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CRMTHE IMPACT OF

ON SALES LEAD RESPONSE

http://www.velocify.com/

THE IMPACT OF CRM ON SALES LEAD RESPONSE

Copyright © Velocify, Inc. All rights reserved. This material may not be published, reproduced, broadcast, rewritten, or redistributed without expressed written permission.

2

SUBMIT

Methodology

FIND APPROPRIATE SALES FORMS

SUBMIT CONTACTINFORMATION

STARTTHE CLOCK

GIVE COMPANIES22 DAYS

TO RESPOND

TRACK RESPONSE

PERFORMANCE

Key Performance Indicators

SPEED-TO-CALL SPEED-TO-EMAIL NUMBER OF CALL ATTEMPTS

NUMBER OFEMAILS SENT

www.velocify.com | 888.843.1777 |

Customer relationship management, or CRM, has had

many forms in its journey to become what is now a fast-

growing $20 billion industry. Today, CRM is used by many

companies, in part, as a sales force automation tool to

assist in the sales process of converting prospects into

paying customers. Previous Velocify studies have shown

that the largest companies in the United States have a lot

of room for improving key parts of their sales process. As

buyers and sellers continue to shift toward heavier online

activity and interaction, Velocify researchers set out to

uncover whether or not companies that use CRM solutions

for automating sales activities were better at responding to

online leads.

To find out, Velocify conducted an online secret shopper

study on 31 companies that use Salesforce, Oracle CRM, MS

Dynamics CRM, NetSuite, or Sugar CRM. The companies

selected were highlighted prominently on CRM company

websites as customers who had successfully deployed

and utilized their technology for selling purposes.

First, researchers found appropriate online lead forms

for each company. Only forms where potential customers

can express strong interest to purchase such as demo or

quote requests were used in this study. Multiple inquiries

were submitted during normal business hours and the

clock started ticking as soon as forms were submitted.

Companies were given 22 days to respond via phone

and email, at which point the following key performance

indicators (KPIs) were tracked:

Previous Velocify research, The Ultimate Contact Strategy,

found correlations between these KPIs and lead conversion

rates. By comparing performance in each of these KPIs,

Velocify is able to evaluate each company’s effectiveness

in responding to online leads, which is a proxy for sales

performance.

Introduction

http://velocify.com/


http://pages.velocify.com/UltimateContactStrategy.html



3

Only Emails

16%

Calls and Emails

57%

Only Calls

14%

29% did not receive a phone call

27% did not receive an email

No Callsor Emails

13%

Figure A

Inquiry Response Breakdown


According to Gartner, the CRM market will be worth $36

billion by 2017.1 This growth can be attributed to the

growing number of companies realizing the value of long-

term customer relationships. However, the process of

converting inquiring buyers into paying customers remains

an area for improvement for most companies, as shown in

recent secret shopper studies conducted on Fortune 100

companies and others.

Requesting a demo, product information, or a price quote

is an inquiring buyer’s way of telling a company that they

are interested in potentially becoming a customer. Given

the correlations between inquiry response practices and

conversion rates, it is important for companies to respond

swiftly and with the appropriate persistence to maximize

the probability of conversion. While slow response and

a lack of persistence will hinder a company’s ability to

convert inquiring prospects into customers, not responding

at all brings the probability of conversion to almost zero

percent. Given that every lead form submitted as part of

this study had both phone number and email fields, it was

surprising to find that less than 60% of inquiring prospects

received both phone and email response from the seller,

as shown in Figure A. Perhaps even more startling, almost

30% of inquiring prospects did not receive a single phone

call, and 13% of inquiring prospects never received any kind

of communication. This shows that although companies

collect both phone numbers and email addresses, many are

not taking full advantage of this valuable information, and

others are simply failing to respond to prospective buyers.

