Lead Response Time

Why is Lead Response Time important?

The importance of Lead Response Time lies in that the sooner you reply to your leads, the more likely you are to keep them.

When a lead reaches out, time is of the essence. A now-infamous study from Harvard University found that companies who waited more than 24 hours to contact their leads were 60 times less likely to convert them to customers, in contrast to those companies who contacted their leads within a 24-hour period.

The same study found the average Lead Response Time among American businesses was 42 hours – and this only applied to the 77 percent of companies that responded to their leads at all!

Even smaller Lead Response Times are significant. The same study found that businesses who contacted their leads within an hour were seven times more likely to retain these leads than businesses who waited an hour or more to contact their leads.

While this study was published in 2011–and it’s hopeful that businesses’ initiative to respond to leads has improved since then–the lesson we can learn from it is timeless. Failing to respond to leads in a timely manner directly sabotages your business, as leads who don’t hear back from you are more likely to abandon pursuing your product or service in favor of your competitors’.

How to calculate your Lead Response Time

Calculating your Lead Response Time occurs in three steps.

First, find the response times for each of your leads. These are the lengths of time (whether minutes, hours, or days) between the lead’s initial touchpoint with your company, and your response to the lead.

Second, add all response times together.

Finally, divide the sum you obtained in Step 2 by your number of contacts. This gives your Lead Response Time – the average of minutes, hours, or days it takes for your business to respond to leads.

Step 1

Time or date of new contact – Time or date of follow-up = Response Time

Step 2

Response Time 1 + Response Time 2 + Response Time 3 … = Sum of all response times

Step 3

Sum of all response times / Number of contacts = Lead Response Time

Best practices to improve your Lead Response Time

The overall best practice for Lead Response Time is to reduce it. As obtaining customers and closing deals is heavily dependent on response time length, it’s in your best interest to have it as short as possible.

That said, not all leads are created equal – so it can be helpful to know which types of leads to prioritize. The most important leads are those in which the potential customer is directly interfacing with your product or service – for example, a lead having requested a demo. This type of lead will take precedence over one which only signs up for a newsletter, for example.

To ensure quick response times, it’s vital that your sales team is staffed appropriately. This is especially important if your company is spread across multiple time zones.

Finally, consider adopting a chatbot or other AI that can direct potential leads, especially those of a lower priority, to more information about your company.

Other KPIs similar to Lead Response Time include:

• Customer Acquisition Cost
• Average Deal Size
• Sales Conversion Rate