How to drive Predictable Revenue growth with a Radical Sales Pipeline Strategy

SOMAmetrics sales pipeline strategy

One of the first things we look at when working with a new client is their sales pipeline strategy. And, we are often surprised at how inadequate their sales pipeline strategy is. All the more surprising because these are typically highly experienced sales leaders. Don’t get me wrong—their sales strategies are detailed, well-thought-out, and comprehensive. They have worked out their sales targets, territories, and have fielded each territory with experienced sales pros.

And yet, when it comes to their sales pipeline development, their plans seem inadequate. Sales pipeline strategy is critical because as the sales pipeline goes, so do sales. The whole predictability of revenue growth depends on the predictability of sales pipeline. After all, it’s the foundation on which sales is built.

In fact, the most cost-effective way to realize sales targets is to invest in sales pipeline development. It is the surest way to see high ROI on the investment made in the sales organization.

In this article, we will cover the most important building blocks of a sales pipeline strategy. Our experience is that clients who follow this approach generate the quality sales pipeline they need to deliver predictable revenue growth.

The Building Blocks of an Effective Sales Pipeline Strategy

Start Right: Invert Your Funnel

Step 1: re-orient your mental funnel concept. The traditional concept of a funnel was based on how one pours liquid into a narrow necked bottle (fig 1-A). The top of the funnel is wide, and it tapers into a narrow bottom. In this case, gravity would aid us in getting the fluid into the bottle.

However, as every sales leader knows, there is no such aid from gravity when it comes to sales. In fact, Marketing, Prospecting, and Sales teams all face tremendous resistance from prospects. 

A more intellectually honest mental construct would be an inverted funnel (fig. 1-B). This more realistically shows the effort required to engage over-messaged prospects and overcome their deep skepticism. In truth, we are dragging prospects up against inertia and risk-averseness. Let’s start by being clear on what we are up against. 

Another way to look at this is that you want sales to go up, not down.

Build a More Segmented Ideal Customer Profile (ICP)

The Ideal Customer Profile (ICP) is the first point of alignment for Marketing, Prospecting, and Sales to ensure they are engaging the same audience with the same message. Yes, the engagement happens on different platforms/media at different times. And yes, the messaging itself is varied so as not to bore the prospect to death. But it must be aligned and consistent across all three teams.

Which means that if you find it necessary to use different sales teams, you should focus each team on a specific ICP. Let’s say you sell regulatory compliance solutions (reg-tech) to consumer lenders. At the top tier, you sell to global lenders such as Bank of America, JP Morgan Chase, HSBC, etc through your enterprise sales reps. At the middle tier, you sell to regional (multi-state) lenders using your account execs, and to the local community banks and credit unions, you sell through your junior reps.

These must be defined as three separate ICPs, with detailed descriptions of the account (company) as well as the personas (decision makers) to be engaged. And each sales tier should be extremely knowledgeable of their market space and their targeted personas.

This is foundational to building an effective sales pipeline strategy.

Define Average Deal Size (ADS) Separately for each ICP

Depending on whom one asks, the question “What is your average deal size?” seems to elicit different answers. For instance, we may ask someone in marketing and hear, “Our ADS is around $60,000”. Then we talk to a sales rep and he says he is looking at deal sizes between $250K and $500K. That is too wide a range to reconcile.

What that tells us is that those in marketing may be literally averaging across multiple tiers of customers, leading to messaging that is overly diluted.

 If you have multiple sales tiers, and you have defined multiple ICPs, you should arrive at a specific ADS for each ICP.

Measure your Average Closing Ratio Separately for each Sales Team

Similarly, measure the average closing ratio of each sales team separately. 

As it is very likely that your most experienced sales reps sell at the top end, you will likely see better closing ratios (25%-35%) there. Conversely, those selling the smaller ticket items to smaller customers may be more junior, and consequently show a much lower closing average (perhaps as low as 10-15%).

It would be just as bad a mistake to take the averages of these closing ratios as it would be to use an average ADS across all tiers.

Build your Sales Funnel Math Separately for Each Sales Tier

Armed with a well-defined ICP, ADS, and closing ratios, it is now possible to build a highly effective sales pipeline strategy for each tier.

The chart above shows the SOMAmetrics approach to funnel math. Here is a quick example:

  • Average deal size $100,000
  • Average closing ratio = 25%
  • Incremental revenue target for this tier = $10 million.
  • This means, on average,  we need 100 closed deals to reach our sales target.
  • Which means that, at the 25% average closing ratio, we need 400 sales qualified opportunities (SQOs).
  • If our SQO to SQL (sales qualified lead) ratio is 80%—which, by the way is pretty good—then we need about 500 SQLs from the prospecting/marketing teams.
  • If it takes on average three quality conversations (QC) to set a qualified meeting (SQL), then we will need about 1500 QCs to meet our Incremental revenue target, and so on.

Remember that these are cumulative numbers. Someone who wasn’t reachable last quarter, maybe reachable now. Someone who wasn’t interested 4 months ago, maybe interested now, and so on. Therefore, It is not necessary to have very large numbers at the bottom of the funnel stack. What is more important is the quality.

If the ICP is well-thought out and your value prop is compelling, then sooner or later, many in the ICP will be interested at least to explore your solution (pipeline development).

You will find a much more in-depth and thorough discussion on the best practices in prospecting at the high level in the seminal book, “The Radical Pipeline Strategy: How to Grow Pipeline and Revenue by Optimizing Sales Development”.

Integrate into One Cohesive Plan

Let’s assume that what we worked on in the previous section was for your middle sales tier. You would do the same for your top and bottom sales tiers. Once you have separately built your funnel math, and you have the separate numbers, then you can integrate them to arrive at your holistic revenue plan.

Taking a somewhat simplistic example, let’s say your overall incremental revenue target was $25 million. You think you can get $10 million at the top; $10 million at the middle; and $5 million at the bottom sales tier. You would build each funnel separately to support your target for that funnel. 

SIP: The Solution for Executing your Sales Pipeline Strategy

So far, we discussed in some detail the building blocks of an effective sales pipeline strategy. Next we will see the building blocks of a highly effective solution for building a high quality sales pipeline.

For this discussion, we will focus solely on the the prospecting (SDR/BDR) team for two important reasons:

  1. While there are numerous high quality tools for aiding the work of marketers and sales professionals, that doesn’t seem to be the case for those tasked with prospecting.
  2. Companies make lots of investments on marketing and sales. However, if an adequate amount of quality pipeline doesn’t materialize, then all that was accomplished was to increase costs.

Yes, there are a number of tools that boost the efficiency of Sales Development Reps (SDRs). With these tools, SDRs can easily make 100 dials a day.  However, we haven’t seen tools that boost the effectiveness of SDRs—their ability to engage high-level decision makers and book qualified meetings.

Therefore, we would like to recommend a tool that significantly improves the effectiveness of SDRs, enabling them to build high quality sales pipelines, cost-effectively. We call this solution SIP (SOMAmetrics Intelligent Prospecting). The key components are listed below.

GOSPA Manager

Now that you have developed your specific sales pipeline strategies for each sales tier, you are ready to execute.

Going back to our earlier reg-tech example, let’s say you have two SDR teams:

  1. The more senior SDR team prospects for the enterprise sales team
  2. The junior SDR team prospects for the regional accounts sales team

Let’s say you have one manager for each team.

You give each SDR manager his/her numbers—their incremental pipeline amount and average deal size. From these, they can figure out their quarterly targets including the quarterly number of meetings needed.

They then divide the overall number by the number of SDRs on their team to arrive at each SDR’s quarterly target.

This is where GOSPA comes in. GOSPA stands for Goals, Objectives, Strategies, Plan, and Activities. It is a proven model for aligning the needs and wants of the individual SDR with that of the company. By the way, it’s a good idea for the SDR manager to also build his/her GOSPA as well.

Each SDR will build his or her own GOSPA–how they plan to hit their numbers. They will submit their GOSPA to their manager, who will review with them and make suggestions as needed. SDRs have to hit their assigned numbers, but they can commit to a higher number if they wish to make more money.

Now that each SDR has both the assigned and committed numbers, he/she can set these as targets and work towards hitting them.

We have found that when SDR teams use GOSPA, the average quota attainment rate increases by as much as 40% or more. Here is an article that discusses GOSPAs and how to use them.

ICP Briefs

Think of your most experienced sales reps or SDRs. What makes them good at what they do is that they know their prospects very well. They know the industry or market space. They know what that prospect does–what her responsibilities, headaches, priorities, and goals are. 

Which means they know how to talk the prospect’s language. As a result, they don’t waste their prospect’s time. Which is why they tend to sooner or later catch their prospects, and why prospects agree to talk to them when they connect.

