It’s the end of the quarter, you’re two weeks away from close, and your day just fell apart. Your top guy, your rock star, just came in and told you he lost that big account you had been counting on to hit your number this month. To make matters worse, this hasn’t been a great year overall and if you don’t absolutely CRUSH the next few months, the year is shot. You take your team to an off-site, you pump them up, you do some roleplay training and best practices…you GOT this!
But…do you? You thought that last quarter, and come to think of it, the quarter before that as well. Will this one be different? I mean sure, you just hired Jake (not from State Farm, he wasn’t available for some reason…) and he’s pretty much the God of sales, but are you sure that’s enough? Your board is pressing you for a concrete plan – they want you to prove to them how you’re going to meet the number. The pressure is on.
So, you start thinking…what’s really going on here? What’s broken? What levers can we pull to fix it? And how do you put it on paper for the board? As you start to think about how to increase sales next quarter, you realize you’re not even entirely sure where to look. DiscoverOrg has an amazing product that virtually sells itself and a marketing team that crushes it for our sales team, so I’ve been fortunate that we’ve grown rapidly every year in my time here. However, I can’t pretend that every quarter we’ve grown as rapidly as we wanted to. So, in those types of quarters, we looked at three things that make all the difference for us. I thought I’d share what we learned along the way in a three-part series:
- The health of our pipeline
- The performance of our messaging
- The effectiveness of our strategy in navigating sales cycles
First things first, it made sense to look at the top of the funnel….enjoy Part 1:
The Problem: Lack of a healthy pipeline
To do this you need some key metrics. We think about this in two ways – effectiveness metrics and efficiency metrics. Effectiveness metrics are generally absolute numbers. 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?” and “what percent of opportunities resulted in closed won business”. The difference being that efficiency is how well you’re utilizing your resources (often leads) and effectiveness is the output you want to get; usually sales.
- Effectiveness Metric: How many leads did you generate? 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 means some form of engagement. They have to have expressed some interest in your company, by inquiring on the web, responding to an email campaign, answering a cold call, downloading an eBook or whitepaper, met at a trade show, etc. How you define a lead is up to you, and honestly what is and is not a lead is not that important – what’s important is that you’re consistent in the definition.
- Efficiency Metric: Of those leads – people who expressed interest – what percent converted to an opportunity? Opportunities mean the prospective company has engaged with you in serious discussions about your service. Same guideline as above, what you define as an opportunity isn’t that important, as long as you’re consistent. At DiscoverOrg, we create an opportunity after a company has seen a demo of our service, which is usually our first real meeting with them.
- Efficiency Metric: How many of those opportunities turned into new deals. Especially when you can compare this across reps, you can see if there any glare points on the team, or even if it just feels too low.
- Efficiency Metric: How long did that take/what is your average sales cycle length?
Look back at your last quarter and figure out those stats. Now you know how many leads you need to generate to result in X amount of business and you’ll know how many you need to generate to hit your goal within a certain time frame.
So what happens when you find out you’re not generating enough leads? You better do something, and do it quick. After all, when marketing doesn’t deliver enough leads in October, and you have a 60 day sales cycle, you know it’s December that’s going take a hit.
And sure, the prevailing wisdom is to increase leads by doing things like content syndication, SEO optimization, social promotion, etc. Don’t get me wrong, that’s an important part of any balanced go-to-market strategy. But ALL of those things that are meant to drive inbound leads take a long time to build: your website needs to build traffic, your brand needs to build reputation. These things take months, if not years.
Luckily, you can boost leads practically overnight. Not saying it’s easy though. Here’s what you’ll need:
- The ability to send an email campaign. 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 is an incredible way to drive leads.
Experian found email marketing generates the highest ROI of any marketing activity and for every $1 spent results in $45 in return. Before you think – email doesn’t work in my industry, we’re in a “relationship driven” business – I promise you I can show you someone in your industry who IS doing it successfully. 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.
- A phone. I hope you take this for granted.
- Really good contact data. All sales and marketing campaigns fall apart when they’ve got bad data as a foundation. However you do it – hire people to research and build your database or buy it from a reputable data provider – make sure you have great data.
Once you have these things, send an email to all the prospects on your list. It should be short and focused on the problem(s) you help companies solve. Remember that the email should NOT be about you, it should speak directly to your prospect’s needs.
One of our clients, an IT consulting firm with four managing partners wearing every hat 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.
Or here’s one that just about everyone can use:
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. Sending an email alone is not enough. You have to pick up the phone, get people to answer (usually after ~20 calls, one prospect will pick up), and persuade them to do something they otherwise weren’t planning on doing. That’s what sales is.
Now think about how this can play out – this is how the math works for us:
- Email 5,000 people with a targeted message
- 3% respond, that’s a 150 leads, 50 convert to an opportunity
- Our reps follow up with 60 calls a day to the rest of the list, schedule two more qualified meetings per day, resulting in 30 more qualified opportunities (40 meetings turns into 30 opps).
- That’s 80 new opportunities generated by each rep per month. We win 25% of those, getting 20 new deals, this is worth close to $600,000 in additional revenue for us.
If you’ve tried this model and it didn’t work, I wouldn’t blame the model, I’d ask yourself at what point did the math fall apart, and go fix that. The places where this model falls apart for us are:
- If our data is bad, so the email are bouncing or our reps can’t get anyone on the phone
- If our messaging is bad.
Luckily, these are the topics of the next 2 blogs in this series….stay tuned.