Results

1 Gartner, Forecast: Enterprise Software Markets, Worldwide, 2012-2017





4www.velocify.com | 888.843.1777 |

Of the 71% of inquiring buyers that received a callback, the

average wait time for the first call from companies was two

days. This average response speed falls short of meeting

online buyer expectations according to research conducted

by Zogby Analytics which found that most buyers expect

a callback within 24 hours.2 Zogby’s research also found

that 64% of online buyers believe the first company to

call them has an advantage over the competition. It is

intuitive that the longer prospective buyers wait to hear

back from a company, the less likely they are to engage

and the more likely they are to purchase from a more

responsive competitor. Previous Velocify research further

validates the importance of speed-to-call, revealing a

contact attempt within one minute of inquiry submission

increases the likelihood of converting that lead into a

paying customer by 391%.3

Figure B shows how long it took for inquiring prospects

to receive an initial call from sellers, grouped by seconds,

minutes, hours, days, and weeks. Only 2% of prospects

received an initial call within one minute of inquiry

submission. About 20% received a call in less than one

hour. Because faster response time translates to higher

conversion rates, companies that call leads in less than one

hour are maximizing the value of those leads and providing

an experience that is more in line with buyer expectations.

Of the leads submitted during this study, 30% received

a callback within hours while 11% received an initial call

within days. While responding within hours is clearly better

than responding within days, Velocify research shows that

responding to a lead one hour or later significantly drops

the probability of conversion. Therefore, companies that

respond to leads in hours or days are leaving money on

the table.

Speed-to-Call Attempt

2 Zogby Analytics, Online Buyer Expectations 3 Velocify, The Ultimate Contact Strategy



http://pages.velocify.com/OnlineBuyerExpectations2.html?wp=109




5

Initial Call Response Time

Figure B

0%

5%

10%

15%

Perc

ent o

f Buy

er In

quiri

es

20%

25%

30%

35%

SecondsCall Response Time

Minutes Hours Days Weeks No Calls

Maximizing Value Leaving Money on the Table Wasting Investments


While companies that use CRM responded faster on

average compared to companies evaluated in previous

secret shopper studies, it was surprising to find that almost

40% of inquiring buyers in this study either waited weeks

to hear back via phone or did not hear back at all. Given

the large amount of money that is spent on advertising and

CRM software, companies that take weeks to respond or

do not respond at all are wasting those investments and

can benefit significantly from improving their response

strategy.





6

Initial Email Response Time

Figure C

0%

5%

10%

15%

Perc

ent o

f Buy

er In

quiri

es 20%

25%

30%

SecondsEmailTime

Minutes Hours Days Weeks No Emails

Maximizing Value Leaving Money on The Table Wasting Investments


As would be expected, the average time prospects

waited to receive an email was shorter compared to the

average callback time. As seen in Figure C, the shorter

email response time is due to a higher percentage of

inquiring prospects receiving a response within seconds

and minutes as well as a lower percentage receiving a

response within weeks. Previous Velocify research has

shown that the optimal time to email an inquiring prospect is

20 minutes after a lead is received.4 Therefore, companies

that respond within seconds or minutes are maximizing the

value of their leads. 35% of inquiring prospects received

an email within this time period while 36% received an

email within hours or days. Considering that all companies

studied in this experiment were CRM customer success

stories, it wouldn’t be a stretch to say that many of the

firms studied aren’t yet getting the most from their CRM

investment.

While there was considerable variance in the consistency

of email response times at the inquiry level, there was far

less variance at the company level. Companies were 55%

more consistent in their email response times compared

to their call response times. This suggests that more

companies have a standardized process for the timing of

the first email sent and that the timing of the first call is

largely left to the judgment of individual sales reps.

Speed-to-Email

4 Velocify, The Ultimate Contact Strategy






7

Number of Calls

Figure D

0%

10%

5%

15%

20%

25%

30%

35%

Perc

ent o

f Buy

er In

quiri

es

No Calls 1 2 3 4 5 6 7 8 9 10 11 12or More

Appropriately Persistent

Total Neglect

Making an Eort

Ine�cient Over-Calling

Pestering


During the time of this study, researchers did not respond

to communication attempts made by sellers. Therefore,

tracking the number of call attempts made by the seller’s

sales representative is a measure of persistence. When

responding to interested prospects, it might seem rational

to make as many calls as necessary until contact is made.

One could also argue that after a couple of failed attempts,

resources should be diverted to more optimal places.

According to previous Velocify research, the answer

is somewhere in between. By looking at data on the

progression of millions of leads, Velocify uncovered that the

optimal number of call attempts is six.5 The reason is that

93% of leads that eventually convert have been contacted

by the sixth call attempt. When companies continue to

dedicate resources into contacting the remaining 7%, they

begin to experience diminishing returns.