Now, what if all your SDRs were like that? By how much could your sales pipeline grow? And how much would that increase your sales?

Sure, training is important. But the data shows that people tend to forget what they have learned unless they apply it immediately and consistently. However, today’s environment is different. It takes a lot of effort to reach a high-level decision maker. New or junior SDRs don’t get a lot of chances to practice what they were taught. Which increases their likelihood of forgetting much of what they were trained on.

A better approach is to give them briefs—on the industry, personas, and competitors. These briefs are short but powerful. They show them only what they need to know. They point out the trends and challenges in that space. They illuminate how their prospects think, what their priorities are—how to talk to them.

Best of all, these briefs are always there for the SDRs to take a quick glance as a refresher. Unlike training which is an event that occurs at a specific time, and then is over, these briefs are always available to the SDRs.

Prospect Engagement Tools

Depending on the industry and personas you target, it could take twenty (20) or more touches before your SDRs connect with the right person. That’s dials, voicemails, emails, and LinkedIn messages.

The more compelling the emails, voicemails, and LinkedIn messages, the higher the connect rate. Prospects become intrigued and more willing to take a call. 

If you agree with this logic, then you don’t want your SDRs writing their own emails—especially your junior SDRs. What we have seen happen too often is junior SDRs Googling to find templates, make small changes, and send these off. Templates by nature are generic, which is the opposite of compelling.

Get these emails, voicemails, and LinkedIn messages professional crafted. It’s well worth the small additional cost.

Call Navigator

After making hundreds of dials with the help of a power dialer, your junior SDR is finally talking to the COO of a bank. Now what? How does he open the call? How does he intrigue the COO to want to hear more? How does he qualify to make sure there is need?

And having done all that, how does he get a meeting?

One thing you and I know is that the qualifying questions your SDR asks are in themselves telling. Prospects know by the questions they are getting whether they are talking to someone who will waste their time or not. 

What if the SDR got some simple objection such as “I don’t have time right now” or “Why don’t you send me some information I can take a look at?” What if the prospect asks how much it costs? How does your SDR neatly navigate these, finish qualifying, and get the meeting?

As the name implies, a Call Navigator walks your SDR through the prospecting call. How to open it, what example stories to tell, how to handle objections and questions, and more.

Campaign Manager

Marketing teams spend a lot of money on multiple lead generation campaigns every year. Some are event-based such as conferences or webinars. Others may be promotional such as ads. SDRs play pivotal roles in the achievement of campaign objectives. 

For instance, if you are sponsoring an expensive conference, you want to drive as many prospects to your booth as possible. Making sure your SDRs are well aware of the campaign, remember to mention it, and know what to say can make or break the campaign ROI.

A Campaign Manager ensures that a specific campaign relevant to the ICP that the SDR is calling into is front and center on that SDR’s view. It constantly reminds the SDR to be sure to invite the prospect before ending the call.

In Conclusion

At SOMAmetrics, this is how we help our clients build their sales pipeline strategy, and then provide them with the solution they need to effectively execute their strategies.

Clients who use the SOMAmetrics Intelligent Prospecting Solution (SIP) see as much as 50% increase in sales pipeline development within 90 days.

Let’s schedule a quick call to discuss your needs and how we may be able to help you.

Building High Quality Sales Pipeline

High quality sales pipeline

NOTE: Read this ONLY IF your team is having difficulty consistently hitting their quotas.

The number one factor that affects the ability of sales leaders to hit their numbers is high quality sales pipeline. In fact, as the sales pipeline goes, so does revenue growth. Sales leaders that focus on building high quality sales pipelines are far more likely to consistently hit their revenue targets.

Now, most sales leaders know this. However, we keep seeing a far greater focus on the size rather than the quality of the sales pipeline.. Quality matters even more than size for one important reason: A high quality sales pipeline will deliver the same amount of revenue for less cost than a larger, less quality sales pipeline. Which means more profits per sales dollar earned.

Sales leaders must accurately forecast sales for a given period (quarter or year), and hit that forecasted number. This is true for CROs and VPs of Sales, as well as regional sales leaders. And, in all cases, success greatly depends on the availability of a high quality sales pipeline.

Furthermore, the cost of generating revenue is just as important as hitting revenue targets. This is especially true during times of economic uncertainty. Which brings the issue of quality to the forefront, as we shall discuss below. 

In this article, we will discuss:

  1. Why the quality of the sales pipeline matters more than the size of the sales pipeline
  2. Why effectiveness, and not efficiency, is what builds a high quality sales pipeline, and
  3. How an intelligent prospecting solution is what’s needed to increase effectiveness and build a high quality sales pipeline. This typically can increase by as much as 30% or more in just 90 days.

Why High Quality Sales Pipeline Matters

Sales is not just a numbers game anymore.

The traditional view of sales is that it’s a numbers game—if you want more sales, do more activities. However, activities are just another way of saying cost. More activities means more money spent on leads generated, more conferences attended, more people hired, and so on.

Since 2011, the cost of acquiring a new customer has increased by an average of 10% per year (CSO Insights). Not only that, most customers no longer remain customers as they once did. An Accenture study showed that 80% of customers change vendors within 24 months (2019).

And, competition is intensifying. Over 100 million companies started each year globally (HBR). Which means that the trend will be further increase in cost of acquiring a new customer.

Companies can no longer just spend their way to growth. The better way, we argue, is to improve sales processes so that sales increase faster than costs. Below are some practical ideas that may help.

What Sales Leaders Can Learn from Manufacturing

The “product” of a sales team (the “deliverable”) is revenue. Manufacturing shop has to forecast how many units will be made and delivered within a targeted cost model. Similarly, sales teams must also forecast and deliver revenue within a targeted cost model.

During the 1970s and 1980s, US manufacturers found themselves at a significant cost disadvantage compared to Japanese manufacturers. As a result, US manufacturers were rapidly losing market share in automobiles, electronics, memory chips, and more. Japanese manufacturers found that they could eliminate a great deal of their manufacturing costs by improving their quality process. 

At the time, the prevailing wisdom among American manufacturers was that improving quality meant increasing cost. And, they didn’t think customers wanted to trade off higher quality for higher cost. At the time, the typical “Quality Control” approach of US manufacturers was to estimate the number of defects per million. For example, if they estimated say 4% defect, they would then add that to their forecast. So, if they targeted 1 million units, then they would make 1,040,000. That meant they were prepared to throw out 40,000 units.

However, Edward Demings showed that the further a defective unit moved into the manufacturing process, the greater the cost. More and more labor and additional material would be added to the defective product, which eventually has to be discarded. Therefore, catching a defect very early in the process reduces the overall cost.

American manufacturers learned that improving quality meant reducing cost—which meant increasing the overall value of the product to the customer.

Sales is a Quality Process

Similarly, the sales process should be a quality process. What goes into the sales process determines to a great extent what goes out at the other end. 

Improving the quality of the process not only increases the “yield” (total revenue gained), but it reduces the cost per yield (cost per dollar revenue).

We will illustrate this with an example of what we saw with an actual customer. We have modified their industry and some of the numbers to protect their privacy. However, the story is largely true.

Case Story: Costly Errors That Could Have Been Prevented Early

The client sells enterprise Business Intelligence (BI) software. Their Ideal Customer Profile (ICP) is enterprise accounts primarily in high-tech manufacturing. Their target personas are CFOs, Controllers, VPs of Finance.

Pre-COVID, their average closing ratio was about 25% at an average deal size of $100,000. The Board thought that with the COVID lockdown, they actually had greater opportunity. They decided to double the previous year’s incremental revenue target to $20 million.

Therefore, based on their expected close ratio of 25%, they assumed they would need about $80 million in sales pipeline. They expected 60% ($48 million) of that to be generated by the Sales Development (SD) team. At the assumed average deal size of $100,000 they would need about 480 meetings/year set by the SD team. This is about 40 meetings per month.

They thought a team of eight SDRs would be adequate, based on past results. However, there was one crucial change they didn’t factor into their core assumptions. They had promoted out of the SDR team two top SDRs who were incidentally generating most of the meetings). Which meant they had to hire five brand new SDRs to make the team of eight.

That was the plan. What actually happened is a far different story. 

We said above that the least expensive place to catch a defect is at the beginning of a process. As you will see below, “defects” were allowed to move further and further, from one step to the next.

