Oh, Gabe Larsen, When It Comes to Money, Sales Reps Understand and Value Percentages

If there is one thing I know to be true, it’s this — sales reps understand percentages. If you don’t believe me, try shorting them on a commission check and watch how fast they correct you and run you through the math. It doesn’t matter how complex the commission plan is, every accomplished sales rep I’ve ever met knows exactly how the math goes down, and they ensure they work every deal to get the most commission possible.

That’s what makes them so good.

Why does this matter? Let me explain.

Gabe Larsen of InsideSales.com recently responded to a post where I shared how the original InsideSales.com study that tells you to call back leads in <5 minutes should be challenged. I believe Gabe’s exact words were “…some nonsense about lead response time and how it’s not important to respond to leads quickly”. He then went on to say “…make it about the data.”

Oh, Gabe. If you were paying closer attention then you would know that VanillaSoft and the University of Ottawa’s Telfer School of Management have done exactly that, which is why I was on stage at the University of Houston’s Digital Sales Summit reporting the initial findings and the data behind them.

1. Make it about the data — When InsideSales.com first launched their findings it was pretty game-changing. Their conclusions were based on three years of data across six companies from over 15,000 leads and over 100,000 call attempts. In contrast to that study, the Telfer School of Managed used anonymized VanillaSoft data that included 130 million sales interactions, 45 million contacts, 4 million web leads and over 550 companies. Said another way, the Telfer research had over 265 times more leads than the InsideSales.com study from about a decade ago.
2. Speed matters, but not too fast — What I actually said, despite what you might have read in Gabe’s post, is that we agree that speed matters. The difference is the timing. If you want a successful outcome (i.e. you want the lead to continue through the sales process, rather than shutting it down completely) you are wiser to wait a bit longer than five minutes. If you call within five minutes, the likelihood of a positive outcome comes in at 7.1%. However, if you wait 15 minutes your odds rise to 12.3%, and if you wait 30 minutes your odds peak at 14.3%. The data indicates you can double your odds of success if you wait 30 minutes instead of making the call in 5 minutes or less. Remember what I said about how sales reps understand percentages? Every rep I know will have NO problem waiting 30 minutes instead of 5 if they can double their initial outcomes. This isn’t nonsense and we’re not starving reps by suggesting they wait a few minutes to follow up.
3. Speed Matters — The data presented by VanillaSoft completely agrees with InsideSales.com when it comes to responding within one hour. If you don’t do that you are leaving money on the table.
4. It is totally creepy to respond too fast — If you listen to Gabe, he assures us that prospects are impressed with rapid follow-up. I’m not disagreeing. They totally are. He also says it’s not creepy to call within 5 minutes. Trust him. He’s been selling for years. Instead of simply trusting Gabe’s opinion, I’m going to rely on the research. I’ll also tell you that every time we’ve presented this research, across multiple continents, and asked conference attendees why they think 5 minutes has a lower success rate, they’ve told us that it’s because it’s creepy to call a lead too quickly. Those are their words and not just ours. Ironically, I just briefed an industry analyst this morning and they said the same thing without any prompting from me.
5. HBR is a cool magazine, but so are peer-reviewed academic journals — Gabe reminds us that their research has appeared in Harvard Business Review. The implication is that the 5-minute rule must be right because…. it’s in HBR. However, HBR published this years and years ago. Things change. Buyers change. Presidents change. Privacy changes. The big difference is that this data represents the latest and greatest research. It was presented by the Telfer School of Management themselves at the 2018 American Marketing Association Conference. It’s been accepted for presentation at the 2018 Academy of Marketing Science (AMS) Conference. And, most relevant, it’s about to get published in a highly reputable Sales and Marketing academic journal. VanillaSoft just provided the data. We didn’t do the analysis. That was done by a neutral and highly respected third party academic institution.

Folks, this is simple stuff. Our goal here was never to discredit previous studies. Despite Gabe’s protestations, the data speaks for itself. Telfer has only provided data-driven insights from a large and diversified data set. You can choose to believe it, or not. 

If you’re like the professional sales reps I know, you want to play the percentages that favor you the most. You want the best chance at engaging with a lead so that you can eventually close the business. If you’re best in class, then you’re doing it within the hour. If you’re really good, then you’re doing it within 5 minutes. For many of you, the ability to engage within 30 minutes is far more attainable than the 5-minute rule and you’re high-fiving this new knowledge. 

For those who can’t achieve a one-hour response time, I highly encourage you to check out VanillaSoft because I’m sure we can help you out. And for those who truly believe 5 minutes is the golden rule, I suggest you consider an A/B test of 5 minutes vs 30 minutes; don’t take Gabe nor I as the purveyor of your own personal truth.

If you thought this bit of research was interesting, stay tuned. We’ve got more mind-blowing research coming out soon.

In the interim, check out VanillaSoft's CEO, David Hood, as he presented some of the research findings at the recent Sales Innovation Expo.