As seen in Figure D, only 13% of inquiring prospects

received close to the optimal number of calls (between

five and seven calls) before the seller gave up. When sales

reps make the optimal number of calls, they are maximizing

the value of their time because effort is neither wasted nor

over-spent. In general, sales reps could have been more

persistent with 72% of prospects receiving four or fewer

calls. 15% were over-called, which means that valuable

sales rep time could have been better spent on other

opportunities or tasks.

Number of Call Attempts







8

Number of Emails

0%

10%

5%

15%

25%

20%

Perc

ent o

f Buy

er In

quiri

es

35%

30%

No Emails 1 2 3 4 5 6 7 8 9

Appropriately Persistent

Total Neglect

Making an E ort

Inecient Over-Emailing

Figure E


The same method used to find the optimal number of calls

was used to find that the optimal number of emails to send

in a 22 day period is five.6 Only 8% of prospects received

close to the optimal number of emails (between 4 and 6)

while 4% were sent too many emails. A sizable 88% were

either under-emailed or not emailed at all. Considering

the low cost and ease of sending emails, it is surprising

that companies studied were not more persistent. By

giving up on unresponsive prospective buyers too quickly,

companies are missing out on sales that could have been

made with a bit more persistence.

As seen within the speed metrics, companies show

far more consistency in their persistence with emails

compared to their persistence with calls. Companies were

152% more consistent in the number of emails sent to

prospects compared to the number of call attempts made,

suggesting that there is more of a standardized process

when sending emails and that the number of calls made

to a prospect is more likely to be left to the judgment of

individual sales reps.

Number of Emails Attempts







9

Companies that Use CRM vs Fortune 100: Speed Metrics

Figure F

Spee

d -t

o- C

all

2 Days

1.1 Days

3.5 Days

3.3 Days

Spee

d -t

o- E

mai

l

0DAYS 1 2 3 4

Best Practice

Fortune 100 Companies

Companies that Use CRM


A previous secret shopper study conducted on Fortune 100

companies revealed that the largest companies in America

have much room for improvement in their response to

online prospect inquires. There are undoubtedly Fortune

100 companies that use CRM solutions to enhance their

sales process and companies that are highlighted as CRM

success stories that are also part of the Fortune 100. The

key difference in the two samples is that sales CRM users

are not only confirmed but featured users while Fortune

100 companies vary widely in their use of CRM solutions.

Furthermore, larger, established companies are known to

use legacy systems and have a difficult time transitioning

to newer technologies such as cloud-based CRM systems.

Figure F shows how sales CRM users compare to Fortune

100 companies on both speed metrics (speed-to-call and

speed-to-email). Sales organizations using CRM clearly

perform better than Fortune 100 companies on both

metrics, responding more than a day faster via phone

and more than two days faster via email. However, there

is still much room for improvement for sales organizations

using CRM, improvement that can lead to better buyer

experiences and more captured revenue.

Sales CRM Users Compared to Fortune 100 Companies





10

Companies that Use CRM vs Fortune 100: Persistence Metrics

Figure G

3.2Calls

1.8Emails 1.4

Emails

2.6Calls

Num

ber o

f Con

tact

Att

empt

s

Number of Calls Number of Emails

0

1

2

3

4

5

6

Best Practice

Fortune 100 Companies

Companies that Use CRM


Figure G shows how sales organizations using CRM

compare to Fortune 100 companies on persistence metrics.

Again, we see that sales CRM users outperform Fortune

100 companies by being more persistent when faced with

unresponsive leads. They make more calls and send more

emails compared to Fortune 100 companies but as a group

they are still a long way from best practices and can benefit

from being more responsive and persistent.





11

Companies that Scored 60 or Higher

Figure H

Companies thatUse Salesforce

Companies thatUse Other CRMs

0

5%

10%

15%

20%

25%

30%

35%


In order to compare performance amongst companies in

this study, Velocify computed a lead response score for

each company based on a 100 point scale, and determined

by performance in each of the four KPIs relative to best

practices. Using the aggregate response scores of the

sellers using each CRM, we were able to tabulate a total

average score for the users of each CRM. What we found

was Salesforce users outperformed the companies using

other CRMs. Additionally, a higher percentage of Salesforce

users achieved a score of 60 or higher compared to users

of other CRMs. Only a small percentage of companies

assessed in previous secret shopper studies managed to

achieve this score or better. As seen in Figure H, almost

one third of Salesforce users scored 60 or higher while

only 6% of companies that use other CRMs were able to

do so.