  1. Aggressive numbers drove all other (bad) decisions. They assumed that to double the previous growth rate, all they had to do was double all the numbers downstream.  But as we shall see below, the conditions pre and post-COVID were very different.
  2. Marketing lost its focus. In order to support the suddenly doubled sales pipeline requirements, Marketing had to significantly increase its top of funnel. It had to go after verticals it knew little about. Furthermore, it had to dilute its Persona requirements to get more contacts into the funnel. Before, they were only interested in marketing to the C-suite. Now, they went all the way down to director and manager levels to get the targeted database. Consequently, new “Marketing Qualified Leads” (MQLs) included business analysts and pricing managers who could never make buying decisions.
  3. Very young SDR team left on their own. Pre-COVID the company had five experienced SDRs who had the benefit of working closely with sales execs. They learned how to qualify and set the right kinds of appointments their reps wanted. This was no longer the case. The five brand new SDRs who had never prospected before, were working from home completely isolated. They made few dials because they felt out of sorts and demoralized. and when they were given inbound leads, they made their pitch and booked a meeting without really qualifying the prospects.
  4. Meetings were low quality, leading to low quality pipeline. These new SDRs didn’t know how to prospect at a senior decision maker’s level or to properly qualify, quality suffered. They were booking meetings with the wrong people and/or with accounts that were too small to afford the product. As a result, most of the meetings booked led to nowhere.  
  5.  Pipeline-starved sales reps started accepting any meeting. The reps had large quotas and no pipeline. Many were assigned verticals they have never sold to before. So, they accepted any meetings, did their discovery calls, and tried to make the best of what they were getting. 
  6. Closing ratios and average deal sizes began to deteriorate. As can be expected, closer rates dramatically dropped as did average deal sizes as reps cut prices to win deals.
  7. Attrition rates rise. Missed quotas meant no one was making money and sales reps and SDRs alike began to quit. Management began to offer more money to attract new SDRs and sales reps.
  8. More money spent on hiring with little effect on revenues. The teams missed one quarterly target after another. At first the company tried to spend its way out of the problem. They hired more SDRs and sales reps. Eventually, they saw that costs were growing alarmingly faster than revenues and began layoffs.

A mistake that was made right at the beginning and could have been caught early, just kept snowballing. Millions of dollars were unnecessarily wasted without the desired effect on sales growth. One major point of failure was the SDR team on which rested so much. Too much of the underlying assumptions rested on a very young SDR team. It appears that Senior Management underestimated the challenge in building the quality of pipeline needed to hit the targeted numbers.

We have seen this happen too often. Many companies simply mandate sales numbers, then think they can hire their way into that number. Sure, that can happen—if one throws enough money at it.

However, there is a cheaper and faster way to ramp up, as we shall discuss below. 

Quality Sales Pipeline is About Effectiveness, Not Efficiency

Experience and research clearly show that Improving the quality of a sales pipeline is about prospecting effectiveness, not about efficiency. Increasing efficiency may increase the size of your sales pipeline, but it will NOT improve the quality. 

Efficiency is about doing things the right way. The focus is on doing more things in the same amount of time or for the same effort. For example, a power dialer may allow your SDRs to easily make 100 dials or more per day. However, it will not change the quality of conversation between the prospect and the SDR once there is a connection. 

(By the way, the vast majority of software tools for sales and sales enablement are about improving efficiency.)

Effectiveness is very different. It is about doing the right thing—the activity that produces the most results for the same effort. Effective people first decide what they will do, before figuring out how they will do it. Effectiveness is what we produces the right ROI.

In prospecting, it is knowing what to say to whom, when, and how. Your best reps focus on quality, not busy-work. What they do consistently produces the desired results.

You know that your best people always talk to the prospects that can get them to a “yes” decision quickly. They only want to talk to the most senior people in the largest accounts. They know what results they want and who can get it done for them.

Which means your top 10% are carrying the vast majority of your teams.

Our analysis shows that less than 10% of SDRs/sales reps produce 50% or more of the results. Can you imagine what your numbers would look like if you can close the gap between your top and bottom performers by even 15% or 20%?

So, how do you get your struggling SDRs to be effective? How do you get them to talk to the right decision makers in the right way, thereby building a high quality sales pipeline that closes faster, and at a higher rate?

Intelligent Prospecting = High Quality Sales Pipeline

We started this article by saying that the sales pipeline is king—as the pipeline goes, so does revenue. We also said that it is the quality of the sales pipeline that matters and we showed some illustrative examples.

Assuming we are in agreement so far, the next question is : How do you build a high quality sales pipeline in the size you need, to confidently hit your sales target?

Building a high quality sales pipeline means prospecting intelligently, effectively.

It means talking to a decision maker, and keeping that prospect engaged, curious, and wanting to meet with a sales rep to explore further.

For that to happen, your SDRs must fully understand the space and the persona they are calling. That means they must fully understand what companies in that space do, how they compete, how they make money, what threats they face, where the trends and opportunities are, and more. 

Your SDRs must fully understand the role and level of the person they are talking to–what her responsibilities are, her challenges and pains, what she wants to accomplish, what constraints she faces, and so on.

Armed with that background, your SDRs must customize their pitch and value prop to perfectly fit the space and persona they are talking to so they have a compelling opening and have their prospect fully engaged and curious.

And that’s just step 1.

Step 2, and the real job of your SDRs, is to adequately qualify your prospect so that there is at least an 80% chance that this prospect will advance further down the sales funnel once your sales rep has completed a discovery call. If that is NOT the case, your SDRs shouldn’t even be setting a meeting. This is how you keep quality high and your cost of generating revenue low.

 Step 3 is to book the meeting.

Finally, step 4 is ensuring that the prospect stays engaged so she attends the meeting.

Clearly, your best SDRs and reps are already doing this, but perhaps the others aren’t.

The SOMAmetrics Intelligent Prospecting Solution

SIP is an Intelligent Prospecting solution that increases prospect connect rates, leading to more qualified appointments, resulting in more discovery calls that convert into sales pipeline.

SDRs and inside sales reps who use SIP can expect to see up to 50% improvement in their sales pipeline within 90 days.

SIP is a complete prospecting solution consisting of Industry and Persona briefs that provides your SDRs with a concise but thorough briefing on their prospect’s background; a Call Navigator that customizes your value prop to each market space/persona to give your SDRs a compelling opening; the qualifying questions they need to ask; objection management; and more.

SIP also comes with a Goals Setting tool called GOSPA GOSPA (Goals, Objectives, Strategies, Plan, and Activities) that help each of your SDRs to prepare their plan on how they will meet and exceed their quotas. These plans give them the target and actual view each time they login. At any given moment, SDRs and their managers can see where they are at in achieving their targets.

Finally, SIP comes with a Campaign Manager that ensures your SDRs follow up on the most recent, high priority campaigns, ensuring high ROI on key marketing spend such as events and ad campaign spends.

SIP can make the difference between your teams missing their numbers and consistently crushing them. Click here to schedule a quick demo.

5 Reasons Why Your Sales Development Team Is Failing

Sales Development

Ten years ago, I wrote a book titled, “Teleprospecting for Executives Who Sell Complex Solutions”, a workbook to help executives understand how to properly run a Sales Development operation in a B2B setting.

I recently reviewed my book to see what had changed, expecting to make massive changes before publishing on Amazon.

While some of the details may have changed, I was astounded to find that fundamentally not much has changed in the Sales Development world since I last wrote my book.

Today, most companies have invested in Sales Development Teams—typically referred to as Sales Development Reps (SDRs). This team is hired to generate meetings for their sales team organization. The majority of these SDRs are not successful. The Sales organization doesn’t accept meetings that they generate, and the trust between the departments fades very quickly.

At the same time, SDRs feel like they have worked hard to generate these meetings. They fail to see why a sales process and strategy do not accept these hard-won meetings. Sales Reps find that marketing meetings with SDRs are shallow, don’t map to the relative customer buying journeys, and rarely include decision makers.

What Has Changed?

Ten years ago, each of my sales development representatives received around 200 solid MQL calls each month. While about half weren’t that great, the rest were good enough for the team to call in to qualify for need and pain.

Now, decision makers don’t read their emails or answer the phone unless they know the caller. This has put a huge burden on demand generation development teams to drive traffic to their websites. But these inbound leads dribble in and the numbers aren’t large enough to support an SDR team.

Therefore, to fill the gap, demand gen teams depend on content syndication to make up the difference and send these to their SDR teams to ensure that they have someone to call. News alert! Qualified leads from content syndication will only burn out your SDRs because very few out of thousands actually have a need. Most of these prospects are just doing research for personal reasons or just to keep apprised of what data tools are available, maybe for future use.

The business world has changed! It has become more difficult to engage prospects and to generate leads. This is one of the reasons why SDR teams aren’t effective. Now let’s look at other reasons.

