conclusions based upon the patterns that emerge.
- GJ: Thank you for your time.
- JO: You're welcome.
MORE ON COLD-CALLING: