30% of sales professionals believe that Sales Engagement Platforms (SEPs) such as Outreach and Salesloft ruin prospecting (according to a LinkedIn poll on the topic).
In this article I’m going to look at why that might be the case, and what we can do as salespeople and sales leaders to fix it.
First off, let's clarify what we mean by ruin prospecting. The Bridge Group runs an annual report on a broad swath of metrics surrounding prospecting. It looks at the structure of prospecting teams, quota, ramp time, average tenure, productivity and compensation among other things (if you haven’t checked out their recent 2021 report grab it here.
What the reports show us over the last 10 years (from 2012 to 2021) is that there has been a significant decrease in two key metrics surrounding the efficacy of prospecting. The first is a significant increase in the number of activities reps need to execute to generate a conversation with a prospect. In 2012 this number was 6.2, in 2021 this swelled to 23.6.
274% increase in activity per conversation
The second metric that demonstrates declining effectiveness is the ratio of SDRs:AEs. In 2012 this ratio was 1:4.3 in 2021 this sits at 1:2.6. This is clearly a flow on effect from the amount of activity a rep needs to execute in order to generate a set meeting or opportunity. The less productive an SDR is, the more of them you need to keep your AEs busy.
65.4% increase in the SDR:AE Ratio
So the argument can be made that the effectiveness of Sales Development Teams has reduced over the last 10 years based on the metrics above. So are SEPs to blame?
Sales Development's Negative Feedback Loop
There seems to be a negative feedback loop in sales development. That is, lower conversion rates, lead to increases in activity metrics which in turn lower conversion rates.
Think about it from a prospects standpoint. A given CISO in 2021 (substitute this for any decision maker) receives twice as many prospecting messages as they did in 2012. How we do we know this - average daily activities per SDR has increased from 56 to 104 over this time period. So each rep is prospecting twice as much.
All this activity creates a lot of noise, which means any given rep's likelihood of cutting through is reduced. What happens when activities fail to cut through and generate meetings? Activity targets are increased. Sales Development teams have a tight grip on their metrics, if the metrics say more activity is required, activity levels are increased further feeding the negative feedback loop.
Sales Engagement Platforms and Increased Activity
SEPs came to market in 2011 with the founding of both Salesloft and Outreach that year. From 2012 onwards we see declines in the key stats we illustrated above. So are SEPs to blame or something else?
Let’s first consider what SEPs allow reps to do. For the first time ever, reps were able to write a series of templated emails once, and send it to hundreds of people . Using placeholder tags such as {{first_name}} and {{company}} reps can schedule a 10 email sequence to hundreds of prospects and watch as the opens and click throughs roll in. Reps can also schedule multiple phone calls to every prospect in their sequence. Whilst calling people to try and sell them something wasn’t invented by Salesloft or Outreach, the technology certainly streamlines this kind of behaviour. It’s easy to schedule 3 calls a week per prospect and actually follow through on making those dials when they’re queued up in a task list.
So what did this do to reps' behavior? Well, for the first time ever they had a way to reach out to prospects repeatedly at scale in a way that seemed personalised (using templated email). This probably worked well initially as with any new marketing innovation. The problem though as the technology becomes widely adopted the effectiveness waines. Prospects can sniff a templated email out. They receive dozens, potentially hundreds per day making them screen emails based on who the sender is as opposed to the actual contents itself. So has the move to more activity been effective?
The numbers would suggest it hasn’t. More activity, as the data shows, has led to fewer conversations per rep.
So what do we do about it? Double down on phone calls?
Not so fast, whilst all of this was happening, dial to connect rates on cold calls also decreased. In 2012 a rep had a conversation with a target prospect in one out of every 6 dial attempts. Today that has reduced to roughly 1 in every 40 on average (internal Sales Science data).
What explains this?
