Today I’m going to walk you through a metric that we track religiously - that is often overlooked.
It’s called Account Conversion Rate or ACR.
If you have a good ACR, you’ve likely built a scalable outbound sales process.
If it’s not so hot, you’re likely burning through your market and potentially doing more harm than good.
If you don’t track this I’d argue you don’t really understand outbound.
So let’s dig in.
If you don’t know your Account Conversion Rate you don’t understand your outbound math of sales.
To calculate your ACR simply divide the number of SQLs generated via outbound by the number of accounts you reached out to to generate those SQLS.
SQLs from Outbound / Accounts Prospected
For example - If we reached out to 125 companies and generated 10 SQLs our ACR would be:
10/125 = 0.08 or 8%
Notice here we don’t factor in the number of contacts at each account. Usually a company will generate one sale with a customer - even if we’re reaching out to multiple prospects at the same company we only count the companies - not the individuals.
Understanding this metric will allow you to:
Compare the performance of campaigns and reps in a more effective way
Understand how far you can push your outbound engine at its current performance level.
Using Account Conversion Rate to compare campaign and rep performance
ACR allows us to assess the performance of our outbound campaigns in a standardized way. This is important because there are a lot of different outbound campaigns that we can run. Campaigns based off of particular triggers, persona based campaigns and intent data campaigns to name just a few.
Comparing the performance of these campaigns based solely on the number of SQLs each of them generate wouldn’t be a fair comparison because there are varying inputs to consider. Things like:
How many accounts and contacts can be sequenced through each campaign (based on availability of the data)
How much time and effort is required to get these campaigns up and running
By standardizing our comparison metric to ACR we can easily identify campaigns that perform well and those that just have high inputs.
It’s easy to run a fully automated, persona based campaign to 15,000 targets and generate 50 meetings. But is that campaign of higher value than one that runs to 1000 targets and generates 8?
ACR can give us some of this picture.
Campaign A (15,000) ACR = 0.003 0.3%
Campaign B (1000) ACR = 0.008 0.8%
The same thing can be done for rep performance. John currently books ten meetings per month and Sally books seven.
Sounds like John is a better rep. We should get Sally to copy what John is doing… right?
Not so fast. With one other piece of information this equation can look much different.
We dig deeper and discover that John is prospecting 500 accounts per month and Sally is only prospecting 250.
So Johns ACR is 2% and Sally’s is 2.8%
Which approach should we look to emulate?
Well that depends - and that leads us to our next point…
ACR allows you to understand how far you can scale outbound
If you don’t understand your ACR you have no idea how far you can scale outbound.
Every company has a limited Total Addressable Market (TAM). Knowing your TAM and your ACR allows you to work backwards into how far you can scale outbound.
You can’t make projections on new customer acquisition unless you understand how many accounts you have to reach out to in order to generate an SQL.
Let’s look at an example:
TAM = 5000 accounts
ACR = 5%
Recycle period = 4 months (how long you have to wait before you revisit an account that didn’t convert)
Based on this equation you’ll be able to generate around 250 meetings every four months.
5000*0.05 = 250
If your growth assumptions as a business require more than 250 meetings every four months (or 750 per year) you can’t hit this number.
Not without one of the inputs changing.
Even if you add reps the end figure won’t change. You either need to add to your TAM or improve your ACR.
Sanity checking projections using ACR is a great way to understand whether or not the targets you’re setting for yourself are achievable.
So if you’re not tracking ACR, start doing it today. Take the number of SQLs you generate and divide that by the number of accounts you reached out to in order to generate those leads.