So you missed your sales goal last quarter.
It seems like such a huge, complex problem with no right answers. What’s broken? How can you fix it, without messing up something else? And how do you commit to a quota for next quarter that you actually feel confident about hitting?
Yeah. It’s going to be THAT kind of quarter.
It is a complicated problem, but let’s break it down. I’m DiscoverOrg’s Senior VP of Revenue and veteran salesperson, and when people fail to meet their sales quota, I can almost always point to one of three reasons:
- An unhealthy sales pipeline
- Poor messaging
- Selling to a single point of failure
Let’s work through detailed solutions to each of these sales problems – so when next quarter rolls around, your enthusiasm won’t be a bluff.
Problem #1: Not Enough Sales Pipeline
Pipeline volume is often problem #1. Read on to see if your pipeline and conversion rates are sufficient – and what to do if they’re not.
First, let’s find some key metrics around both effectiveness and efficiency metrics. We’ll use these numbers to work backwards and determine, using your current conversion rate, how many leads you need to hit your revenue number.
- Effectiveness metrics are numbers that quantify results. They answer questions like “How many leads did we generate last quarter?” or “How long is my sales cycle?”
- Efficiency metrics are conversion rates, generally expressed as a percentage. They answer questions like “What percent of leads converted to qualified opportunities?” or “What percent of opportunities resulted in closed-won business?”
To put it another way, efficiency is how well you’re utilizing your resources (usually leads), and effectiveness is the output you want to get (usually sales).
Here are the metrics you’ll need:
1. How many leads did you generate?
Wait. First – let’s be clear about leads. A lead is not “I found the name of a person with a title and company we might sell to.” A lead has some form of engagement. A lead has expressed some interest in your company by inquiring through a web form, responding to an email campaign, answering a cold call, downloading an eBook or whitepaper, reading a few blogs, met at a trade show, etc.
How you define a lead is up to you. Honestly, the definition of a lead is not that important; what’s important is being consistent in the definition.
So how many leads did you generate in a given period of time; say, a month?
2. What percent of leads converted to opportunities?
An “opportunity” means the prospect has engaged with you in serious discussions about your service. Like the definition of a “lead,” above, what you define as an opportunity is less important than defining it consistently.
At DiscoverOrg, we create an opportunity after a prospect has completed a demo of our product, which is usually our first real meeting with them.
3. How many opportunities turned into new deals?
It’s helpful to compare this between reps: Look for hot spots and low points on the team. If this number just feels too low, pay attention: It probably is.
4. How long is your average sales cycle?
How long does the sales process take, from the time a new lead enters your CRM to the day the contract is signed?
Now, take your current lead goal and work backwards: Look back at your last quarter and figure out those stats.
- How many leads do you need to generate to result in X amount of business?
- How many do you need to generate this month to hit your goal at the end of the quarter?
What if you’re not generating enough leads to meet your quota?
That exercise may have confirmed what you already suspected: You’re not generating enough leads.
You have to do something, quick. We may be barely half-way through the year … but if marketing doesn’t deliver enough leads in October, and you have a 60 day sales cycle – December is going to be BAD.
Sure, you can eventually boost lead volume with inbound-focused strategies like content syndication, an SEO push, social promotion, etc. And that’s an important part of any balanced go-to-market strategy. But all of these activities meant to drive inbound leads take a long time – months, if not years – to build.
3 ways to boost lead volume – fast!
Luckily, you CAN boost leads practically overnight. It ain’t easy … but neither is justifying yet another bad quarter to your boss.
1. Email campaign capabilities
You don’t have to go full-blown marketing automation here, but if you don’t have something like Marketo or Hubspot in place, you can get something like ToutApp, Cadence, or Outreach.io. Email remains a great way to drive leads.
Email marketing generates the highest ROI of any marketing activity: 67% of businesses list email as their top earner, dollar for dollar.
A lot of people think, Email doesn’t work in my industry! We’re in a “relationship driven” business. Yes, it does work in your industry. We have clients executing well done email campaigns who work in every space, from complex ERP implementations to IT staffing for Fortune 1000 companies to supplying the federal government.
2. A phone
I hope you take this for granted.
3. Really good contact data.
All sales and marketing campaigns fall apart when they’re using dirty data. Whether you build or buy your prospecting data – hire people to research and build your database, or buy it from a reputable data provider – make sure you have great data.
