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by
Aaron Ross
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April 25 - May 3, 2022
Building a Sales Machine that creates ongoing, predictable revenue takes: Predictable Lead Generation, the most important thing for creating predictable revenue. A Sales Development Team that bridges the chasm between marketing and sales. Consistent Sales Systems, because without consistency you have no predictability.
In high – productivity sales organizations, salespeople do not cause customer acquisition growth they fulfill it.
In other words, “working harder” translated usually means: “What we are doing isn’t working, so do more of it!”
It’s true that you need great salespeople to close customers, but the better your lead generation is, the less dependent you are on the quality of your salespeople and sales process. Better lead generation = more margin for sales error.
They won’t generate enough leads on their own – at least not enough to feed themselves. (Okay, sometimes, some salespeople will. Some people win the lottery, too.) Here’s why: Experienced salespeople are terrible at prospecting. Experienced salespeople hate to prospect. Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect. It’s not sustainable.
People tend to do more of what is not working rather than stepping back, taking a breather, and trying to figure out a new approach.
Do your executive team and board know how much new (qualified) pipeline the company needs to generate per month? (This is the second most important metric to track, right after closed business.) Is the “new pipeline generated per month” number tracked at the board level? Are there a common language, and common definitions, for “prospects,” “leads” and “opportunities”? One of the biggest problems is usually mis-communication and misunderstanding of terms and metrics between executives and directors.
What are your biggest or most recent failures? What is it about them that you can be grateful for? Can you anticipate how you will benefit by getting through your current challenges?
Instead, the inside sales team of outbound prospectors had a single mission: to generate (but not by cold calling; see Chapter 2) new qualified sales opportunities from cold companies (ones at which we had no prior activity or interest) and passing these qualified opportunities to quota-carrying salespeople to close.
The team only contacted cold new business accounts and past accounts which had been cold for at least six months. The team didn’t receive any new inbound leads generated by word-of-mouth or by marketing (these leads went specifically to a separate Market Response team to qualify and pass to Account Executives).
Your sales results are only scalable to the extent the CEO and executives are designed out of the process. Too many companies are dependent on the CEO or VP Sales for selling. How can you make the sales team and results independent of your direct help, except for coaching them?
Lack of money is a common excuse for not being creative.
The point here is that when you’re low on resources, by having a clear objective and looking at it as an interesting challenge, you can force yourself (and your employees) to GET CREATIVE. Constraints often lead to more creativity from both yourself and your people. Don’t let so-called “reality” stop you!
The biggest bottleneck in prospecting into companies that have more than a few executives isn’t getting to the decision-maker/influencer/point person… It’s finding them in the first place!
Mass emailing C-suite Fortune 5000 executives, with specific kinds of emails, can generate 9%+ response rates. Those high response rates (7-9% or more) from high-level executives have held true year after year, even with my current clients.
The tipping point of the Cold Calling 2.0 process was born: sending mass emails to high-level executives to ask for referrals to the best person in their organization for a first conversation.
Three key principles to developing a team successfully include: No cold calling! Prospect into cold accounts with new methods, rather than surprising people on the phone or trying to negotiate around gatekeepers. For example, use simple emails to generate referrals to the right people, who then expect (and often welcome) your call. A focus on results, not activities! That means that dials and calls per day, or even appointments set, are much less interesting or even important. Rather, track metrics such as qualification calls per day or week, and qualified opportunities per month. Calls per
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Making the field salespeople do cold calls means having your highest-cost (per hour) sales resource perform the lowest-value (per hour) activity.
Will the pipeline turn into revenue? In other words: Will the deals close? Can junior salespeople do this too; that is, can it scale?
Prospecting into accounts of marginal potential is the most common waste of time by Sales Development Reps and companies. Spend serious time on identifying and clarifying your Ideal Customer Profile. Define what companies are the most similar to the top 5-10% of your customers, defined as the ones likeliest to purchase for the most revenue, and develop focused target lists based on these tight criteria.
Whether they are inside or field-based, there are three problems with expecting your Account Executives (quota-carrying salespeople) to be the ones to do all the work developing new accounts: They don’t like to do it. They usually aren’t any good at it (or are even terrible at it). It’s a poor use of company resources to use the most expensive sales talent to do lower-value work.
Where and When Account Executives Should Prospect Here are the rules of thumb about where Account Executives should spend their precious time prospecting: A short, targeted “Top 5-25” list of vital accounts or channel partners. Their current customer base. The point is to focus your highest value people on the low-volume but high- value activities (building relationships at key accounts), and to specialize other roles and sales reps to take over low-value yet high-volume activities (prospecting into untargeted cold accounts).
