Outbound prospecting for highly targeted lead flow
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This presentation described how and when outbound prospecting (Cold Calling 2.0) can work to provide a predictable flow of leads from highly targeted prospects.
Transcript of Outbound prospecting for highly targeted lead flow
- Whats a Business Development Rep? Sometimes also called: Sales Development Rep Market Development Rep Function: Outbound Prospecting Highly specialized Only does outbound Cold Calling 2.0
- Isnt David Skok a board member at HubSpot, and a huge advocate of Inbound Marketing? Whoa!
- Inbound Marketing Get Found! Marketing that customers love Using Content, Social Media, etc. to reach buyers in their purchasing journey
- Inbound Marketing: What its NOT: Cold calling Spamming Interrupting their favorite TV shows with Ads Etc.
- So why use Outbound Prospecting? Marketing is not producing enough leads It can take time for Inbound Marketing to ramp up Marketing is not producing the right kind of leads You have a clear set of target customers Biggest accounts Most likely to buy
- When not to use Outbound Prospecting? Low LTV Lifetime Value of a Customer If you can make $10k in the first year, BDRs can work
- The Key Elements behind Business Model Cost to Acquire the Customer (CAC) Profit from that Customer (LTV) Startup Killer There is a common problem:
- An out of balance Business Model Monetization (LTV) Cost to Acquire a Customer (CAC) Entrepreneurs are over-optimistic
- Sales Complexity Freemium No Touch Self-Service Light Touch Inside Sales High Touch Inside Sales Field Sales Field Sales with SEs
- How I assumed the two would relate
- A rough estimate of CAC versus Sales Complexity Freemium No Touch Self-Service Light Touch Inside Sales High Touch Inside Sales Field Sales Field Sales with SEs $0- $10 $50 $200 $1,000 - $2,000 $3,000 - $8,000 $25,000 $75,000 $75,000 $200,000 Rough Estimates of Cost of Customer Acquisition (CAC)
- The relationship is roughly exponential Clearly adding Human Touch dramatically increases costs
- $1 $10 $100 $1,000 $10,000 $100,000 Freemium No Touch Inside Sales Field Sales Sales Complexity CAC (logarithmic) 10x 10x 10x
- $1 $10 $100 $1,000 $10,000 $100,000 $1,000,000 Freemium No Touch Inside Sales Channel Field Sales Sales Complexity Value / Pain / Urgency = LTV (logarithmic) High CAC, requires high scores for: Value, Pain, Urgency Unprofitable: LTV < CAC
- Throughout history, specialization has been the breakthrough to better techniques. It allows people to excel at a few specific tasks. Sales is no exception Ken Krogue, Inside Sales.com
- Why Specialize? Lack of Motivation Experienced sales people hate to prospect and are usually terrible at it Given the option to do Prospecting, Closing or Farming, sales people will gravitate to the things they like most Lack of Focus Even if they are good at it, as soon as they generate some pipeline, they will be too busy to continue Specialized metrics are required to gain visibility into what is working, and what is not
- Why Specialize? Converting a lead to an opportunity requires its own playbook and subsequent training and coaching Sales development is fundamentally different than the rest of the sales cycle. The science of connecting with someone is hard enough when you connect, you have a few seconds to generate interest and a couple minutes to handle objections and close for a meeting. Effective sales development requires full-time management, specific training, and constant coaching. Courtesy of TOPO blog
- How does Specialization work? Outbound Prospecting Inbound Lead Qualification Inbound Leads Account Executives (Closers) Customer Success or Account Managers (Farmers)
- Outbound BDRs fit here: Outbound Prospecting Inbound Lead Qualification Account Executives (Closers) Customer Success or Account Managers (Farmers) Inbound Leads Research
- When is it appropriate to Specialize? As soon as you can afford to have more than two sales reps
- Who should you hire? - Company 1 If I have 3 similar candidates (which at this level happens all the time) If one of them played college sports they will win Someone who is a good listener, challenger They show up prepared They ask great questions And can tell a story
- Who should you hire? - Company 2 We hire right out of college We recruit smart kids from good colleges Our best luck has been hiring kids with business degree backgrounds - ie: Bentley, Babson, Bryant But honestly, any smart, very curious, passionate and hard working, recent grad will do
- Who should you hire? - Company 3 Hungry, creative and thick skinned It's all about getting someone's attention so being creative with your voicemails and emails is important You will get a lot of "no" so you need thick skin and a short memory
- How much should you expect to pay? Company 2 40K base salary 8K annual bonus - 2K per quarter with the ability to over achieve Bridge Group Approx. $47,000 in base $71,600 in total comp Lower or higher based on location or target market E.g. in Silicon Valley, SDRs with significant experience calling enterprise accounts and decision makers can make over $100K in annual target compensation
- What results can you expect to see? Measured in Demos or Meetings: Company No. 1 20 per month Company No. 3 8 per month Other Data I have seen 15-30 per month
- What is the Cost of each Meeting/Demo? 20 leads per BDR per month BDR Cost $71k total cost Plus 40% overheads Equals $99k annually Cost per meeting: $414
- How long will it take for them to ramp up? Company No 1. 2-4 weeks to start being productive 2-3 months to be fully ramped up After about 6 months it's possible that they are ready for inside sales
- Lessons learned from Aaron Ross Aaron Ross set up this function at Salesforce.com Lesson One: Finding the right person to call is the hardest part If I could find the right person, I could usually have a productive business conversation with them. It was just a pain in the ass to find them, especially in the F5000 size companies!
- Aaron Ross: Breakthrough In Desperation, I Tried An Experiment: Id always assumed that mass emailing executives wouldnt work. Dont I need to carefully craft each email to them to make it personal? I wrote one email that was a classic salesy cold calling letter: Do you have these challenges? X, Y Z. I also wrote a totally short and sweet different email simply asking for a referral to the right person at the company.
- Aaron Ross: Breakthrough On a Friday afternoon, I sent two mass emails from Salesforce.com: 100 of the classic salesy emails to F5000 executives, 100 of the short and sweet emails to the same kind of list.
- Aaron Ross: Breakthrough Out of 200 emails I sent, I had 10 responses back! Response rate for the salesy email: 0%. Response rate for the short and sweet email: 10%. Again, these were from C-level and VP-level executives at large companies. At least five of the emails I received from the short and sweet campaign were positive referring me to other people in the organization as the best person for a conversation about sales force automation.
- Aaron Ross: Breakthrough I discovered that mass emailing C-level F5000 executives, with specific kinds of emails, can generate 9%+ response rates Those high response rates (8-10% or more) from high-level executives have held true year after year, even with my current clients, seven years later.
- Aaron Ross: Breakthrough Use a referral/researching approach rather than cold calling people directly. You can generate quality referrals from cold contacts who have never heard of you via short and sweet email templates NEVER SELL in these request for referral emails
- Case Study: Acquia Metrics after One Year Created extra $6 million in Sales Qualified Leads Closed $3 million in revenue already from the first 18 months of pipeline generation (which will multiply fast now that the flywheel is rolling) Grew prospecting team