5 Reasons Why Your Sales Development Team Is Failing

1. Inbound lead traffic is low

Demand generation teams struggle to get quality, meeting-ready leads in front of the SDR teams.

2. Companies hire junior level people to generate meetings for sales

As stated in my book over 10 years ago, it is counterintuitive to expect your least experienced people to be the first point of contact with your very special prospects (decision makers, influencers, etc.). Junior people don’t understand your prospect personas, what keeps them up at night, and how to engage them on the phone to get to their needs/pains even if the prospect doesn’t have an initiative. When a junior SDR has a call guide, they don’t have the skills to make the points on their own and to tell a story about the value prop of the solution they are calling about. They also don’t know how to pivot when the call goes off-script.

In my book, I tell a story about a senior SDR who reported to me. He had a call with a CTO at a Fortune 100 Manufacturing company. David (the Sr. SDR) had a quick meeting with me to review his sales strategy and process for the upcoming call. He had just read an article in CIO Magazine which reviewed why CIO’s/CTO’s typically last in their positions for less than 18 months. During the call, he mentioned the article when the CTO told him that he wasn’t interested. David replied, “Sure I get it. Your job isn’t to figure out how to lower your energy spend. I just read an article that discussed how CIOs like you only keep their jobs for 18 months, because CEOs don’t believe that they are effective. I’ll send you the article.”

It took David about 3 years of hard work and a personal drive to become a sales qualified Executive. Juniors will cost you a lot more, in the end, because they are not effective and require a lot of training.

3. Companies believe that the SDR’s job is to generate appointments

This is wrong! The job of the SDR is to build a sales pipeline and execute through sales operations. The method used to build the pipeline is by setting meetings with decision makers and/or influencers to understand the prospect’s pain and to show the prospect how their problem is bigger than the cost of the solution. Companies don’t establish that their job is pipeline development, even though that is what everyone wants…. More and better pipeline.

The best way to establish pipeline growth is with a compensation plan that includes a small part of the variable for the appointment, a bigger part for an approved SQL, and a larger part based on the amount of pipeline generated each month/quarter from these appointments. I have coached my clients to add a bonus that maps to the closed deals from these appointments. Regardless of structure, the compensation plan focuses on pipeline growth.

4. Companies don’t establish the right KPIs to track and measure SDR activities

Dials made and emails sent are good to track, however, these elements do not ensure quality meetings. There are a few key SDR statuses that I look for (the details are in my book). Meaningful Conversations or Key Conversations are calls with a decision maker or someone in the know to identify some issues/paints. Often it requires more than 1 call to get all of the details to generate a strong meeting for Sales.

However, if there is interest, the timeline is decent, and the person is the right person, then there is enough information to set the meeting and send to sales. Either way, this status needs to be tracked, among others. From my perspective, Meaningful Conversations Or Key Conversations are the SDR pipeline and they should have 2-3x their meeting quota each month.

5. The SDR process is different from a sales processes

Most companies don’t understand this and set up their CRM as a one-size-fits-all. SDRs should make a lot of calls and send many emails/day. SDR Managers need to keep track of these activities, which won’t necessarily lead to a great meeting, they are required to get meetings. As stated, there are other KPIs to track as well, to ensure that SDRs are driving to their goals.

In addition to mapping the KPIs into the CRM, key qualifiers that your team needs to gather should be in the CRM. This will ensure consistency in B2B sales, and enable the SDR Manager to track the quality of the lead/meeting before they are given to sales. As such, there should be two approved workflow processes set up to track the meeting:

  • Make sure that there is a process for the senior sales manager to approve the meeting.
  • Once the meeting is approved by the SDR manager, the workflow should move the meeting to receive the account executives’ approval after the call has happened.
  • If the Exec doesn’t approve the meeting, the lead should be pushed back to the SDR with notes of what is needed to make this a better meeting. This gives the SDR a chance to re-engage with the prospect and get more information about their inside sales.

These 5 points of failure, if fixed, will enable your SDR team to generate meetings that build an effective sales pipeline. Pipeline is King!

Read the book The Radical Pipeline Strategy: How to Grow Pipeline and Revenue by Optimizing Sales Development. This book outlines tested best practices and implementation strategies that I developed while rebooting and building 65 SDR and Inside Sales organizations.

4 Sales Development Manager Oversights That Hurt SDR Teams

sales development manager

Regardless of whether the Sales Development team in your company is under Sales or Marketing, your Sales Development Manager must manage the SDR team like a Sales Manager manages her sales team.

1. SDR Team Managers need to manage by two sets of numbers

Over the years, I have learned that the job of an SDR team is not to generate meetings. It is to generate pipeline for Sales. Each Sales Development Manager (“SDR Manager”) should have a pipeline quota they must achieve. Pipeline is King! If the SDR team achieves its meeting quota but misses the pipeline quota, that is a big failure in my mind. On the other hand, if the team misses its meeting quota but hits or exceeds the pipeline quota, that is a big win.

Sales Managers need to ensure that their Sales Execs are not sand-bagging and adding deals at a lower pipeline value. This is often a bone of contention for SDR teams. Sales Development Managers must meet with Sales Leadership regularly to keep both sides honest.

2. Track the Sales Development Manager’s time over 5 days

You can create a spreadsheet with columns that have a field label “type” and other fields for the days of the week (M-F).  Some examples of these types include:

  • Team meetings
  • Coaching Individuals
  • Reporting
  • SDR Pipeline Review (The SDR Pipeline tracks the Key Conversations that each SDR has achieved and needs to be 2-3X the meeting quota)
  • Meeting Approvals
  • Other Meetings
  • Admin Work.

Without fail, this exercise has shown me that most SDR Managers spend less than 12-15% of their time coaching and assisting their team to improve skills or experience. If your team is primarily made of junior SDRs, then senior Sales Managers need to work with the team regularly to brainstorm business development tactics. My recommendation is that management focuses 30-40% of their day coaching their teams. Time spent coaching a team with the use of the call guide, messaging, persona needs, and role-playing will help to elevate the team of junior SDRs.

3. Forecasting meetings and pipeline growth

This skill should be a part of every Sales Development Managers’ job. It is very important to track weekly progress, where the team is, and what the SDR Manager forecasts for the Quarterly regional sales. Forecasting is also important because if the team is off at any point during the quarter, the SDR Manager must pivot on their strategy to ensure that the team will still produce strong results with their support.

4. Build a mini business plan

This will outline how the team plans to achieve their goals and objectives in a specific amount of time. GOSPA (Goals, Objectives, Strategies, Plans, and Activities) is a 1–2-page plan which focuses on the manager and the SDRs on the how of achievement. Each set of quarterly goals should be given to team members. Most companies fall short by not engaging team members to determine the “how”. These documents should be reviewed with the SDR Manager to determine if the SDR has set realistic objectives and strategies.

Team members who review and update their GOSPA’s will be more successful than those who don’t. If a team doesn’t know how they will tangibly hit their objectives, they won’t succeed. Strategies may need to be changed, throughout the quarter to hit numbers. If the team has a method for developing a strategy, are monitoring where they are each week, and are responsible for the “how”, they are more likely to be successful.

Treat your SDR teams as a strategic part of your sales organization (even if they report into Marketing). The team will generate viable meetings and pipeline for the Sales team.  

Focus your SDR Managers on what matters.  Pipeline is King!

Email me at if you want to reboot your SDR team.

Learn about our SDR Enablement.

Why Sales Development Representatives Underperform

sales development representatives

Before sales development representatives existed, remember telemarketers? Without caller ID, we didn’t know who was calling until we picked up the phone. We were trapped in by someone on the other end trying to sell us something, not taking “no” for an answer. We hated it.

And so did the telemarketers. They mostly got yelled at for wasting their time or simply hung up on. It was a job for the desperate and paid very little.

Sometime in the 1980s, someone went to B2B companies and proposed to set appointments for their sales process teams. They hired good candidates (better than the telemarketers) and trained their “tele-prospectors” well on the prospects they were calling into

Eventually, the client companies thought they could save some money if they brought these skills in-house. They started hiring “Business Development Representatives” (BDRs) to take inbound calls and set appointments. They hired “Sales Development Representatives” (SDRs) to make outbound calls and do the same.

And that’s where things started going wrong. This was a cost-saving initiative and most executives had “B2B telemarketing” in their minds when they posted these job descriptions. They hired junior sales reps—many from retail or financial services— and gave them basic training (mostly on their own products). They let them loose to make phone calls on their prospective customers.

What could go wrong?

