Why Chatbots are the Future of Lead Response with Dr. James Oldroyd
Overview: Billy Bateman and professor James Oldroyd discuss how response times affect a lead, how bots differ from other forms of communication and the future of bots.
Guest: James Oldroyd- Professor James Oldroyd is an associate professor of Strategy at the Marriott School of Management, Brigham Young University and the Ford Motor/Richard Cook Research Fellow. He received his Ph.D. from the Kellogg School of Management at Northwestern University in 2007. He was an associate professor of management at SKK-GSB in Seoul, South Korea for five years and an assistant professor of international business at The Ohio State University for three years. His research explores the intersection of networks and knowledge flows. This work has been published in outlets such as the Academy of Management Review, Organization Science and Harvard Business Review. He teaches courses on strategy, strategy implementation, international business, and negotiations to undergraduates, MBAs, and executives. In addition, to teaching at SKK, OSU and BYU, he has taught at the Indian School of Business and the University of North Carolina. He is actively involved in delivering custom leadership training courses for numerous companies including Samsung, Doosan, SK, Quintiles, and insidesales.
Billy: All right everybody, welcome to the show today, today I have the pleasure of being joined by Dr. James Oldroyd, strategy professor at BYU. Dr. Oldroyd thanks for joining us.
Dr. Oldroyd: Yeah, thanks, great to be with you.
Billy: So today we wanted to talk about, you did the lead response study a few years ago and we were talking about, how that can be adapted from the phone to live chat and BOTS, so that’s what we’re going to dig into, but before we get into that, you just tell us a little bit about yourself and what your research focus is on there at BYU?
Dr. Oldroyd: Thanks, sure, so, dr. James Oldroyd, I have been at BYU for five years, before you I was at Ohio State University as a professor there and then, I spent five years in Korea at Sungkyunkwan University, which is university-owned by Samsung and so my research focuses on how people share knowledge and disseminate knowledge and how time and cadence and those things matter in that, so the stuff I’ve done in the cells space, research done in the South space is focused in on mostly looking at how rapid response, tends to be that like the most important if you had one principal to look at the sales process, responding rapidly to customers, can you know be probably the most important principle you could bringing into the sales process.
Billy: Okay and then before we get it dig in on that, if we were going to look you up on social and do a little snooping and try to figure out who Dr. Oldroyd is, what is something we wouldn’t figure out by looking at your social profiles?
Dr. Oldroyd: I think so one of the things you would not figure out, so I lived a year in Israel ,when I was getting an undergrad in 1995 to 96 and that’s when these; as they caught the Second Intifada started, which was the Palestinian fighting against Israel and I almost died in a bus bomb, so there’s one thing that wouldn’t show up there, but we I just happened to miss the bus I was supposed to get on and that bus actually there was a bus bomb on that.
Billy: Wow well we’re glad you missed.
Dr. Oldroyd: Yeah, sometimes it’s good to be late.
Billy: Yeah, except in sales.
Dr. Oldroyd: That’s right.
Billy: Okay man, well let’s dig into it, so will you give us just a brief overview of the lead response study you did in relation to two web forms and calling people back over the phone?
Dr. Oldroyd: Yeah, absolutely, so a decade ago, Dave Elkington who was CEO at Sale cells reached out to me and said; I need you to snoop around in the academic literature and see if you can find anything done on you know how long leads last; so I started exploring around a bit and couldn’t find anything.
So, I reached back out and said- I don’t see anything there, he said there’s really nothing, I said do you have any data and he said yes, and so we began about a four-year detailed study, of you know how long does a lead last, so if somebody you know a Webley, the web form, somebody fills that out how long until that lead is cold and what we quickly realized was that, the data was unbelievable or the results were unbelievably biased towards rapid response.
And so, when I first did it, I was looking at hour increments, what if you respond in the first hour versus the second hour, the third hour and the results were so profound, that I was, you know the first hour was just dominated. And so then, I could break it up into five minute increments and that first five minutes was you know three thousand times more effective than a few minutes later; and so, we quickly realized that this wasn’t just you know a linear decline, this was an exponential decline in the value of the lead, so much so that that first second is probably you know the most critical thing.
And you know I often these leads were, you know so say I went to a place to find a mortgage loan, I might fill out some information and that would be sent to multiple providers and you know we don’t, if we liken it to the physical space, it would be like walking into a store and having like five storefronts or you know five different store vendors all in the same spot and if I say I need a shirt, whoever responds to me most quickly, is probably going to get the sale; is the exact same thing we found in in the online space.
