In 2011, researchers released the results of a Harvard Business Review audit they did on 2,241 U. S. companies to discover what exactly happened inside those businesses when a web lead arrived. What that actually means: someone who filled out a form, clicked a “Contact Us” button, or otherwise electronically waved their hand signaling they were interested in learning more. Of those 2,241 companies… The average wait time to contact was 42 hours. That’s 2 days and 6 hours.
23% didn’t respond at all.
Four years before that study, Dr. James Oldroyd from MIT’s Sloan School of Management ran a study of his own in conjunction with InsideSales.com, where he tracked 15,000 leads across six different companies. His conclusion: Your chances of contacting a lead decrease 100x when you wait more than 30 minutes to call them after they submit a form on your website. Your chance of qualifying that lead decreases 21x.
The problem wasn’t the leads those 2241 companies were generating. The problem was the system (or lack thereof) they had in place to convert those leads.
The Thing Most Founders Overlook
Lead generation and lead conversion are two distinct activities. They are not two sides of the same coin. They are not even the same type of problem. Mistreating them as such is the number one reason a marketing strategy can feel like it’s working while actually producing no customers.
Lead generation is the process of getting strangers to raise their hand. Everything we’ve covered from Episode 13 to 21 covers this: content, ads, SEO, social media, and referral programs. When executed correctly, its purpose is to produce a list of people who have said – through action, not just words – they are interested in your solution.
Lead conversion is what happens after that list is created. It’s the follow-up system. It’s the nurture sequence. It’s the timely response. It’s the content that answers all of the questions your prospects have while they are deciding whether or not to buy from you. You can create ten thousand leads and convert zero of them.
Creating ten thousand leads does not = creating ten thousand customers.
Lead Conversion Conversations
The reason most companies focus on lead generation to the exclusion of everything else is that generation is easy to understand. Conversion is not.
The HBR study showed that most companies threw all of their efforts into generation and zero into conversion. They built the top of the marketing funnel and left the bottom dry. Then they doubled down on generation because generating leads feels like progress. They filled the bucket. Only to leave that empty too.
Here’s what conversion actually takes.
Lead conversion is a time-dependent process. When someone takes the action of filling out a form on your website, they are hot. They are asking questions. Comparing options. Ready, right then and there to engage with your business.
Five minutes later, they might still be engaged. 30 minutes? According to Dr. Oldroyd’s study? You probably won’t reach them at all. 42 hours? Well, at that point the HBR study showed your prospect has either forgotten they filled out your form or has already bought from someone else.
Responding within five minutes doesn’t require some brilliant, cutting-edge marketing strategy. It just requires showing up while they are still there.
That time sensitivity is just one aspect of conversion. Lead conversion also takes nurture. It’s a sequential process of follow-up contacts that move a prospect through the period between the first moment they express interest and the moment they actually decide to buy from you.
One study from Annuitas Group showed leads who were nurtured made purchases 47% larger than non-nurtured leads. Forrester Research found that companies who were Good at nurturing leads generate 50% more sales-ready leads at a cost of 33% less than their poor performing peers.
The difference wasn’t the leads. It was the system those companies used to treat those leads.
MarketingSherpa found that 61% of B2B marketers send all leads directly to sales with no nurturing in between. When those companies’ sales teams receive those leads, only 27% of them are qualified. The rest are cold.
A lead generation system fills a bucket. Sending emails to people after they ask to hear from you prevents that bucket from being empty by tomorrow morning.
Most companies build one and neglect the other. Startup founders often neglect both.
The Two Systems Every Founder Needs
A lead generation system creates leads. A mechanism for capturing a stranger's email. This can be as simple as an email opt-in form on your homepage or as complex as a full-fledged content marketing strategy complete with a lead-generating squeeze page. All of these things live and function fully, independently of what happens after someone actually submits their contact information.
A lead conversion system turns those leads into customers. A response that hits their inbox within minutes of submitting their information. An automated sequence of emails that answers every question your prospect is too shy to actually ask. A follow-up phone call scheduled to happen when your lead is most likely to say yes. All of these things require a system to work at all.
If your company is generating leads but none of them are converting, chances are you built the first system and never bothered with the second. You looked at your pile of leads and assumed something was wrong with them.
Blame your ads. Blame your content. Blame your offer. But the leads were fine. You just never built a way to follow up with them.