With these three simple tools – sending an email, a phone, and good solid data – send an email to all the prospects on your list.
It should be short and focused on the problem you help companies solve. Remember that the email is NOT be about you. It should speak directly to your prospect’s needs.
One of our clients, a small IT consulting firm, used the following message in a recent email marketing campaign. The message was sent to 400 CIOs, received 37 responses, and turned three of those into new clients. Not bad for a company that typically does $1M+ engagements!
Here’s the email script they used:
You’d be surprised at the response rate on that one and how effective you can be when you’re getting referred down from a C-level exec! (Or, depending on how you react when your boss tells you to look at something, maybe you wouldn’t.)
Now for the hard part: Pick up the phone. Sending an email alone is not enough. You have to pick up the phone, get people to answer. A good rule of thumb is to plan on making about 20 calls to get one prospect on the line.
Now let’s go back to the numbers to see where you should be to meet your lead goal.
This is how the math works for us:
- Email 5,000 people with a targeted message
- Get a 3% response rate of about 150 leads
- 50 of those leads, or about 30%, convert to opportunities
- Make 60 calls a day to the rest of the list that didn’t respond, and schedule two more qualified meetings per
- day, resulting in 30 more qualified opportunities (40 meetings turns into 30 opportunities).
- That’s 80 new opportunities generated by each sales rep, per month. Multiply this by your win rate to see
- how many opportunities translate to deals. (Our win rate here is about 25%, for about 20 new deals.)
- What’s your average deal size? Multiply that by your potential deals to get a new revenue number.
The resulting number should be something you can commit to, when your boss asks to see your plan!
If you’ve tried this model and it didn’t work, don’t blame the model. Rather, ask yourself where the math fall apart. For most sales teams, things fall apart in the same places: 1.) If the data is bad, emails bounce and you can’t get anyone on the phone; 2.) If the messaging is bad, no one replies.
Now, let’s tackle that messaging problem.
Problem #2: Poorly-written messaging
Email messaging: Do it right, or don’t do it at all.
A common company fail is using one generic message for their entire audience. I see this from a dozen companies every day: “Hey, Patrick, we do IT staffing. Do you need IT staff?”
It isn’t tailored to my role, to the industry of my company, or the pain points I care about. That message isn’t really meant for me – and you can bet your bottom dollar I’m never going to respond!
Personalize your messaging
Your messaging should be tailored to your audience. And if your audience varies greatly, you’ll need to segment your message.
Segmentation requires accurate data, as well as really deep data: You’ll need to know more than just the prospect’s name, title, and the company they work for. When you layer in their industry, their company size, and their role (and not the generic “VP of IT” kind of role, but rather in the “VP of IT who handles Database Administration and we’re using MongoDB” kind of way.) This opens up a whole world for you to get creative, have fun with your messaging, and see killer response rates.
Consider the difference it makes, for example, when you know that the prospect is an Information Security vendor selling anti-virus software … and you have a list of VPs of IT.
Your message could be something like:
Sounds good, right?
… But wait, there’s a catch. That list of 10,000 VPs of IT included:
- 1,000 VPs of Information Security: Your message spoke resonated with them.
- 1,000 VPs of IT Governance, Risk, or Compliance: Your message sort of spoke to them.
- 3,000 VPs of IT Infrastructure: They might have forwarded your message to the security folks.
- 5,000 VPs of IT Application Development, Business Intelligence, Telecommunications, Asset Management, Procurement, Database Administration, etc. etc.
… Is it any wonder your response rate is low?
Let’s take that segmentation idea a step farther.
Segment your lead list
Imagine you knew your audience’s roles and responsibilities before you sent your email. And don’t stop there; imagine if you knew who used one of your competitor’s products, and what industry they’re in, and how big their company is…
You can segment and create messaging as detailed as your data!
Let’s say a portion of that list – say, 300 contacts – were VPs of IT responsible for Risk & Compliance in the healthcare industry, and furthermore were using your competitor’s product. You could get really specific with that! And you can alter the message, just slightly, for every segment of your market.
The key is focus. Like the line in the Karate Kid reboot (don’t judge me), “Your focus needs more focus.”
Segmentation is key for both sales and marketing. Your marketing department should be executing on this strategy already.
A persona-based sales workflow
It can be helpful for sales reps to have a routine established around personas. Here’s a sample workflow that I offer my sales development reps:
When I start my day, I should get specific: “Today, I’m going to focus on VPs of Information Security at pharmaceutical companies.” I know what case studies I’m going to cite, what my social proof is (competitors that I will name drop), I know the use case for my product in this industry, and – most important – I know the role I’m targeting. That’s what I focus on.