This is typically a path to increasingly lower returns. Using junior-level people results in a dismal sales pipeline built, which means that more have to be hired to meet the desired quota, which leads to greater resistance of hiring skilled people at higher rates and trying to find even less expensive ways to staff this critical operation.

There is a better way.

If you are going to hire junior SDRs and BDRs, then you must use effective time management to train them and arm them with the tools they need for success. Use sales prospecting metrics (start with pipeline as your top metric), arm them with a strong understanding of the business marketing and personas they are calling into, and change the process from a phone-first to an email-first approach.

Brand your company as a source of valuable insights and information—a thought leader. Craft each email that goes out by making sure:

  • Your company name and the BDRs name are in the “from” part of the email
  • The subject lines are informative (and not, “Jim, quick question?”)
  • Leave well designed and customized voice mails making it clear which company and which BDR left the voicemail
  • Don’t forget to make sure your company name shows up on the caller ID
  • Brand your emails and calls separately from your competitors until your prospects recognize you—and want to pick up and talk to your sales executives.

Don’t do what others do. Do what is in the best interest of your prospects by not wasting their time and ensuring each email and call is worthy of their attention.

Read more of our blogs here.

The Strategic SDR Compensation Plan

Strategic SDR compensation

A strategic SDR compensation plan naturally aligns the objectives of the SDR team with that of the Sales Organization.

For example, restaurants figured out a long time ago that if they made their waiters share tips with bartenders and busboys, everyone made more money. In fact, the better tippers got their drinks made first and tables turned around faster.

It doesn’t pay to be stingy with tips. Same thing in Sales.

Providing decent variable compensation plans for your SDR teams results in significantly greater sales that more than covers the increase in compensation.

Our analysis shows that by paying out an additional 1.6% of sales in SDR variable comp plan and providing them with the adequate training and content support they need, sales can increase by twice as much. Hard to believe, but that is the magic of using your SDR team the right way and focusing them to build a quality sales pipeline.

Let’s remember that there are two reasons why the right compensation plan ends up creating the motivation necessary to produce far greater outcomes than the cost of the compensation:

  1. Everyone could use more money (especially those at the lower end of the pay rate), and will strive harder if paid more.
  2. It incentivizes the job for them—rewarding them for each small success so they are constantly achieving many small successes that lead to big wins at quarter or year end.

The Strategic SDR Compensation Plan

SDR variable comp plans have three components: what you pay for meetings; what you pay for pipeline, and what you pay on revenues generated as a result of the meetings set by the SDRs. Let’s discuss each in some detail.

Strategic SDR compensation 1: Meeting Bonus

We said that the SDRs should be measured on the pipeline they build and not on the meetings they set. However, meetings are the vehicles that make pipelines possible, so they do need to set meetings for the sales reps.

By paying a small bonus for setting approved meetings, we encourage SDRs to set more qualified meetings.

How it works: 

  • Let’s suppose that the SDR has a monthly quota of eight meetings per month.
  • When the SDR sets a meeting, the SDR manager is notified and examines the details of the meeting—the title, company, completeness of details including email and phone number, date set (is it too far out or not), and completeness of notes.
  • The sales managers inform the sales reps of any information that the SDR has gleaned.
  • If the manager believes this is a qualified meeting, she will approve it. Otherwise, she declines it, which means the SDR will have to solve the critical problems that were present.
  • If the manager approves the meeting, the SDR receives the approval email and knows he has just won his meeting bonus
  • If you pay $25 per approved meeting, and the SDR meets his quota, he just made another $200 that month—this may not be a lot, but it creates small but immediate rewards towards which to work each day.

Strategic SDR compensation 2: Pipeline Bonus

The real job of the SDR is to build a sales pipeline. Each approved meeting has the potential to do that. To actually go on to the sales pipeline, the following must occur:

  1. The prospect actually attends the meeting with the sales rep
  2. The sales rep conducts a full discovery call and deeps that this can go on the pipeline because there is a viable sales opportunity here
  3. The prospect agrees to the next steps proposed by the sales rep

Let’s say we pay SDRs $150 per $100,000 of pipeline created (0.15% rate). We track this quarterly, which means that as soon as the sales rep creates that opportunity and adds the dollar amount, it counts.

In the CRM, we pass on the SDR’s name to the Opportunity created, and then run a report at the end of the quarter for all sales pipeline created that quarter (including those that were created that quarter and are now closed won or lost) and filtered by the SDR’s name.

The total amount multiplied by 0.15% is what is payable to the SDR as pipeline bonus.

Let’s say that the SDR turned in a total of 24 meetings of which 17 went on the pipeline, and the average deal size was around $100,000. That means that the SDR created $1.7million in pipe that quarter and earned $2,550 that quarter or an average of $850 per month.

So far, the SDR has added $1,050 worth of bonuses to his monthly pay and overall base salary. Considering the $1.7 million in sales pipeline he generated that quarter, the $3,350 we compensated that SDR for the quarter (including meeting bonus) is a very tiny added cost.

Strategic SDR compensation 3: Revenue Bonus

Now we get to the real bottom line–actual, converted sales. Let’s say the SDR consistently puts around $1.7 million in sales pipeline each quarter, and due to the improved quality of the pipeline, the sales rep can improve her closing ratio from 20% to around 25%.

Over a rolling period, she will close around $425,000 in sales performance each quarter.

Let’s say we pay the SDR $500 per $100,000 of sales won. That means the SDR is now getting around $2,125 each quarter in additional bonuses, or about $708 more per month.

That means, our SDR can now expect an average of $1,758 in additional performance bonuses each month. Or in annual terms, this adds $21,096 in variable compensation in addition to his base pay.

The SDR as a Professional

If we stop thinking of the sales development profession as an “entry level job”, similar to the way working in the “mailroom” used to be looked at, and actually see it as a high-skill craft with countless opportunities created, our sales reps will benefit and our company as a whole will benefit.

We need a holistic transformation of our view of the SDR profession—we need to train them, provide them with the resources they need, set the right metrics and KPIs, compensate them, and coach them as the high-skilled professionals they can and should be.

The SDR Funnel Math – Fix the Key Metrics Before You Increase the Size of Your SDR Team

sdr funnel math

As we work with clients, we hear the same questions over and over again: Should we hire more Sales Development Reps (SDRs), or sales reps? Or both?

And our response has been invariably the same—it depends.

  • If your conversion metrics are all good, then by all means hire more.
  • If not, fix your conversion metrics first before you hire more. Otherwise, you are throwing good money after bad.

Let’s say your sales goal is $10 million and your average deal size is $100,000. This means your reps need to close 100 deals. So far, looks pretty straightforward.

Here is where the “it depends” part begins.

·   If your average closing ratio is 10%, then you will need 1,000 opportunities in your pipeline

·   If your average closing ratio is 20%, then you will need 500 opportunities in your pipeline.

Just this one metric alone clearly demonstrates that improving the quality of the pipeline reduces the burden on both your sales and SDR teams. SDRs don’t have to book as many meetings, and sales reps don’t have to struggle to work with so many prospects at the same time.

It also makes it easier to see why you will not need to hire more SDRs or sales reps with the second scenario, while you are more likely to believe you “need” more of both with the first one.

The SDR Funnel Math

But, I’m sure you know it’s more complicated than that.

Working with the conventional three-tier funnel model (Top, Middle, and Bottom), Marketing is supposed to keep filling the Top of Funnel (TOFU) with qualified prospects so that enough go to the Middle of the Funnel where your SDRs call to qualify and book appointments for the Sales team, which works on the Bottom of the Funnel to push prospects through the funnel to a close.

For this article, we will focus on understanding what is happening in the Middle of the Funnel.

Let’s say on average, each of your SDRs can book around 5 meetings a month, of which sales accepts about 70%, and of those Sales accepted meetings, about 66% make the meeting (one-third are no-shows or cancellations because the prospects didn’t see any real value in making the meeting).

Also, let’s say the average deal size of these leads were they to convert is about $75,000

So, the pipeline value that your average SDR is building for the sales team is =  5 meetings x 70% acceptance rate x 66% show rate x $75,000 or  $173,250/month per SDR. Not much, and may be the reason why you were thinking of hiring more SDRs.

However, before adding to your payroll cost, think of what can be improved.

What if I showed you that you can increase the average pipeline to $484,500/month per SDR—a 180% increase in pipeline built?  Would you first look into that to see if that were possible, or still go ahead and waste time and money hiring more SDRs?

I am going to assume you said you wanted to first look into how you can increase the average pipeline built by 180%.

