Maximizing conversion with the right lead contact strategy

In the online education, online mortgage and other related industries, leading companies have hundreds of thousands or millions of leads in their database. This begs the question: what is the contact strategy that optimizes conversions in the long-term.

Of course speed to contact is one of the biggest drivers of conversion (the source/quality of the lead is the other biggie). Jeff Soloman posts about speed to contact in the mortgage industry, observing that leads contacted in the first 15 minutes are 70% more likely to convert than leads contacted thereafter.

It is not that difficult to get even a large salesforce to call back customers quickly .

With the right lead management tool, new leads can pop up immediately on a salesperson's screen (and what salesperson does not want a hot lead). What is more of a challenge is figuring out how to contact unsold leads after that first almost-instant contact. With a predictive dialer and email marketing, you can certainly hit up unsold leads at any rate you choose - so what is the optimal rate and what is the optimal contact mix (% of email, chat, RSS, phone, etc.).

Also, what is the right content to send to the lead. Those folks who are looking to buy right away need a different message than folks who want to learn more about your school over a longer period of time. I think there is an incredible opportunity to engage potential customers in a more robust way than is done today. Rather than simply "give up on old leads" or send a non-targeted email every month or so, there has to be a way to segment these older leads and keep them continuously engaged. Take an opportunity in education - would folks interested in a culinary program, who have not yet signed up, want to see a free cooking demonstration delivered by a famous chef in their area and sponsored by the culinary school. Isn't that more likely to generate a response than  another email begging that person to sign up for school.

I have yet to see any great research on what is an optimal contact strategy - although we are certainly doing some testing on this where I work it is by no means comprehensive.

• Rob Innes speaks about Weaving Contact Strategies across Channels
• Kevin Hillstrom has an interesting post on How Many Times should you Email a Customer Each Week
• OvationBlog.com has a post talking about the need to engage customers and make them feel a part of your product before they ever talk to you live. They write: "does your customer contact strategy allow your customers to explore, engage, contribute and feel they are a part of your products, services, or company before they have made personal contact with anyone at your organization." This has an interesting implication  -  should education companies do more to simply drive traffic to their site without immediately pushing people to a call to action (e.g. filling out a lead form")

If anyone has any further thoughts please give a shout!

Comments

[Kevin Hillstrom]

Thanks for calling out the e-mail post, I appreciate it!

Ultimately, contact strategies are determined by four factors.

(1) The incremental sales generated by the contact strategy.

(2) The incremental profit generated by the contact strategy.

(3) The long-term value lost by customers opting out of communication.

When I worked at Lands' End in the early 1990s, we executed 128 separate contact strategies for a one-year period of time. We learned which strategy was most effective at driving sales, and at driving profit.

The most profitable strategy was one that had maybe 2/3 to 3/4 of the contacts. It resulted in about a 10% drop in net sales for the average customer.

Management could not accept a 10% reduction in net sales, so we did not change the contact strategy.

Same thing at Eddie Bauer, when we executed a similar test. Our CEO required that any change in contact strategy increase both sales and profit.

You will find that regardless of the mix of tools you have (RSS, E-Mail, Chat, Phone, Direct Mail, Catalogs), there is a point of over-saturation that can only be identified via well-designed experiments.

[Jason Stoffer]

Kevin, interesting insights, as in all your posts! What is unique to the online post-secondary education industry is the nature of the sale. It is a one-time sale of $15-$30K for a degree program. Unlike Land's End, there is no real opportunity to use a contact strategy to increase the lifetime value of an existing customer by increasing frequency or dollar amount per sale (or reducing opt-out % for that matter)

So the challenge we face is in new customer acquisition and determining how to find a contact strategy with potential students that will get them to make that large upfront monetary and time commitment to a degree program. To get to the answer in our industry, as you did with Eddie Bauer and Lands' End, we have to do a lot of A/B testing to figure out what the right frequency and type of contacts is for different segments of potential customers (based on degree level, degree program, lead source, etc.)

[Kevin Hillstrom]

You might look into life-table methodology. The methodology uses conditional probabilities, and you can associate costs with the conditional probabilities. You would use it like an insurance company uses it. The insurance company receives money from the customer, then has to pay out in the event of an "accident". You would do the opposite. You pay out (marketing) until there is a large, upfront monetary commitment.