Well, there may be a few contributing factors here. The first is that these Sales Engagement Platforms made cold calling much more efficient. It’s very easy now to schedule and execute multiple cold call attempts to prospects as part of an outreach sequence. As we’ve seen above, when prospects are overwhelmed with activity they may be less likely to respond (in this case take a sales call).
The second is that there are roughly 4000 new SDRs positions created every year according to some reports. This means all together roughly 40 million additional cold calls are made every year by these new reps. Again contributing to the overwhelming noise.
The third factor influencing this may be the number of millennials holding decision maker positions. Millennials appear to be less predisposed to answering phone calls, having grown up in the age of text messaging and social media. According to a poll by OpenMarket 75% of millennials would rather lose the ability to make phone or receive calls versus text.
So to recap, since 2012 we’ve seen two forces combine to reduce the effectiveness of outbound prospecting that both coincided with the introduction of SEPs. reps being able to send prospecting email at scale through SEPs and a decline in call connect rates.
So are SEPs themselves to blame?
Well the old saying goes, a master craftsman never blames his tools. SEPs are a tool in the SDRs toolkit. The problem is that reps and managers alike have become too reliant on them. It’s easy to enroll a lot of prospects in a sequence if you have historical data on the conversion rate of that sequence. It just becomes a numbers game. The problem is that the numbers are trending in the wrong direction.
So what do we do about it?
Better Segmentation and Channel Validation
What does this mean?
Reps should have a set number of Tier One accounts. These accounts represent prospects that your product is a perfect fit for and will result in a high value order. You need both components. Potentially large deals that aren’t a perfect fit are a waste of time. Make sure these are companies where you absolutely know you can help them. This list shouldn’t be more than 10-15% of the total market you’re targeting.
The second thing to do is build a broader account list of the other 85-90% of businesses you can sell to. These may be smaller deals or deals where the fit isn’t absolutely perfect but an opportunity might exist.
Once you have these two lists you need to find contact information for the Decision Makers, Technical Buyers and Economic Buyers you sell to at each of these accounts.
Once you have contact information the next step is channel validation. This is where we’re looking to understand which channel we should use to reach each individual prospect. The graphic below illustrates this:
Following the flowchart (above), you will end up with your prospects grouped into three buckets, Phone, LinkedIn and Email. (more on how channel validation works in this article). This will allow your reps to be much more efficient about the activities that they execute. That’s because for example, for prospects that we know don’t take cold calls, we’re not going to waste time calling them. For prospects that aren’t active on LinkedIn, we’re not going to waste time trying to reach out to them through the platform. Instead we’re going to rely on the channels that we know the prospects are responsive to, or default to email which we know they’ll see.
The chart above outlines how we reach out to tier one and two prospects based on the channels they’re validated in. The distinction here is whether or not we use templated or personalised messaging.
You’ll notice that Tier one prospects get personalised messaging regardless of the channel. That’s because these prospects represent our best revenue opportunities. We want to take the extra time to make the messaging super relevant to their situation and how we can uniquely help. We can do this because only 10-15% of our prospects sit in this category.
You’ll need to research the individuals and the accounts in order to do this properly. Things to look out for in your research:
Content they have created (LI posts, blog posts podcast interviews etc)
Content they have engaged with
Relevant changes at their company (growth in department headcount etc)
Industry news
Shared connections
Previous jobs
Etc
But if we look at a Tier two prospect that is phone call validated for example, we see the need for a templated call script to use when we get them on the phone. The reason here is that it will take too much time to develop a custom talk track for 85-90% of our total addressable market. So we need to develop a script that works well for a wide variety of people. More on developing templated cold call scripts here.
Now we have a specific strategy in place for Tier one and Tier Two prospects for each channel. This means you should have six distinct sequences set up in your sales engagement platform for each persona type. The sequence you’ll use for each prospect will depend on whether they’re Tier one or Two and which channel you’re going to use to reach them.
This is how you begin to correct the issues associated with Sales Engagement Platforms. Forget the “enroll all” option. Start to get much more specific on how you treat each prospect and watch connect rates and conversion rates increase.