What’s expected of a prospector at Acquia Acquia expects each prospector to do: 300-500 outbound emails per month 100 “quick conversations”/“call connects” per month with all kinds of people 20 longer Discovery Calls with influencers/decision-makers 15 Sales Qualified Leads (SQLs) passed to and accepted by salespeople And they expect that activity funnel to produce, in pipeline and revenue… Average outbound deal size of $50,000 in Annual Recurring Revenue (ARR); 15 SQLs/month = $750K pipeline generated per month (This goal is lower than a more standard goal of 8-12 SQLs per month per
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The faster you get started, the faster you learn what it takes to get results.
They brought in experts who’d done it before, rather than trying to recreate the wheel. They knew exactly what to do and when to do it, at every step, without wasting time or money.
and the way the math works out with prospectors, the bigger the deals you can find, the more total sales you’ll generate. As a rule of thumb, at Predictable Revenue we generally recommend that companies average the top 10%-20% of their customer base or deal sizes to gauge the kind of deals and companies to target with outbound prospecting.
To begin implementing the Cold Calling 2.0 system, you should know that: At least one person is 100% dedicated to prospecting (or you intend to have this person). Yes, you can start part-time, but it will be hard to get significant results until you have someone totally committed to it. You have some kind of sales system that lets your sales team share and manage their sales contacts and accounts. Salesforce.com is still the best system (in my humble though admittedly biased opinion) but what’s more important is that you have something beyond spreadsheets, whiteboards and email. Your prospects
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If you want to take an important step towards turning your sales organization into a sales machine, start by letting your Account Executives (the sales reps closing business) focus on what they do best: work active sales cycles and close. Let a different role, Sales Development Reps, focus on generating new qualified opportunities for your Account Executives.
As a first step, dedicate a role (whether you begin with one person or a whole team) to ONLY doing outbound prospecting activities. Break it off from inbound lead qualification and from closing.
Implement a Sales Development function to prospect for new clients to ensure a predictable, sustainable supply of qualified leads for the field and/or telesales teams, and a Market Response function to qualify the leads that come in via your website, through the telephone, or other “inbound” channels.
One Sales Development Rep typically can support a maximum of 2-5 quota- carrying Account Executives.
it’s possible you could have even a 1-to-1 ratio or 2-to-1 Sales Development Reps per Account Executive and still be VERY profitable.
However, Account Executive closers shouldn’t spend their time making cold calls. They should focus on higher-potential sources of business: a small list of targeted accounts from which they can build relationships; a list of their current clients; plus a list of their own past dead opportunities.
Market Response Reps qualify incoming leads that reach the company through the website or phone (usually driven either by internet search, word- of-mouth or marketing programs), and route qualified opportunities to the appropriate quota-carrying salesperson.
A rule of thumb is that for every 400 leads per month that require human attention, a company needs one Market Response Representative.
By taking unqualified opportunities out of the pipeline early in the sales cycle, Market Response determines which accounts will be followed up by the sales force and thereby paves the way for increased close rates by the field and telesales reps, who spend their time only on pre-qualified opportunities.
The roles are very different – inbound reps receive leads to work to qualify, while outbound reps initiate calls and emails – and it’s very challenging for a rep to switch between the two mindsets throughout the day. The Market Response Reps become experts at efficiently qualifying inbound and marketing-generated leads, and the Sales Development team only prospects for incremental business at accounts that need to be pursued, where there is no active or pre-existing interest.
It was this kind of specialization that was important to helping achieve massive breakthroughs in results.
And CEOs, remember: people follow your example. The more you live in your system, the more your people will use it.
Here is the source your PREDICTABLE REVENUE comes from: predictable lead generation.
For b2b companies, the most predictable source of leads can be outbound sales prospecting. Even as the world gets busier and busier, and people drown in email, social and phone messages… outbound still works.
Revenue Predictability = The Funnel + Average Deal Size + Time
In addition to the activities and results in the funnel, you also have to know how long things take in order to have more predictability.
My advice: Put new reps through some kind of training program that has them working in other parts of your company first, talking to customers, before they go on active sale duty. This will make them much more effective salespeople and actually ramp them faster. Slow down to speed up!
How long does it take for a prospector to generate a qualified opportunity? How long does it take for those opportunities to close? Are small ones faster than large ones? What are some imperfect but useful rules of thumb for you?
Prospecting cycle length: Measure the time between (a) when the prospect first responds to a campaign to (b) when a quality opportunity is created or qualified; this means the quota-carrying Account Executive has re-qualified and accepted the opportunity that the prospector passed over. Incidentally, my rule of thumb is that it takes 2-4 weeks, on average, to qualify a new opportunity from an initial response. Sales cycle length: I like to measure the time from (a) when the opportunity was created or qualified to (b) when it closed. If you have trouble measuring this, just sit down with your
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The single most important thing you can do to make this program effective is to spend time getting clear on who your ideal customers are – both the kinds of accounts and the types of contacts in them. This is where most companies fall short from the start – by targeting the wrong prospects, at the wrong levels, going after too many kinds of companies, or not speaking in “their language”.
