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.

Published in: Sales, Business, Career
  • Njce! Thanks for sharing.
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  • Hi David, great slides! thanks for sharing. I’d like add some other great tools: 1- Outreach.io (Paid) - Send follow-up emails; 2- ReplyUp.com (Freemium) - Send follow-ups emails; 3- WhoIsVisiting.com (Paid) - Identify unknown B2B website visitors; 4- Found.ly (Paid - It's us) - Sales prospecting tool on LinkedIn; 5- Attach.io (Paid) - Viewer engagement analytics for presentations; Thanks
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  • Good deck, David. Glad to see you put 'build trust and build relationship' In there. I was just exchanging some message with Aaron Ross telling him that we need some new templates. It's too easy to figure out who does what on Linkedin these days, so the 'asking for the referral to the person who does x' is getting a little lame. His response is that it still works, but I think we can do better. We need to teach salespeople to connect with people, engage them in conversation and build relationships regardless of whether there is an immediate need or not. It's time to mix up the approach. I've been experimenting with a few things at HubSpot and think I have some breakthroughs on how to make proactive calls that are welcomed by prospects.
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  • Great presentation. Puts everything in context.
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Outbound prospecting for highly targeted lead flow

  1. 1. What’s 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
  2. 2. Isn’t David Skok a board member at HubSpot, and a huge advocate of Inbound Marketing? Whoa!
  3. 3. Inbound Marketing  Get Found!  Marketing that customers love  Using Content, Social Media, etc. to reach buyers in their purchasing journey
  4. 4. Inbound Marketing: What it’s NOT:  Cold calling  Spamming  Interrupting their favorite TV shows with Ads  Etc.
  5. 5. 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
  6. 6. When not to use Outbound Prospecting?  Low LTV  Lifetime Value of a Customer  If you can make $10k in the first year, BDR’s can work
  7. 7. The Key Elements behind “Business Model”  Cost to Acquire the Customer (CAC)  Profit from that Customer (LTV) Startup Killer There is a common problem:
  8. 8. An out of balance Business Model Monetization (LTV) Cost to Acquire a Customer (CAC) Entrepreneurs are over-optimistic
  9. 9. Sales Complexity Freemium No Touch Self-Service Light Touch Inside Sales High Touch Inside Sales Field Sales Field Sales with SE’s
  10. 10. How I assumed the two would relate
  11. 11. 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 SE’s $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)
  12. 12. The relationship is roughly exponential Clearly adding Human Touch dramatically increases costs
  13. 13. $1 $10 $100 $1,000 $10,000 $100,000 Freemium No Touch Inside Sales Field Sales Sales Complexity CAC (logarithmic) 10x 10x 10x
  14. 14. $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
  15. 15. • 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
  16. 16. 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
  17. 17. 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
  18. 18. How does Specialization work? Outbound Prospecting Inbound Lead Qualification Inbound Leads Account Executives (Closers) Customer Success or Account Managers (Farmers)
  19. 19. Outbound BDRs fit here: Outbound Prospecting Inbound Lead Qualification Account Executives (Closers) Customer Success or Account Managers (Farmers) Inbound Leads Research
  20. 20. When is it appropriate to Specialize?  As soon as you can afford to have more than two sales reps
  21. 21. 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
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 27. 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
  28. 28. 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!”
  29. 29. Aaron Ross: Breakthrough  In Desperation, I Tried An Experiment:  I’d always assumed that mass emailing executives wouldn’t work. Don’t 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.
  30. 30. 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.
  31. 31. 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.
  32. 32. 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.
