Sales and the shrinking lifespan of a sales opportunity – by Garth Hoff
I’ve heard sales reps for years say things like, “time kills deals;” sometimes just noted as TKD. There is an obsession with being the first into an opportunity, the last to present, and of course the fastest to respond to any proposal.
The short life of sales leads is where we enter into the pricing conversation here on speed.
The short life of a sales lead
James B. Oldroyd is an academic researcher and professor currently at BYU. He is perhaps best known for a series of research studies on lead-response management while completing a PhD at The Kellogg School of Management at Northwestern and updated later while a faculty fellow at MIT. The studies focused on a number of areas of sales including how, when, and how fast to reply to a sales inquiry.
As it turns out, Wednesdays and Thursdays are the best days to call and 4 to 6pm are the best times to call. Most importantly, he discovered that the odds of calling to contact a lead decreased by over 10 times after the 1st hour. After 20 hours, every additional call attempt your salespeople make actually hurts your ability to make contact to quality a lead.
The Short Life of Online Sales Leads
These findings boil down to one or two important points:
1) The immediacy of your response is far more important than other factors (e.g. time of day…)
2) When you wait too long to make contact and then try calling it actually makes things worse
Customer engagement during the sales cycle
In a different study, the researchers found that your prospective customer spend more than half of their search time allotted on product selection before they ever contact a sales rep. It may come as no surprise to experienced sales professionals that many companies prefer to complete as much due diligence as possible before contacting a sales rep.
The Sale is 57% Complete Before You’re Engaged
The bottom line… speed wins deals
Finally, going back Dr. Oldroyd, we also find that not only is speed of response important get gaining engagement, but it’s even more important than that. A plurality of buyers will select the vendor that responds to their request first, and the odds of entering the sales process dramatically when you respond quickly.
“50% of buyers choose the vendor that responds first.”
“the odds of the lead entering the sales process… are 21 times greater when contacted within 5 minutes versus 30 minutes after the lead was submitted.”
Salesforce enablement reduces costs, increases productivity, and wins more deals
In the case of one of our customers, Price f(x) is able to help better align pricing processes globally and improve decision making. Of course, the best strategy is useless without universal adoption by the sales force. This is why integration with SFDC for more than 1,000 sales reps worldwide was a critical factor the success of this implementation. Speed of quoting is critical for customers who want to reduce their sales costs and improve time utilization of their sales executives. More importantly, a fast response to a pricing request, with margin optimized pricing, can by itself dramatically improve the chances of winning a deal.
Think of Price f(x) as a great family SUV, with a Dodge 707 Hellcat engine and rocket boosters, and a swiss army knife bolted on the roof. In short… really fast, really flexible, and really effective in changing the game for you and your pricing team.
What does this all mean for those of us that are pricing professionals?
Speed is increasingly critical in business success, and in the context of pricing it’s becoming a competitive differentiator. Completing a quote that is fast (in combination with good product mix and margin optimized price) is a game changer for companies in highly competitive markets . It will be those companies who implement fast, flexible, and smart pricing who will succeed in a new market reality driven by shrinking sales lead cycles.