Key Metrics

Looking at our formula above, there are four key metrics we can improve:

1. Average meetings set by a SDR per month

2. Average Sales acceptance rate (a measure of quality of the meeting)

3. Average meeting show rate by prospect (also an indication of the quality of the meeting set)

4. Average deal size (again, a measure of the quality of the meeting)

Improving any one of these metrics will improve the average pipeline size built by each SDR. Improving all four metrics will dramatically improve the average pipeline built by each SDR.

The Before and After In Action

Look at the chart below:

We see that we are making small improvements in the range of 20% (for appointments set per month/SDR) to about 36% (number of appointments accepted by Sales).

And yet, the cumulative impact is 180% increase in sales pipeline built

Not just Pipeline Metrics—Sales Metrics also Improve

In fact, you can argue that if you improve the quality of the pipeline (highly qualified and more motivated prospects in the pipeline), then the average closing ratio of your sales reps should also improve. After all, they are meeting with the right people who are also highly engaged.

If we assume we improved the average closing ratio by 25% (from 20% to 25%), then actual booked sales will improve by a whopping 250%–just from the above quality tweaks.

Training and Support–The Secret Sauce to SDR Funnel Math

Improving the SDR metrics and understanding SDR Funnel Math is the key to improving sales metrics. And the secret sauce to that is training and optimizing your existing SDR team.

Before you hire more people, fix these metrics. As an old mentor of mine used to say, “First, Nail it. Then, Scale it.”

Would love to hear your thoughts on this. Let’s schedule a call to see if we can help you analyze your current SDR operations and see if there are any gaps that need to be addressed. Visit our homepage to learn more about us.

The Hidden Cost of Sales—Low SDR/BDR Performance

cost of sales

The Story Behind Rising Cost of Sales

According to HubSpot, the cost of new customer acquisition (cost of sales and marketing) has increased by 60% over the past six years or so.

What makes this even more alarming is that when we combine it with another finding. A 2019 Accenture study reported that 80% B2B buyers are switching vendors at least once in a 24-month period.

Let’s add a third stat: a 2019 Salesforce study found that 57% of sales reps weren’t making their numbers.

I don’t know about you, but I am having a hard time reconciling these numbers. If 80% of B2B buyers are changing vendors within 24 months, how are 57% of sales reps having trouble meeting their numbers? Shouldn’t it be easy to win new customers?

Looks like there is more to the story here.

And to tell that story, I have to tell another one first. In the 1990s (feels like a century ago, doesn’t it?), Dell Computers was growing faster than any other company—at least 100% every year for many years. Needless to say, they didn’t miss their numbers much.

One strategy Dell used to grow that fast was to cut sales territories by half each year. Sales reps screamed in anguish how this would kill their income…and each year they made more money than ever before.

Why? Because they got to know their customers more intimately when their territories were smaller. They focused more, learned more, and became far better resources to their customers—who became raving fans of Dell and wouldn’t buy anything else.

It seems that’s the story with every company that is growing fast—Zoom, Amazon, Netflix, HubSpot, Salesforce…They all know their customers—deeply. They, therefore, don’t lose customers, and their customers only buy more and rave about them to others—which means their cost of customer acquisition is going down, not up.

The “Cost” in Cost of Sales

With that setup, let’s focus our discussion on what we mean by knowing your customers deeply. And for our discussion, I’m going to focus on just the front end—sales and marketing.

In most B2B companies, and especially those that sell to enterprise accounts, their “front end” consists of Marketing, Sales/Business Development (“SDRs”), and Sales. Each is focused on a specific operation. Marketing builds the top of the Funnel, SDRs focus on the middle funnel, and Sales focuses on converting the bottom funnel into revenues.

Unfortunately, In many of the companies we work with, only their best sales people truly understand their customers, and thereby close the largest deals and have the highest win rates. Alas, they make up maybe 10% of the entire “front end”. The rest barely know anything about their customers, let alone deeply understanding them.

The inevitable consequence of that lack of customer understanding? 

Marketing content that is too generic and doesn’t draw the right customers; SDRs not getting leads and sending their own generic emails that mostly lead to more unsubscribes; meetings that are canceled because prospects don’t see the value in keeping them; underwhelming pipelines forcing sales reps to spend their time generating their own leads rather than moving the sales pipeline to close.

In short…more sales reps missing their targets, leading management to hire more SDRs and sales reps in the hopes of making their numbers, leading the cost of sales to rise each year.

Before you spend more…

As yourself, in your company, who really deeply understands the customers? Who can talk for hours regarding the customers? Who is that person, “you can turn on your recorder, sit back and let them talk?”

How many will describe your customers in terms of: what they struggle with each day, what their priorities, concerns and goals are; how their company makes money and how they get compensated; what they have worked on for so long to get right, and what they are afraid could change to disrupt that? How many know where the customer’s industry is headed, where new competition, regulations, and other threats are?

Does your marketing team understand this clearly? Is that what they are building their marketing content on? Are they driving the right prospects into the top funnel for your SDRs?

Do your SDRs know this? When they pick up the phone and call a senior decision maker, do they clearly understand how they can eliminate the key pain/cost/risk of that person and improve their numbers by “X” amount? Can they articulate that? Can they book and keep meetings with highly qualified senior decision makers?

At the very least, hold off spending more until you know the answer to these questions.

The Hidden Cost of Sales

That is the hidden cost of sales for most companies—their SDRs/BDRs don’t really know how to engage their prospects to get quality meetings booked for their sales reps.

As a result, pipelines are not sufficient to hit revenue targets and too many of your sales reps are spending too much of their time prospecting rather than moving leads in the pipeline towards a successful close.

Unsupported SDRs/BDRs are the hidden cost of sales and there is a simple solution to fix that—support them with these SDR services.

Let’s discuss your specific environment, challenges, and potential solutions:

Quadrant 3: Customer Retention and Upselling to Drive Sales

customer retention

Quadrant 3 is all about encouraging existing customers to buy new products; generally upgrades, add-ons, and bundles. In general, the goal is to increase the number of products your customers use by about 15-20% per year. It may seem like a big ask, but keep in mind that, apart from Quadrant 2, these buyers have the lowest perceived risk — they’ve bought from you before and are going to be a lot more willing to buy from you again, studies show. Meanwhile, the chances of selling to a new prospect are between 5 and 20%; selling to an existing customer skyrockets to as much as 60-70%. 

It’s crucial to invest in 3rd Quadrant prospects as it’s been proven to yield massive ROI. Bain & Company found that even a 5% increase in customer retention can lead to a 25-95% ROI. That’s a five-fold return. In the following sections, we’ll be looking at the strategies industry leaders are using to drive Quadrant 3 sales. 

Customer Support Strategy

The reduced risk factor for Quadrant 3 prospects is dependent on their elevated trust in your company. Make sure your customer support strategy continually renews their trust in you and keeps you fresh in their minds. 

This can be facilitated by having a scalable support infrastructure like chat and self-help portals that can offer painless and quick support to customers as they learn and use your products. You should also maintain good communication with customers in order to stay relevant and keep them educated on your products and updates as they come out. 

Keeping close contact with customers also yields valuable insights into their buying behavior, which can help when it comes to pitching new products to them down the line. Knowing your customers well (including their needs and pain points) translates into knowing what to suggest to them to make their processes more efficient. 

Customer Retention Strategies 

Quadrant 3 sales rely on offers like bundles, packages, and deals that incentivize customers to buy more products from you. Make sure you figure out which products are best paired together and create promotions that offer added value to the original products your customers want to buy. 

Automation can play an important role here, too. Use it to promote targeted marketing campaigns to customers based on what they’re already buying. For instance, if a customer is already buying product X, use marketing campaign A, and if they’re already using products X and Y, use campaign B. 

Sales reps should also be invested in these strategies. Train them on which products are to be recommended together and on how to pitch an additional product without coming off as too sales-y; customers want to know that you’re on their side and trying to add value to their purchase rather than simply selling to them. Management can build a compensation plan around account penetration to encourage Sales reps to fine-tune their upselling capabilities. 

Upselling Strategy

Everything discussed previously has essentially been strategies that support upselling, which is the main goal in Quadrant 3. Upselling is when you recommend additional products that will complement those the customer is originally buying. HubSpot has outlined some key strategies that support upselling and will ultimately drive Quadrant 3 sales. 

First, determine which product combos get the best results, both in sales and in customer satisfaction. You want to find combinations that make sense to customers when pitched (and can be backed up by proof, like with case studies or infographics) and that will ultimately add value to the customer’s original purchase. Tracking KPIs and asking for customer feedback can give some direction to these efforts and highlight which pairings you should be pushing. Oftentimes, segmenting customers by personas can help fine-tune which recommendations to provide and to whom.