  33. 33. 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
  34. 34. 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 from 3 to 25 reps (USA & UK)  Added a manager in each location  Creating an extra $2m in pipeline per ramped rep  … or about $12-$15m in qualified sales pipeline/quarter  … and still growing  many prospectors are still ramping because the team is growing so fast  Prospecting went from generating nothing to creating 40% of the new business sales pipeline.  Read the full case study here:  http://predictablerevenue.com/blog/case-study-acquia-on-the-100million-revenue-growth-track-trajectory
  35. 35. What’s Expected Of A Prospector At Acquia  300-500 outbound emails a month  100 “quick conversations” / “call connects” a month  … with all kinds of people  20 longer Discovery Calls  … with influencers/decision-makers  15 Sales Qualified Leads  … passed to and accepted by salespeople With thanks to Tim Bertrand, Acquia
  36. 36. Acquia expectations for pipeline & revenue:  Average outbound deal size: $50k in ARR (Annual Recurring Revenue)  15 SQLs / month = $750k pipeline generated per month  A lower goal than a common goal of 8-12 SQLs per month/rep  because they’re going after large accounts  Expected $55k-65k ARR per month per prospector  Or $720,000 in ARR per year per prospector.  Doing the math, with 20 prospectors after just a year  At $600k Annual Recurring Revenue per prospector  Acquia already expects to add an incremental $60 million in pipeline and $12-$15 million in Annual Recurring Revenue in 2014 at a minimum  At a 10x revenue valuation, that’s an extra $120-$150 million in equity value to investors in just 2.5 years.  And they’re planning on roughly doubling the team again (to ~40 reps) over the next 18 months, which will help them add an extra $30 million per year in ARR
  37. 37. Training, Coaching, Recognition, etc.  A big and important topic  Too long to cover here  Resources  Vorsight  Aaron Ross  TOPO  Reality Works Group  The Bridge Group  InsideSales.com
  38. 38. Metrics  Map out the process:  Call or email (Connection attempts)  Connect  Conversation  Meeting or Demo  For Each stage, measure:  Quantity  Conversion rate
  39. 39. Map out the process Connection Attempt: Call or email Connect Conversation Meeting or Demo
  40. 40. For each stage, measure Quantity and Conversion Rate Connection Attempt: Call or email Connect Conversation Meeting or Demo Quantity over time Conversion Rate (%)
  41. 41. Coaching for Problem Areas  Low Conversion rates from one step to another highlight a problem area for specific reps  Use the reps that are best at that stage to coach the reps that need help
  42. 42. Leaderboards  Public display of results triggers competitive drive  Show intermediate results as well as meetings/demos  Example supplier: Rivalry
  43. 43. Technology  There is a ton of very helpful technology  Marketing Automation (HubSpot, Marketo, etc.)  List builders (SalesLoft, InsideView)  Prospect intelligence (LinkedIn, Google, HubSpot, etc.)  Dialers  Email tracking (HubSpot Signals, YesWare, etc.)  Multi-media emails (ClearSlide, Brainshark, etc.)  VoIP phone systems that auto-update CRM
  44. 44. SalesLoft screenshot
  45. 45. Persistence  6-9 call attempts  2-3 emails or voicemails  Best practice (from Ken Krogue, InsideSales.com)
  46. 46. Resolve the age old dispute between Sales & Marketing  Sales: “Not enough leads”  Marketing: “I gave you a stack of leads, and you didn’t call any of them”  Solution: BDR function  Raw Lead  MQL (Marketing Qualified Lead) - done by Marketing  MQL  SAL (Sales Accepted Lead) - done by BDR  SAL  SQL /Opportunity - done by Acct Execs
  47. 47. MyProduct.com HOW IT WORKS DESCRIPTION Our product allows you … BUY NOW! Only $9,999.99 In a perfect world…
  48. 48. Why doesn’t this work?
  49. 49. The Buying Cycle Awareness Consideration Purchase
  50. 50. Triggers  Moving house  Movers, phones, cable TV, furniture, insurance, etc.  Starting a new software project  PaaS (Platform as a Service), Dev Tools, etc.  Need to hire a lot of new employees  Applicant Tracking System  Just lost my data in hard drive crash  Backup software/service  Read about a scary new Android smartphone virus  Anti-virus software
  51. 51. Build Trust Sell Sell First Contact First Contact Build Relationship Only OK if the buyer is in a buying cycle
  52. 52. OFTEN NECESSARY TO FIND TOPICS THAT ARE NOT RELATED TO THE SALE Build Trust Sell First Contact Build Relationship
  53. 53. Examples  Educational Events  Personalized Data that is of value to the customer  Free Software: HubSpot’s WebSite Grader  Meetings with other Execs with the same title
  54. 54. Think of your Buyer like a Bank Account You must make a Deposit before you can expect to make a Withdrawal
  55. 55. Never underestimate the important of Research  A personalized email has a far higher chance of success  If the company is public, look up the CEO’s discussion of quarterly results  Some companies can automatically send personalized emails  Based on scanning their web sites (e.g. SEO)
  56. 56. Conclusions  Valuable tool in the right circumstances  Must specialize  Invest in the right management, training, etc.  Metrics are key  Look for ways to add value before you ask for anything
  57. 57. Resources  ForEntrepreneurs.com  Interview with Aaron Ross  Vorsight