Salesforce Users Compared to Other CRM Users





12

Available Third-Party Sales Apps

Figure I

Salesforce Average of Other CRMs

0

200

400

600

800

1000

1200


One possible explanation for why Salesforce users perform

better on average is the significantly larger number of third

party sales apps available on the Salesforce AppExchange

compared to the quantity of available apps to optimize

sales efforts for the other CRM solutions in this study.

Examples of popular third-party sales applications utilized

to supplement the functionality of Salesforce, include:

Apttus and Drawloop as well as apps from companies that

have integrated their products through the AppExchange

such as LinkedIn, Hoopla, Xactly, and DocuSign. To put

this point into perspective, even when the number of third

party sales apps available for the other four CRM solutions

are combined, they make up a fraction of what Salesforce

customers have at their disposal. As seen in Figure I,

there are almost 1,000 third party sales apps available for

Salesforce, while less than 500 are available for the other

four CRM solutions combined ( just over 100 applications

each on average).




13

Lead Response Performance by Industry

Figure J

-30%

-20%

-10%

0%

10%

20%

30%

PER

CEN

TA

BO

VE

AV

ERA

GE

PER

CEN

TB

ELO

W A

VER

AG

E

Non-tech

Tech


Another interesting finding was that tech companies

performed better than companies from other industries.

This could be because tech companies are more likely to

embrace technology that helps with the sales process and

have more sophisticated implementation of the software.

As seen in Figure J, tech companies perform better

than average while non-tech companies perform below

average.

Tech Companies Perform Better





14

Lead Response Performance Amongst Tech Companies

Figure K

20%

15%

10%

5%

0%

-5%

-10%

-15%

PER

CEN

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BO

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ELO

W A

VER

AG

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Companies That UseOther CRMs

Campanies That UseSalesforce


Furthermore, when looking only at the higher performing

tech companies, we still see that Salesforce users perform

better than non-Salesforce users. Figure K shows that

tech companies that use Salesforce perform better than

average while tech companies that don’t use Salesforce

perform below average.





15

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Email: [email protected]

Web: velocify.com

Blog: velocify.com/blog

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Results of this study suggest that sales CRM solutions

help companies improve their performance in responding

to online leads. However, there is still much room for

improvement since research shows that companies

in this study fell well short of best practices and could

dramatically increase their conversion rates through

faster response and more persistence. According to Chief

Marketer, U.S. companies spend $118 billion annually on

content marketing, video marketing, and social media in

order to generate leads and new business.7 Therefore, by

improving the response to these leads being deliberately

generated, sellers have the ability to not only generate

more revenue, but increase the return on their marketing

and sales investments.

Ultimately, companies purchase CRM systems in order

to build lasting relationships with their customers. At

the beginning of any relationship is a first impression.

Potential buyers expect to hear back from companies in

a timely manner and with appropriate persistence. When

these expectations are not met, sellers inadvertently send

the wrong message about their interest in the buyer and

ultimately damage their brand perception and revenue

potential. Having the proper lead response strategy

not only helps companies convert more prospects into

customers, it gives buyers a positive first impression that

is at the foundation of a long and mutually beneficial

relationship between buyer and seller.

Conclusion

7 Chief Marketer, 2013 Sales Performance Benchmark Report


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16www.velocify.com | 888.843.1777 |

Velocify is a market-leading provider of cloud-based

intelligent sales software, designed for high-velocity sales

environments. Velocify helps sales teams keep pace with

the speed of opportunity and increase revenue by driving

rapid lead response, increased selling discipline, improved

productivity, and actionable selling insights. The company

has helped more than 1,500 companies across a variety

of industries improve customer acquisition practices and

sales performance. Velocify was recently recognized as

one of the fastest growing companies in North America

by Deloitte and a Best Place to Work by the Los Angeles

Business Journal. For more information, please visit

velocify.com or follow the company on Twitter @Velocify.

About Velocify




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