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:

sdr funnel math

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 in a 2019 Accenture study reporting that 80% B2B buyers are switching vendors at least once in a 24-month period.

What the heck, 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 is it that 57% of sales reps have trouble making 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—growing 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.

cost of sales

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 schedule a call so we can 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 retention

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. 

Recapping

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. 

Recapping 

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.

Quadrant 1: High Growth Sales Strategy

sales strategy

According to Hubspot, customer acquisition costs have skyrocketed in recent years, increasing by as much as 60%. What this means for B2B companies is that it will be crucial, now more than ever, to have an effective Sales strategy that will optimize customer acquisition and drive down costs. Customer acquisition falls within the first Quadrant of the Four Quadrants of High Growth model, which is a highly effective sales strategy that helps B2B companies optimize their Marketing and Sales resources through segmentation to achieve the highest ROI.

Quadrant 1 is all about attracting new customers to the customer base, with a general goal of growing it by 15-20% each year. This is normally where companies throw the most money, especially as compared to the other three Quadrants, and because customer acquisition costs have only gotten higher in recent years, it makes sense to invest in a highly effective strategy that will use these funds as efficiently as possible. In the following sections, we’ll look at the strategies industry leaders are using today to drive growth in Quadrant 1. 

sales strategy

Content Strategy 

Since Quadrant 1 is largely about attracting new customers to your company, content will be the most important element of a successful high-growth sales strategy. The Marketing and Sales teams should come together to define what marketing content needs to be created to drive prospects through the various levels of prospect awareness, which range from completely unaware to engaged and actively searching. This content should be created with the goal in mind to produce the desired amount of Marketing Qualified Leads (MQLs), and so a level of automation is required here to provide prospects with the right content as they engage with entry-level materials. To read more about the Funnel Framework and how prospects progress through their buyer’s journey via content, click here

Hubspot has outlined the best content strategies we can employ to drive growth in Quadrant 1. Content marketing is quickly emerging as one of the most effective ways to reach new customers. Not only does it alert them to the existence of your company and expertise, but it also offers valuable, free, insights to them that will build their trust in your brand. Within this area, you can provide blogs, content offers such as ebooks or guides, and even videos that will all surface when prospects research their company’s pain points online. To drive results here, search marketing (both paid and organic) can be used to ensure your online presence makes an impact on your Quadrant 1 growth. 

Additionally, email marketing remains one of the most effective ways to directly reach and engage a customer base. Nurture emails can help convert new subscribers by delivering helpful information and slowly increasing brand awareness, and in later Quadrants, new product information and discounts can increase customer retention. 

Sales Strategy 

On the Sales end, having a broader, formal strategy is crucial to ensure you meet that goal of increasing the customer base by an annual 15-20%. This is done best by defining the qualification criteria that make a Sales Qualified Lead (SQL) and then by mapping these criteria into the Sales Operation and Sales Automation system. The automation of this process will ensure that Sales immediately follows up with SQLs, and a thoughtfully-designed compensation program can incentivize agents to drive the Sales Cycle through lulls. 

Onboarding & Customer Support Strategy

Once we’ve reached a sale, the customer experience becomes only more important. The goal here is to turn new customers into happy and satisfied ones within 2-3 weeks一 and having a strong onboarding and customer support strategy can help here. 

Learning how to use a new product can be tricky, especially for working professionals who may not have much time to dedicate to their understanding of your process. According to Salesforce, a great thing to keep in mind when crafting your onboarding strategy is to keep it simple; streamline your instructional content so that only the most essential items are present during the first steps of the onboarding process. That way, new users won’t be deterred or overwhelmed when interacting with your products for the first time. 

Additionally, have an abundance of various materials available to them to reference during and after the process. This can include blog posts, video tutorials, instructionals, or even email sequences delivered over a set period following the purchase. To ensure things are going smoothly, it can be helpful to send out a follow-up email a couple of months down the line, which has the added benefit of delivering customer insights about the onboarding process. 

