There is a very simple equation that distills how any outbound sales function is performing currently, and where the room for improvement exists.
That equation is...
Activities X Connect Rate X Conversion Rate x Show Rate = Meetings Held
Key:
Activities = number of dials, emails sent, linkedin touches completed etc
Connect rate = the % at which activities actually result in a two- way exchange with the prospect. Two-way exchanges are things like cold email replies, connects on cold calls and LinkedIn replies
Conversion Rate = The % of connects that result in meetings booked
Show Rate = The % of meetings set that show up.
The benchmarks for these inputs (on a monthly basis) are outlined below (data sourced from the 2021 Sales Development Report by the Bridge Group and Sales Science Market Research).
Activities | Connect Rates / Connects | Conversion Rate / Booked Meetings | Show Rate | Meetings Held |
2080 | 4.2% / 87 | 7% / 6.0 | 70% | 4.2 |
Not a pretty picture, but one that will be familiar to a lot of revenue leaders.
So when you’re looking for ways to improve results, think of each metric in the equation as a lever you can pull. Pull any of the levers and the number of meetings held will increase (assuming pulling the lever doesn’t negatively impact another metric).
The way that most organizations look to improve the meetings held is by driving up the activities and conversion rate. They do this by hiring more reps (more activities) and trying to drive up the conversion metric (through internal coaching and development).
I believe this is the wrong approach.
Before activity is scaled, companies should first look to improve the connect rates.
Why?
Connect rates can be improved simply through implementing a process change (no need to hire and ramp people) and will naturally lead to an improved conversion rate (because practice makes perfect.).
The process you can implement to drive higher connections is called Channel Validation. This is where you seek to understand which channel each prospect is actually active in. Channel Validation is the process of answering two questions for each prospect before you sequence them. The questions you find answers for are:
Does this person take cold calls?
Is this person active on LinkedIn?
Once you have this information you can equip your SDRs or BDRs to focus on executing activities that have a high probability of leading to a conversation.
This creates a completely different top-of-funnel picture. I’ve outlined a number of different scenarios below to show the impact this can have.
Scenario | Activites | Connect Rates / Connects | Conversion Rate / Booked Meetings | Show Rate | Meetings held | Pipeline Increase % from baseline |
Baseline | 2800 | 4.2% / 87 | 7% / 6.0 | 70% | 4.2 | |
1 | 2800 | 22% / 458 | 7% / 32 | 70% | 22.4 | 433% |
2 | 1200 | 22% / 264 | 7% / 18.5 | 70% | 13.0 | 209% |
3 | 1200 | 22% / 264 | 9% / 23.8 | 70% | 16.7 | 297% |
In scenario 1 shown above, all we’ve changed is the connect rate on our outbound activity. We’re assuming we’re now able to achieve a 22% connect rate on activity as opposed to a 4.2% connect rate. This increases the pipeline created by 433%.
In Scenario 2, we’ve dropped the number of activities we’re executing but have maintained the new connect rate of 22%. This 42% decrease in activity leads to a 209% increase in pipeline. And if we increase the conversion rate in this example to 9% (shown in scenario 3) we’re able to achieve a 297% increase in activity. It’s not unusual to see an improvement in conversion rate once channel validation is implemented just based on the fact your reps get better at having the conversations and interactions with prospects as they have them more often.
Why would you decrease the activity level?
Well channel validation doesn’t come without cost. Either a cost in dollars (paying someone to do it for you) or a cost in resources (having your SDRs do their own channel validation). Decreasing the number of activities executed is a simple\t way to show that the juice is worth the squeeze.
How does Channel Validation Work?
So how do we make this work? We just get the answers to the two questions.. 1) can we get this person on a cold call and 2) is this person active on LinkedIn?
How do you figure out if someone takes cold calls?
Simple answer - call them. Our approach to this is to call each prospect once per day for five days. If you’re able to get someone on the phone through one of these validation dials, chances are your rep will be able to get them on the phone when they call them.
The reason for this is easily explained. People either take calls from numbers / people they don’t recognise or they don’t. How they respond in one situation is usually highly predictive of how they’ll respond again in the future.
We’ve tested this extensively and the data tells us that if someone picks up one of these validation dials, you have about a 85% chance of speaking to them again within 5 call attempts. If someone doesn’t take one of these calls you’ll have about a 2% chance of speaking to them if you called them five times after they failed validation.
Note, these dials are designed to be cold calls. You can have off-shore reps executing these activities, we’re not pitching them in this situation we just want to know if they pick up the phone or not.
How do you figure out if someone is active on Linkedin?
Look at their LinkedIn profile. The markers that we look for to indicate activity on the platform is one of the following:
They have more than 1000 connections
They have some public engagement on the platform in the last 30 days (liked a post, commented on a post, or posted content of their own).
If they tick any of these boxes they’re active on LinkedIn.
Once you have these data points (do they take cold calls and are they active on LinkedIn) you can make much better decisions on how you design an outreach sequence to reach them.
Outbound sequence for people that take cold calls.
If they take cold calls your sequence should look something like this.
Day 1 | Call (no voicemail) |
Day 2 | Call (no voicemail) |
Day 3 | Call (no voicemail) |
Day 4 | Call (no voicemail) |
Day 5 | Call (leave voicemail) |
Day 5 | |
Day 7 | Bump email |
Notice here that we’re not emailing them or leaving voicemails on the first 4 call attempts. We want to give ourselves as much opportunity as possible to get this person on the phone. Why? Phone conversations convert to meetings / next steps at a higher rate than any other form of conversation. The reason for this is you’re speaking live, objections can be managed on the fly and the rep can make sure that there is no misunderstanding contextually.
Outreach Sequence for Prospects Active on LinkedIn
If someone doesn’t take cold calls but they’re active on Linkedin, the ideal sequence structure should look something like this:
Day 1 | Profile View |
Day 3 | Follow the Prospect |
Day 5 | Engage in content they’ve engaged with |
Day 5 | Connection Request |
Day 6 | Audio Message |
Day 9 | DM (text) |
Day 12 | Video DM |
Day 15 | DM (text) |
Day 16 | |
Day 18 | Bump Email |
Again, notice the activity here is exclusively targeted to LinkedIn for the vast majority of the outreach. We know they’re active here, and we know they dont answer the phone (so there is no point in calling them). We also don’t want to risk an email being unsubscribed so we wait until the end to leverage this channel.
Once you put this approach to outbound in place it’s not unusual to see the CAC associated with outbound decrease by 60-70 even 80%.
We’re removing the activity for activities sake and just focusing on activity that is likely to result in a conversation. The more conversations reps have, the more pipeline we’re going to be able to build.
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