But I think the reason why it’s been so successful and looked at so many times and quoted so many times, is because companies just weren’t good at it, they are just works really poor in responding to their to the leads as they came in and you know the average rate, the average duration was twenty four hours later. Well, obviously, it doesn’t work.
Billy: Yeah, I think it’s probably least you would find, it’s even more skewed towards rapid response ten years for from right now…
Dr. Oldroyd: And you know, people were somewhat tolerant then, I don’t think any are tolerant now.
Billy: Yeah, yeah, I know, I think its people just want answers and they want them right now. So that brings us to why we start chatting with you, is you know, obviously we use BOTs and live chat for our customers and sales and marketing and that allows you to respond almost instantaneously to people and want to get your thoughts on and how that changes things and how BOTS, can join with people?
Dr. Oldroyd: Yeah, it’s a great question, you know I think what’s so interesting about it is, it even responds before I initiate, you know I mean so as a customer, I get on there and the BOT fires and you started a conversation even if the customers not into a conversation yet. So, you know it’s almost pre rapid-response, so you’re responding even before the queries there, I think it’s profound, it’s going to have profound impact and it’s a; you can’t do that with the phone, I can’t do that with an email, I think BOT is really the only mechanism, I have to engage the customer before the customer even engages me.
Dr. Oldroyd: And so, as you know as we evolved and BOTS get smarter and smarter and people get more and more familiar in using them and comfortable using them, I think that like you said this is going to be big mechanism, where companies respond rapidly to their customers or to their clients and they can do it even before you know, it’s the question is asked even before the customer has a question; what can I do to help you, I’m here I’m standing next to you, which you know if you go to Nordstrom, the reason why people love shopping in Nordstrom, as you walk in the store and somebody’s there, before you even have a question.
They’re just standing there, hey, I’m right here, if you have a question just let me know; and so I think that’s one the other thing I love about BOTS, when they fire and you know said I know somebody’s standing there, that’s easy to do when I’m Nordstrom and I’ve got lots of resources, but what if I’m a little stuff, a little shop and I might have five customers in my store already, how do I signal to the client that I care about them, that I’m there and with a BOT, by the BOT can fire and they can actually, they can actually engage the customers quickly enough, make that customer feels that they’re getting a high-touch service, like they would you know I again I’ll say Nordstrom or any store that really values customer service.
Billy: Yeah, I’m with you on the BOTS and another thing is I think they bring, you know, Salesforce to the study on customers want a whole experience, when they deal with any brand, really buy anything, they’re conscientious of everything being linked together, if I’ve talked to somebody on the phone, whether I chatting on live chat or with the BOT, where I’m on your website, they don’t want to have to repeat themselves and I think the BOT, really plays into that, because you can engage them right off the that and tailor that experience to what they need and then bring in people as you need it or as you have the resource to do?
Dr. Oldroyd: Exactly and so you’re engaging them, you know, I liken it to you know, in the old days you’d walk into a mom-and-pop store and the doorbell with ding or a door-to-door trying with ding, when you walked in and sometimes they weren’t even in this, you know you couldn’t see them in the store, but when that happened, you knew that; you knew they knew you were there. Yeah, so I think a BOT firing is the same thing in the digital space, it’s saying I know you’re here, let’s start a conversation and let’s move you along; and then, when you’re ready to jump over to a person it’s an easy transitional.
Billy: Yeah, so how do you think, how do you think science and academic research are going to influence how we use BOTS as the space becomes more mature?
Dr. Oldroyd: You know, it’s there’s so much work to do in trying to find out what optimization looks like, trying to find out what really is going to work in this space and it’s a bit like the Wild West right now, there’s lots of lots of people are saying do this and you know and lots of you know, if you look up any part of the sales funnel, there’ll be some advice on what to do, but the reality is there’s been almost no systematic research looking at chat across the entire sales funnel.
And so I think, it’s it there’s just so much for us to dig in and learn and figure out, you know; so right now, everything’s focused on metrics around the BOT itself, you know are there people engaging with it, is it getting it, if my acquiring emails from it, but not very little, very little research, if any has been done looking at downstream effects; unlike you suggested earlier, customers don’t care, they’re not thinking, well I want a BOT experience, they want they’re trying to do so with the company and so I think the BOT going to have a profound impact on those downstream events, even if they’re not still engaged in the BOT or with the BOT.