Make sure your upselling strategy is based on integrity; you’re only hurting yourself if it’s done with anything less. Though upselling is generally very profitable, if customers sense they’re being taken advantage of or don’t find added value with the extra purchases you recommend, they’ll lose faith in your business and might churn. The products you upsell must be chosen with customer experience in mind, with the main goal of making them better, easier, or more efficient. 

To support upselling, make sure to consistently introduce new products that can complement one another. Releasing a new product every 2-3 years is recommended in order to keep complementary items current and relevant. 


Quadrant 3 is a great place to invest selling resources and if your customer retention and upselling strategies are well-thought-out, it can bring in considerable ROI. Driving sales in this Quadrant is all about investing in an excellent and helpful customer support strategy that will build trust between your customers and your brand. Some key customer retention strategies can also help boost your upselling capacities to reach your maximum Quadrant 3 selling potential. 

You can find more resources like this on the SOMAmetrics website under resources. Or click here to schedule a call if you would like to speak with one of our associates.

Quadrant 2: Customer Retention Strategy for Increased ROI

customer retention

Hubspot has shown that customer acquisition costs have skyrocketed by as much as 60% in recent years, making the customers that you do have that much more profitable to your business. As McKinsey notes, if you’ve already spent a sizable amount of time and money to acquire a new customer and they churn early in the process, you’ve lost out on the full potential revenue of that customer. Their study goes on to show that what’s separating top-performing companies from their competitors today is how efficient their customer retention strategies are. 

Customer retention is hugely important in today’s business world. Falling under the 2nd and 3rd Quadrants of the Four Quadrants of High Growth model, customer retention is all about encouraging existing customers to buy more一 either of what they’re already buying (Quadrant 2), or related products (Quadrant 3). Optimizing your customer retention strategy can lead to considerable perks.

Many companies tend to take their paying customers for granted, placing most of their marketing budget in Quadrant 1 and favoring customer acquisition over retention. Invesp found that 44% of companies have a greater focus on customer acquisition whereas only 18% focus on retention. It’s only when unsatisfied customers churn (and their revenue is halted) that these companies realize how crucial it is to invest in Quadrants 3 and 4. More importantly, they see how important it is to see all the Quadrants as important sources of revenue rather than just the first. In a study by Invesp, 70% of informants reported that it is cheaper to retain than acquire a customer, and indeed, existing customers are both 50% more likely to try new products and 30% more likely to spend more on them than new customers. Customer retention can be a game-changer if you invest in it. Bain & Company found that even a 5% increase in customer retention can lead to a 25-95% ROI. That’s a five-fold return. 

Fortunately, there are a series of proven strategies that today’s industry leaders are using to boost customer retention and drive Quadrant 3, all of which will be discussed in the following sections. 

customer retention

 Customer Support Strategy

Your target audience in Quadrant 2 already uses your products and is familiar with your brand. In order to promote the likelihood of them ordering more from you down the line, make sure you have excellent customer support. You want to develop their trust in the idea that your company is helpful and easy to work with. That way, they’ll be incentivized to become more involved in your offerings and might even become open to buying other products (i.e., joining Quadrant 3) down the line. If customers are unsatisfied with your company after purchasing from you, they’ll be highly unlikely to order any more from you. Conversely, customers that feel well-connected to you through good customer support will be all the more likely to engage with promotional offers or discounts to buy more. 

Remember that, from your customers’ perspective, everyone who works in your company is there to support them一 that includes Marketing, Sales, and everyone else, for that matter.

Also, remember that the best support strategy is to continuously educate your customers on how to use your product better to realize the returns they are looking for.

Customer Journey & the Buying Process

Current customers who have already vetted and approved your company are among the most valuable contacts for marketing campaigns. Make sure to keep your brand at the top of their minds even after they’ve made their initial purchase with you. The best way to do this is through email marketing一 by offering them promotions, discounts, or even premium services as a perk for buying more. Try to send at least one promotional email a month to keep connected with your customers and make sure these campaigns incentivize them to buy more. Update customers on new features that increase ease of use and efficiency and let them know about related products they may be interested in. 

The buying process in this Quadrant should be as simplified and easy for the customer as possible. On your end, too, it should be very low-touch and standardized; automate as much as you can and shoot for the majority of your purchases in Quadrant 2 to be completed without the direct involvement of a Sales rep. The operations should resemble a self-serve portal where customers can easily order more of what they want and have those orders fulfilled immediately. Automate pricing, contracts, and order fulfillment to ensure the buyer’s journey stays as seamless as possible. 

KPIs & Strategy Sharing 

As with any business strategy, the best way to improve your effectiveness is by measuring and analyzing the right Key Performance Indicators (KPIs). McKinsey found that customer retention success is best measured through customer-oriented metrics, such as website traffic, customer engagement time, response time, and conversion rate. However, other figures matter quite substantially here. The customer experience is important and metrics in customer frustration (perhaps with bugs on the website or with the products), a slow load time, or a poor onboarding experience can all highlight crucial areas that may need improvement. 

As these KPIs are analyzed and improvements are made based on them, make sure these valuable sources of information are not limited to just part of the company. Make sure that customer insights are shared across the entire organization, and specifically mutually updated by the Sales, Product, and Marketing teams. Feedback of this type will ensure an overall and constant improvement in customer retention that is propelled by a concerted effort across multiple departments. 


These days, it’s becoming increasingly more costly and time-consuming to acquire new customers, making it all the more important for companies to tap into the full potential of their existing customers in Quadrants 2 and 3. Quadrant 2 is all about encouraging customers to buy more of what they already use, and the key to maximizing this customer retention can be found through the following steps:

  • Grow trust in your company through excellent customer support 
  • Simplify and incentive the buying process
  • Track KPIs and share customer insights across the company 

Considering that even a 5% increase in customer retention can lead to a 25-95% ROI, customer retention is a great place to commit resources and boost sales. You can find more resources like this on the SOMAmetrics website under resources. Or click here to schedule a call if you would like to speak with one of our associates.

Three Ways to Categorize B2B Buyers

There’s a few different ways we like to categorize buyers. Though they are by no means fool-proof indicators of any individual’s behavior or preferences, these classifications can help us organize the strategies we use to educate different prospects at a more broad, macro level. 

In this discussion, we’ll be looking at three different categorizations of buyers, each of which will influence the content and strategies we use to educate them and move them along the funnel; 

  • Psychographic Buyer Types
  • Generational Differences
  • Buyer Readiness

Psychographic Buyer Types

The Psychographics of a B2B buyer tells us that person’s internal attitude towards change. Different people have widely varying openness to change一 from those who are the first to try something new, to those who will never willingly try something new, and to those in between.

Geoffey Moore, best selling author and leading B2B high tech marketing thought leader, describes three types of B2B buyers in his classic book, Crossing the Chasm.


Visionaries actively seek change and are constantly looking for a significant competitive advantage, a capability that does not exist yet, or a “game changer” that nobody else has. They like to see improvements in order of magnitude (5X, 10X) and cost is rarely the priority. Unlike the following two types, they are willing to accept projected ROI.

The messages that engage Visionaries are things like; game changer; dramatic; the first; the only; X times faster/better; cutting edge; “X factor.”


Pragmatists take pride in being rational, practical, and objective in their decision-making process. They accept change as inevitable but do not precipitate it, and they don’t believe in “game changers.” They consider themselves rational and objective and are willing to take some risk for a proven level of reward. When researching solutions, they look for demonstrable incremental improvements, case studies, and quantifiable ROI. Importantly, the cost is not the primary concern, but it is factored in the ROI calculation.

The messages that engage Pragmatists are things like; proven; verifiable; demonstrable; incremental; have x number of the top 10 companies as customers.


Conservatives hate to change unless forced to do so due to regulation, customer demands, obsolete products, etc. They do not believe that things will get better. In fact, they really believe that things are getting worse, more complicated, harder to use, and expensive. 

For this group, cost and brand are everything. They typically buy the cheapest of something they already use all the time. They hate taking any risk, resist change, and deeply believe that the best things in this world have already been invented. They want things to remain the same—forever if possible. They don’t trust or like technology and hardly ever willingly embrace it. 

The messages that engage Conservatives are things like; oldest, most used; most popular; most trusted; award-winning; since 19XX.

Generational Differences

In addition to the psychographic element of a B2B buyer, generational differences add a significant layer of complexity in designing our marketing campaigns. The three dominant generations in the workforce today are Baby Boomers, Generation Xers, and Millennials, all of whom have had majorly different experiences and involvement with technology and culture. These differences will influence the type of marketing that will most engage them.

