Today I’m going to show you the equation that determines outbound success, or failure as it may be.
As sellers today we have more data than ever, but we’re often not sure what to do with it.
Once you understand the three parts of this equation you’ll be able to make targeted changes to your outbound campaigns and track whether or not these changes are having the desired impact.
Most people over complicate this exercise. We’re not going to do that today. The equation is simply:
Activities X Connect Rate X Conversion Rate = Meetings Booked
It’s useful for three things:
Understanding baseline performance and forecasting
Comparing different campaigns and rep performance
Evaluating changes to tech stack or processes
First, let's break down the three main components of the equation:
Activities is simply the number of activities executed by a rep. This is typically:
LinkedIn Connection Requests
Total these up and you have the first part of the equation.
Connect rate is the rate at which your activities lead to connects with a prospect. To calculate connect rate, take the number of connects, that is number of email replies, connects from calls and LinkedIn Connection Accepted and divide by the number of activities it took to generate these.
Here’s an example:
Connect Rate: 960/8550 = 0.112
This is the rate at which connects become meetings booked. We divide the number of meetings booked by the total number of connects. Let’s take the same data from above - and add meetings booked to it so we can calculate our conversion rate.
Conversion Rate: 64/960 = 0.067
Now our total equation looks like this:
Activities X Connect Rate X Conversion Rate = Meetings booked
8550 X 0.112 X 0.067 = 64
So now we know how the equation is created, let’s have a look at how we can use this data.
Understanding Baseline Performance + Forecasting
This equation paints a clear picture of the current state of our outbound engine. It gives us the ability to understand our baseline performance level and also forecast out what would be required in order to generate more meetings.
Let’s assume the data we walked through above is the output across a quarter. That means we’re currently booking 64 meetings per quarter. If we want to bump this up to 80 in order to hit this year's sales targets, we can reverse engineer how we might make that possible.
Based on our equation there are three levers we could pull in order to make this a reality. We could increase activity, connect rate or conversion rate. We can rework the equation to solve for the change that would be required in each of these areas.
First let’s look at how much activity we would have to execute if connect rate and conversion rate remained constant:
To solve for activity, simply take the number of meetings you want to book and divide it by the connect rate and the conversion rate.
80 / 0.112 / 0.067 = 10661
So to schedule 80 meetings we’d need to execute 10661 activities.
You could also look at how slightly tweaking each of these metrics will impact your overall result as detailed in this video:
If you want a copy of this calculator, just reply to this email and I’ll shoot it over to you.
Comparing Campaign and Rep Performance
We can also use this formula to compare campaign and rep performance. And even individual channel performance. We do this by building out this formula for each individual, campaign or channel.
This will allow us to see discrepancies across our our organization which may present opportunities for improvement. Let’s look at an example.
We can see when comparing the two that the outcome is fairly close. Sam booked 12% more meetings than Sally, but did 65% more activity. There may be a way that can help Sam to improve his conversion rate to get closer to Sally, or there may be a way we can help Sally to improve her efficiency to generate more meetings. There is potentially something interesting here.
If we just looked at the number of meetings booked - we would have missed this.
You can do the same thing across campaigns or even specific channels. Does a particular channel have a higher conversion rate, and is there a way we can increase the focus on this channel?
Evaluating Changes to Tech Stack or Process
There are tons of tools out there that make promises like 10X the number of activities you can complete or, increase your connect rate by 50%. At surface level these sound great. But the tradeoff in improving one metric often comes at the expense of another part of the equation.
The simplest example is increasing activity by sending more templated cold emails. Theoretically every organization could do this overnight. Get additional mailboxes, find more contact info and hit send.
But what kind of a flow on effect does this have on connect rate and conversion rate. Let’s look at the calculator again and look at scenario where we evaluate a parallel dialer:
So there it is. The simple equation that determines outbound success and how to use it.
Remember if you want a copy of the calculator I showed in the videos, reply to this email and I’l send you a copy.
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