Carrying out regular Buyer Feedback Surveys has become an important part of the Approved Index set up. They not only allow us to feed back comments and ratings to our suppliers but also provide heaps of interesting data. This data can provide all sorts of insights ranging from how effective we are at matching buyers and suppliers through to revelations about the sales process itself.
Now we’ve had a change to do a little digging around in that data we have a somewhat surprising conclusion to share.
The commonly held positon is that speed of response is overwhelmingly the most important factor in closing sales leads (see this, this and this). That makes sense on the face of things – after all, contacting a prospective buyer while they’re still thinking about their enquiry is when they’re going to be most receptive to your pitch – and we advise our suppliers to contact leads quickly as matter of habit.
Nevertheless, the figures that came out of our recent survey hint that in the current climate buyers are tending to wait longer – until all the quotes are in – before making a decision on who to purchase from.
Let’s get to the data…
Background to the Survey
We asked 18,000 recent Approved Index buyers to provide feedback on each of the suppliers we put them in touch with. When a buyer makes a request for quotes on one of our websites we’ll get between 1 and 6 suppliers to quote for them depending on the product/service category, the buyer’s region and the timing of the request.
If we call each instance of a supplier getting in touch with a buyer an ‘opportunity’ then the survey responses gave us 1,509 such opportunities to analyse.
For each opportunity the buyer was invited to tell us:
- Whether the opportunity resulted in a sale;
- Whether the supplier responded promptly or slowly to their enquiry
- Whether the quote they received was of good quality, merely price appropriate or of low quality/irrelevant.
Of concern to us here is how speed of response and quality of quote provided affect the purchase rate and which factor has the greatest impact.
Firstly, let’s look at speed of response to a buyer’s enquiry:
To interpret, in opportunities where the response to the request for quotes was prompt there was a 34.8% close rate. Where the response was slow the rate dropped to 10.2%.
This is roughly in line with what conventional wisdom tells us.
That is, until you consider that a close rate of 10% is pretty high for companies who are slow to get in touch with sales leads. In fact, that’s much higher than the conventional story would lead you to predict – especially when you consider that buyers are under no obligation to purchase from Approved Index suppliers and are probably also getting quotes from other companies at the same time.
Why are buyers following through with purchases from these tardy companies? Surely this is the age where we expect speedy service from every business from the coffee shop to our ISPs – what can possibly be causing these buyers to wait?
When we look at the impact of quality of quote on purchase rate the story gets clearer:
So, when buyers receive a good quality quote from a supplier they’re making a purchase 44.8% of the time. When the quote is merely appropriate they’re purchasing 23.3% of the time. When they consider the quote to be of low quality that close rate drops to a tiny 5.2%.
Our data suggests that while responding quickly to a lead can more than triple your chances of closing, the difference between providing a low quality quote and a good quality quote can boost your conversion rates by as much as 9 times. The quality of the quote provided is much more important a factor when it comes to close rates and responding slowly to a lead won’t necessarily destroy your chances of closing. Often, buyers will wait.
This conclusion is reinforced when we look at the data from another angle – the breakdown of opportunities into those which led to purchases and those which led to non-purchases:
So while 90.63% of opportunities which led to purchases involved a prompt response, 93.36% involved a good quality or price appropriate quote.
Similarly, while slow contact seemed to be a factor in 23.98% of non-purchases, a low quality quote factored in 30.85%.
I would conjecture that the prevailing wisdom – that speed is the most critical factor in closing sales leads – came into vogue during the boom times. Times though have changed. In the current climate, as the UK repeatedly slips in and out of recession, buyers are more worried about their businesses, less prone to taking risks and keener to hold out for a good deal than getting solutions implemented quickly.
The Buyer Feedback Survey wasn’t designed to gather data on this issue – this is something which struck me as I pivoted and charted the results. Obviously there is a bias for a buyer towards rating a quote that ultimately led to a purcahse as ‘good quality’ to reinforce your purchasing decision. Similarly, the judgement of whether a supplier responded ‘promptly’ or ‘slowly’ is subjective and the exact same response time could be interpreted in different ways by different buyers.
Nevertheless, the results are, I think, reason to give pause for thought to those who until now haven’t questioned the ‘speed is everything’ approach to sales leads.
This is a topic which I feel warrants further investigation in recessionary times.
Whether you’re looking for franking machine suppliers or gps fleet tracking, Approved Index companies will respond to your enquiries promptly and with a good quality quote (in the vast majority of cases!)