Baby Boomers

Born between 1946 and 1964, Baby Boomers tend to be highly individualistic and grew up in an era when “A-type” personalities were highly admired by employers. They are therefore generally very competitive in the workplace and not as collaborative. When buying, they generally prefer vendors that have extensive networks, and that are willing to let them access those networks.

Compared to the two other generations, they do the least amount of online research, preferring to use their networks to find new vendors. Unlike later generations, Boomers are more likely to want to talk to someone in real time, so it’s important to be reachable by phone by displaying contact info readily on your website and having a live person on the other end to answer it. Boomers also prefer conferences and webinars because these present venues that allow them to network.


Born between 1965 and 1980, Gen Xers like to see data or evidence of a claim before moving forward with a solution. They seem to be more focused on improving organizational outcomes and become the most interested in productivity increases, process improvements, and revenue gains. In accordance with this, they will need to see demonstrable evidence of any claims you make during the Marketing process. 

Gen Xers are tech-savvy and don’t have a problem with any digital channel; they will comfortably chat, email, text, and call. They also don’t mind attending conferences and other physical events to learn about solutions. Importantly, while communication doesn’t have to be formal, Gen Xers expect it to be professional.


Born between 1981 and 1996, Millennials make up over 70% of the workforce today. Roughly 51% of all B2B decision makers today are Millennials. When searching for a vendor, they tend to look for characteristics surrounding a company’s values. They want to understand the vendor’s vision on that particular subject and whether it is something they can support. In fact, a survey from Deloitte found that 90% of Millennials today view the success of a business through more factors than simple performance; they’re likely to take into consideration the employee satisfaction, the company’s integrity, and environmental concerns where applicable. 

Millennials prefer to engage digitally, preferring a Zoom meeting to a live one because they find it more efficient. They need lots of content in all types of digital media—documents, videos, podcasts, recorded and live webinars, and more. They’re also much more receptive to chatting casually and virtually than other demographics. As such, chat boxes on website pages can go a long way with them.

Buyer Readiness

As explained in our white paper on Prospect Education, a third way to classify Prospects is by the stage of buyer readiness they’re at in their buyer’s journey. The levels of Buyer Readiness indicate how aware they are of their problem and how engaged they are with finding a solution for it. We can use this classification as a way to further narrow down the messaging we should be sending to Prospects, as not every Prospect is at the same level of Readiness as others, and will therefore need messaging that reflects how far they are along the buyer’s journey. 

Level 1: Prospects with No Clue

These prospects are oblivious and unengaged, just beginning to feel and take note of a pain point in their business. However, they may not know that it’s a problem yet or, if they do, they won’t know how to fix it. They’ve begun some light research into the symptoms of their problem and are starting to understand the various potential options they have to solve it down the line. For those that are clueless, the marketing challenge is immense. You need a way to deliver messaging to them, which generally comes from Lead Generation content such as blogs, infographics, or online ads.

Level 2: Exploring Prospects 

Exploring Prospects are interested but not yet engaged. They’re fully aware of the problem they’ve been experiencing and are actively seeking to solve it. They’ll be researching all of the products available to them and interacting the most with those whose content is the most informative and relevant to their needs. 

At this stage, they should have ample access to relevant and helpful information in order to learn more about how they may solve their problem. They likely won’t be ready to talk with Sales until they’ve learnt enough about the issue and their options to solve it.  

Level 3: Actively Searching Prospects

Actively searching and fully engaged prospects are deep in their buying journey and have likely narrowed their list down to a few options that have stood out to them along the way. They’re now searching for the final information that will let them decide on which solution to employ to solve their original problem. 

Content at this stage should be targeted for those at this advanced level of buyer readiness, like comparisons between your product and your competitors’ or more in-depth content like case studies and white papers. 

It needs to be pointed out that a “Contact Us” form will not cut it here. You must provide them with a way to schedule either a demo or a call with one of your sales reps, on their own and see that the meeting is set on their calendar as confirmation.


These three categories (Psychographics, Generations, and Levels of Buyer Readiness) should greatly inform how you target your messaging when educating Prospects. Though we covered the essential information of each category and what messaging works best for them here, you can read a much more in-depth profile of these marketing strategies and possible solutions for your company in this white paper. 

Additionally, you can find more resources like this on the SOMAmetrics website under resources. Or click here to schedule a call if you would like to speak with one of our associates.

How Prospect Education Can Drive the Sales Funnel

The Sales Funnel is a way of defining the process. Prospects will go through when getting educated enough to want to meet with Sales. In the following sections, we’ll be breaking down the three stages of the Sales Funnel that make up the buyer’s journey. Additionally, we’ll highlight which Prospect Education content will be the most helpful to Prospects at each stage. Content is becoming increasingly important in the B2B Marketing world today. Studies have shown that the use of Prospect Education content is now one of the top strategies for 77% of B2B marketers. 

Because these stages relate to different levels of engagement and awareness, the content that should be sent out to buyers will differ depending on what is the most relevant to their interest level. What’s important to note here, too, is that actively searching and fully engaged prospects will enter the funnel from the top like everyone else一 but will then progress through the stages very quickly, hence why it’s so helpful for Marketing to nurture Educated Prospects to meet with Sales.

Prospect Education is the best way to drive the Funnel; attracting more prospects to the Top and helping others advance to the Bottom and eventually on to meet with Sales.

prospect education sales call

Top of Funnel (TOFU)

The Top of Funnel (TOFU) is where your prospects begin their buyer’s journey. Depending on what level of Buyer Readiness each individual prospect is at, the speed at which they progress through the funnel will vary. 

Before prospects can reach the TOFU stage, they must first get acquainted in some way with your company. Demand Generation content is broad, less targeted content that’s meant to attract new prospects to your funnel. This type of content should be created to attract the most people possible and to be broadcasted easily to a large population. The emerging strategies Marketers use today are mainly SEO (optimizing access to blogs, podcasts, or other content) and online ads (perhaps on Google, Facebook, or YouTube), which can all attract attention to, or at least spark awareness of, new products. 

In engaging with this material, the Prospect is sent to a landing page that describes the asset and if they are interested, they’ll fill out their contact information (typically start with just first name, last name, email, and title). Then, they’ll get added to the top of funnel. 

For these unaware Prospects, having online content readily available is the only way for them to find their way into your funnel. Additionally, for Prospects who are already aware of their problem and are close to purchase-ready, letting them find your content is the best way to escalate them quickly through to the Sales level.

Once a prospect is added to the top of funnel, they’ll therefore need quite a bit of education and nurturing before they may graduate to later funnels, and they often repeat the cycle in TOFU a couple of times before progressing. 

What prospects need at this stage is lead generation content, which is generally shared with them through email nurturing. This will still be very broad and educational in nature一no need to give them the hard sell just yet. Instead, it will build up trust over time as they slowly start to recognize their problem and realize the power of your solution. Light, easily digestible content like relevant blogs, short quizzes, or engaging infographics can all educate buyers at this level. 

Middle of the Funnel (MOFU) 

As TOFU prospects engage with the content you send them in their targeted nurture emails (clicking, downloading, etc.), they’ll eventually work their way down the funnel to the middle, at which point the marketing content to be sent to them will become a little more specific and targeted. 

MOFU prospects make up about 20-30% of your target market and have generally already begun to have conversations with Sales to assess their options. At this point, Marketing’s job is to give them all the information they need to see why your company is their best option. This content will be more specific to your solution in particular and can take on a more aggressive sales approach. Content like buyer guides, case studies, white papers, third-party analyses of your product, and competitor comparisons are all good options for prospects in this range.

Bottom of the Funnel (BOFU)

Once the prospect has narrowed down their options to a select shortlist and has started looking at pricing, they can be moved to the more Sales-oriented level at the bottom of the funnel. Clicking on the demo/meeting request button will also instigate this. BOFU prospects represent around 3-5% of your target market and are already fully aware of their problem and of their options in resolving it一they just need to find which product is the best fit. 

Actively searching prospects will advance to this level quickly if Marketing educates them effectively when they initially reach the TOFU. Otherwise, prospects can reach this level through extensive prospect education during their buyer’s journey. 

BOFU engagement will lean more towards the Sales side of Marketing, with the ultimate goal being to book a chat with a Sales rep and sign a deal. Chats about pricing, appointments, and deliverables, and customer testimonials will all be relevant to BOFU prospects at this point.


Having the right content in Prospect Education available to Prospects during their buyer’s journeys will help them advance down the Funnel and encourage them to eventually meet with Sales. It’s important to have content available that will meet them where they are in their buyer’s journeys. To read more about this type of Prospect Education, and why it’s so important post-Pandemic, click here.

You can find more resources like this on the SOMAmetrics website under resources. Or click here to schedule a call if you would like to speak with one of our associates.