And so, it’s good, I think science as we figure out what the entire funnel is going to look like and how BOTs are impacting across the funnel, is one of the key areas that we still have to explore. The other one is, we really don’t know just the messaging or the look and feel, there’s just so many different elements about BOT that we don’t know. So, we know a few things, we know people don’t like to be tricked and the thinking, they’re talking with somebody, when they’re talking you know with it with AI, that’s we know that, we know people like rapid; they like rapid response, you know that, but there’s just so many questions that we don’t know.
And the beauty of the BOTs is that it gives us a good way to, it all codified, so the analysis is we can do it easily and it’s just a matter of linking it and looking across the different aspects of the sales funnel.
Billy: Yeah, so what, where do you think people should, you know if we’re looking at BOT optimization which we do with chat funnels and you know we’re looking at specific use cases for clients typically, you know like how do we more efficiently book demos or engage people in live chat or have a good chat that leads to next steps with the sales agents, what are the questions that are top of mind for you, that you think people need to be tackling with BOTS, when they’re trying to optimize them, where would you suggest people start as computer, I know I’m a BB marketer or sales manager, I’m going to put a BOT on the site, for you what’s interesting, where would you suggest they start?
Dr. Oldroyd: So, I think there’s two principles are; if we know two principles in sales, its number one rapid response matters, I think number two is start at the top of the funnel. So, if you look at you know trying to get someone to engage with the BOT, that should be the first question that you need company look at; and try to figure out, because if the BOTs firing and nobody’s interacting with it, then it’s everything else is irrelevant. So, the very first question and probably the most important question for companies to think about is, how do I get customers to engage with my BOT, that’s assuming that the customers want to engage.
I could be that this isn’t the right mode of communication, but assuming that it’s, that it would be the right mode, how do I get that and that looks that’s going to look at messaging, that’s going to look at when do we witness the BOT fire, what type of a BOT it is, you know so those are the kind of the elements that I would suggest anyone look at, when they’re just dabbling with box.
Billy: Yeah, I’d agree in that, you got to start at the top of the funnel, but I would take it one step further to really have a use case, where you look at the top of the funnel, but make sure if somebody got to the bottom of that BOT funnel, it actually would have a measurable result for you, such as you know you’re booking a meeting that is for sales or maybe they’re buying something through the BOT you know, so we can say like; hey, are we actually going to make more money or save money by using the BOT, so…
Dr. Oldroyd: That’s right, I agree.
Billy: Well, I’m Dr. Oldroyd, is there anything I didn’t ask you that I should have asked you?
Dr. Oldroyd: Yeah, so one thing, if we look at what’s oh, by the way when you look at any research study that’s been done, looking at how people communicate with their clients or customers, like you know a lot will be done on email and phone and you know, other communication channels and BOTS will be about half that, because it’s we’re really just starting to figure this out.
But I think the future, you know what everything that we’ve done so far with BOTS has been focused on the sales side, so it’s the customer or the company engaging with the client and I think one thing we’ll see in the next five years are actually buyer BOTS, so you know I could, as a customer I could hire a BOT to represent me, to proactively go do something on my behalf.
Yeah, so it maybe I’m interested in getting a car or purchasing a car; to activate a buyer BOT, which would go figure out which car I should buy and actually engage in that buying process. So, right everything we’ve done has been on the sales side, I think in the next five years, we’ll see a shift towards buy-side as well, which is a whole another, you know we haven’t even gone there. So, yeah, this is just a really fun space to be and be thinking about, because you know BOTS, I think we’re going to just see so much in the future.
Billy: That it that is interesting to have a BOT that would go and like if I’m going to buy a new truck, it would go and say you know I’d put in like this is my requirements, this is my budget, go scour the internet and found and find you know the best deal for me, that would be amazing.
Dr. Oldroyd: So, I people will see that I mean, I don’t know but we’ll get to sophisticated in the next five years, but we’ll start to see buying beside BOTS, as well as you know we already have good sell side, modify side, right you know come into being in the next few years.
Billy: Alright, well, thank you Dr. Oldroyd for hopping on and taking a few minutes to talk to us, if people want to continue the conversation with you, where can they reach out?
Dr. Oldroyd: Yeah, so James Oldroyd at gmail.com, is my email address, find me on LinkedIn as well and I’d be happy to talk with you further.
Billy: Okay, thanks Dr. Oldroyd and we’ll chat later.
Dr. Oldroyd: Thanks Billy take care.