The prospecting Gurus will tell you that you need to run multi-channel prospecting campaigns (phone calls, emails and linkedin outreach) to every prospect if you’re going to make outbound work.
I’m calling bullshit.
Here’s a few reasons why for the tldr crowd.
Most prospects aren’t responsive in every channel and therefore a lot of activity (and money) is wasted
Specialised reps perform better than Jack-of-all-trades
Spreading reps too thin lowers the quality of outbound activities
Cold Calling
So to the first point - Most prospects aren’t responsive in every channel and therefore a lot of activity (and money) is wasted.
The easiest way to illustrate this point is to look at two key stats, call connect rates (how many dials result in actual conversations with prospects) and Linkedin Daily Active User numbers.
Let’s start with call connect rates.
We speak to dozens of early stage tech companies every single month. Not once have I spoken to a company that achieves more than a 10% connect rate on cold calls consistently. Most companies tell us it’s around 2-5%.
That means for every 100 dials a rep makes, they’re lucky if they have 5 conversations with the target prospect. That means 95 of those dials result in nothing. No meeting set, no learning about the prospects current situation, no feedback on messaging and approach.
That becomes an extremely expensive exercise. Let’s say the all in cost for a rep (salary, benefits, taxes and tool cost) is $90,000 per year. And let’s assume another $20,000 in associated cost from managing that rep. That’s $110k per year all in.
Now let’s assume that rep makes 75 dials per day.
The cost per conversation for that rep is $117. Not per meeting, per conversation.
Now let’s assume it takes 10 conversations to set a meeting.
That’s a cost per meeting of $1,170 generating 95 meetings per year.
So clearly cold calling everyone to try and set meetings is an expensive exercise. But I hear you, what choice do I have? I need to speak to people in order to set meetings?
Only call people that answer cold calls.
What?
Think about it. There are two kinds of people in the world, those that take calls from numbers or people they don’t recognise, and those that don’t.
If you’re like me you don’t take these calls. Other people take them even in meetings or when they’re on vacation.
RiteChannel.com provides this service. They’ll process a list of prospects for you and tell you which of them take cold calls and which of them don’t. The results from this service are incredible. When you cold call people that you know pick up the phone, your connect rates will jump to 20-35%. Meaning your reps will have conversations with a prospect every 3-5 times they dial.
So what does that do to time and cost?
Well if we take the same example above. 75 dials per day and $110,000 per SDR but increase call connect rates to 20%:
Cost per conversation is reduced 72% to $32.62 and cost per meeting is reduced to $326.20 (again a 72% reduction).
That means a potential of 378 meetings per year per SDR with no additional effort.
So clearly on the prospects that pick up the phone, we should just call them, and the prospects that don’t, we shouldn’t, no multi-channel outreach required.
Now that Cold Calls are out of the way, let's look at LinkedIn or Social Selling.
LinkedIN Social Selling
According to a recent google search around 40% of the 740 million LinkedIn users are active daily.
There is a larger subset of these that are not just active but also post content to Linkedin. Specific numbers on this are hard to quantify exactly, but using the spotlight search function we can see the following:
So looking at this, activity on LinkedIn expectedly varies based on persona type, but doesn’t mean that any single persona is not active on the platform. We need to channel validate in order to determine who we should spend time social selling to and who we shouldn’t, regardless of whether they are a persona type that is less active (like a CFO) or more active (like VP Marketing).
That being said, simply including social selling for every prospect in your list would be a waste of time. Especially if there are other channels in which you’re more likely to start a conversation with that person.
So, summary of point number 1, it is a waste of time (and money) to cold call people that don’t pick up the phone and also to social sell people that aren’t active on Linkedin.
Jack-of-all-trades perform worse than masters in one. Specialising reps on specific channels improves conversion rates.
Now on to our second premise. Jack-of-all-trades perform worse than masters in one. Specialising reps on specific channels improves conversion rates.
You’ve all seen the rep who is an absolute killer on the phone. They convert cold call conversations at a 33% clip. You’ve also seen the rep who can’t cold call to save themselves, they have massive anxiety around the activity, they think it’s a waste of time and therefore never really develop the cold calling chops.
What if instead you could hire specialists to prospect in defined channels.
The Cold Caller
The Social Seller
The Writer
The Cold Caller tackles all of your phone validated prospects. The Social Seller targets those on LinkedIN and The Writer handles your email sequencing. The skill sets required to be successful in these channels vary dramatically. So why do we expect entry level salespeople to excel in all three areas? We generally don't ask marketers to be SEO experts, PPC experts and content wizards. So why do we do that with Salespeople?
What this hyper specialization will lead to is higher conversion rates across the three channels and therefore a higher return on investment for each dollar invested in the outbound SDR function. We can make this assumption due to the incremental performance improvement reps will be able to generate by being focused on a single channel.
That leads us into our third premise:
SDRs have too much to do everyday and therefore spreading reps too thin lowers quality
We can see from Bridge Group Data that the number of activities required for an SDR to start a conversation with a prospect has increased significantly since 2012. In 2012 an SDR completed an average of 56 activities per day, resulting in 9 conversations. In 2021 that has increased to 104 activities for 4.4 conversations. A 300% increase in activity to achieve the same result.
There is no way this level of activity can continue to scale. The current situation is akin to a negative feedback loop, reps need to execute more activities in order to generate conversations, which means the activities are lower in quality (increased quantity will generally decrease quality), which means each touch is less likely to convert, meaning they need to execute more activites. The cycle perpetuates over time to the point where outbound is no longer effective.
So how do we give reps time back so that they can be creative, effective sellers?
Give them less to do.
By having reps focused on activity (ideally in a single channel) in channels that have been pre-validated for each prospect (phone or LinkedIN) or in channels that can be delivered effectively at scale (email, notes, packages) SDR productivity can continue to trend upward again.
We have seen this at Sales Science across a large data set. The table below provides connection rate data pre and post validation for phone calls across a 3 month timeframe:
So making half as many dials, we were able to generate 4X as many conversations. You can imagine what this does to the quality of the conversations the reps are having.
If you know you’re going to have a conversation on 1 in every 5 dials the rep can spend time preparing for each call before making it. They can do specific account research, develop a custom talk track and be in the right frame of mind for having a conversation (they expect to speak to someone as opposed to expecting to hit a voicemail).
That last point is crucial. How often have you or one of your reps been caught by surprise because a prospect actually picked up. You expected to go through the motions and leave another voicemail and you’re all of a sudden thrown off. You were thinking about the sandwich you were about to eat and all of sudden you’ve butchered the opening line.
Expecting to have conversations is a surefire way to improve the quality of those conversations. But that’s hard for anyone to do when it takes 30-50 dials to get someone on the phone.
Moral of the story
For the love of prospecting, channel validate leads before you give them to your sales people.
You’ll save money and your reps will perform better whilst actually enjoying their job. You also open up a lot of opportunities for creatively designing a sales team structure that suits your organisation and market as opposed to rolling the SDR-AE industrial complex that has become commonplace. If you want to get started on this journey visit www.ritechannel.com to learn more.