Perhaps Monday is Pharma, Tuesday is Financial Services, and Wednesday is eCommerce. Or maybe Monday is VPs of Security, and Tuesday is VPs of Compliance, and Wednesday is VPs of Application Development.
You get the picture: Focus on the focus, and the messaging tends to fall in place.
Capture the right data for email segmentation
If your data isn’t designed to allow you to do this, start now. At the very least, capture these data points. Make Job Function a requirement in your CRM. Make Industry and Technology Stack required fields, too.
Do some progressive profiling: The first time a customer fills out a form on your website – say, downloading a whitepaper – capture some basic data. The next time they fill out a form, get a little more information to better qualify the potential lead for your unique product.
If you’re not doing this right now, find a way to do it. There’s no better way to boost response rates – and therefore lead volume – than personalized, targeted messaging.
Problem #3: Selling to a Single Point of Failure
The third common pipeline problem is failing to connect with ACTUAL decision makers – or, worse, hanging all your hopes on one single, solitary decision-maker.
Prospecting to non-decision-makers
The operations specialist you met at that trade show. The marketing manager who filled out a form on your website. The intern who’s evaluating products and requested a demo. Yes, these are leads, in that they expressed interest in your product – but they have no purchasing power! They can’t approve the purchase, and they definitely can’t sign the check.
These kinds of prospects are sometimes called “NoPos” (prospects with No Power).
So why are you prospecting to them?
Deals fall apart when you sell to a single point of failure.
Here’s common scenario that foreshadows a doomed deal: Suppose you have a relationship with the prospect, a champion who has used your product before. Easy win, right?
An inbound lead comes in! It’s Jenny, a former user at a new company who loves your service. Jenny should be the easiest deal in the world – she just needs to know pricing, and she’ll do all the legwork. You give Jenny pricing. She takes it to her boss. Boss tells Jenny that’s crazy, it’s way too expensive. You, salesperson, go home to cry and watch The Bachelor. (Okay, maybe that last part was just me.)
What’s wrong with this picture? Jenny’s a great champion of your product … but she doesn’t spend all day every day trying to sell it. She’s not your buyer, and she’s not equipped to present your business case to her boss, the actual buyer.
According to a Harvard Business Review article, “A [Gartner] survey of nearly 600 B2B buyers found that fully half the people who reported a willingness to buy a product or service were NOT willing to publicly advocate for it.”
In this scenario, the salesperson’s willingness to take the easy road ended up crippling the deal. As much as Jenny loves your product, she can’t do the selling for you. She’s a single point of failure.
You HAVE to push for a meeting with the decision-maker. You have to do the work.
Relying on single-threaded relationships
Another common point of failure toward the end of the sales funnel is relying on a single relationship – AKA a potential single point of failure.
How many times have you established great rapport with a decision-maker at one of your target accounts – only to have them leave their position for another company, or go on extended vacation, or get sick, or have a change of heart, or … just stop responding?
Purchase decisions aren’t made in a vacuum. One of the best ways to keep the momentum going and avoid setbacks is to include as many decision-makers as possible, and build multi-threaded relationships within your key accounts.
If you have org charts – insight into a company’s organizational structure – it’s not usually difficult to identify potential members of the buyer committee.
If you don’t have hierarchical information, just ask your prospect – ideally during your first meeting, so you can start building those connections early in the sales cycle:
- “What other stakeholders would be interested in this?”
- “Do you have a superior – or direct reports – who would have an opinion? What’s their contact information, and I’ll be sure to include them.”
- “Who needs to actually sign off on this deal?”
Take a look at your target accounts and see if there are opportunities to loop in more points of contact.
Just in case your buyer buddy takes an extended sabbatical to Tahiti, you’ll need someone who’s still invested in your product. Those warm, tropical beaches are lovely, but you’ll never get there yourself if you miss your quota again.
So crunch some numbers and use your conversion rate to figure out how many leads you need to generate to hit your sales quota. Personalize your messaging for your specific buyer. And when you finally connect with your prospect, make sure everyone is included in the conversation. Focus on these three key areas will fix most of the leaks in your sales funnel.
Of course, an abundance of great data on your key accounts and prospects doesn’t hurt, either.