Overall, the process must be as quick and painless as possible for the new customers. At a broader level, it can be helpful for the onboarding team to be organized around facilitating an efficient process for the customer; at the start of the process, outline each key component and assign agents accordingly. This will allow them to complete the onboarding process efficiently and with the highest level of accuracy. 

After the onboarding process is complete, make sure that the customer support is there to keep customers happy and loyal to your brand, important needs that fall under Quadrants 2 and 3

Recapping

Quadrant 1 is all about attracting new prospects to your customer base, and creating a high-growth sales strategy can drive ROI in the face of increasingly expensive customer acquisition costs. Having an optimized content strategy, an automated sales strategy, and a simple, easy-to-use onboarding process can all drive sales Quadrant 1 and prime customers to remain for Quadrants 2-3. 

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.

Recapping

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.

Educating Prospects: Why It’s Crucial in 2021

The Pandemic changed how we do business in countless ways, and the business leaders who have thrived post-Pandemic have been those who have adapted their strategies to the new demands of their clients. In any business world, but especially that which we’re seeing today in the wake of the Pandemic, educating prospects is crucial in order to ultimately meet with a Sales rep. In the following sections, we’ll be talking about how buyer behavior has changed due to the Pandemic and how the savviest (and successful) thought leaders in B2B Marketing have adapted their Prospect Education to thrive in today’s new business landscape. 

educating prospects

How the Pandemic Changed Buyer Behavior

When the Pandemic hit, the business world was pushed almost completely into the online realm. This reshaped how B2B buyers and sellers interact with each other and business in general. Since much of the buying process went virtual, many buyers shifted their approach to online buying. Reportedly, 68% of B2B buyers now prefer to do most of their product research online—before ever meeting a Sales rep, and even partly as a prerequisite to meeting one. 

When Prospects start realizing they have a problem in their business, they’ll go online to research what it may be and how they may solve it. Often, they’ll come across a variety of products and will then research each promising one to narrow down the ones they’d like to talk to a Sales rep about. During this buyer’s journey, they’ll engage with different types of content that they may come across online; blogs, white papers, videos, infographics, and more. 

Buyers today are used to finding most of their product information online and independently, meaning that they’ve taken much of the Prospect Education you need them to have about your products into their own hands. This can be either a good thing or a bad thing, depending on how you react to this shift. If you have an abundance of relevant, helpful content out there for them to find in their research, this could actually optimize your Sales process. However, the content they use to make a decision could just as easily be that which they find on your competitor’s site… 

What this means for Marketers is that it’s important, now more than ever, to meet Prospects at every stage of their buyer’s journey with relevant, helpful content that will give them the information they need to advance down the Sales Funnel. 

The Three Levels of Buyer Readiness

One way we like to classify Prospects is by the stage of buyer readiness they’re at in their buyer’s journey. As Prospects move along the buyer’s journey, they follow a fairly predictable route that begins with them being oblivious to their problem and eventually ends with them realizing their issue and actively searching for solutions. It’s crucial to understand and break down the various levels that each buyer traverses along this journey to target them with the correct content for the stage they’re currently at. In other words, someone who isn’t currently sure of what problem they’re having isn’t going to want to see a case study just yet. 

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, but 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 messages 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 to learn more about how they may solve their problem. They likely won’t be ready to talk with Sales until they’ve learned 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.

Why it is Critical to Educate Prospects

As mentioned above, prospects these days like to complete the majority of their buyer’s journey before they meet with a Sales rep. In fact, a study found that around 70% of B2B buyers both define their needs and locate various solutions before agreeing to meet with reps, meaning that what buyers today want is not to be sold to, but instead to be assisted along their purchasing process with the right information that will supplement what they already know. 

It is critical to educate prospects along their journey so that they have all the information they need to want to book a meeting with Sales. We already know that this is the case with B2C; it’s been shown that consumers are 131% more likely to buy after being exposed to early-stage educational content. Keeping in mind the human behind a B2B decision-maker, we can apply this knowledge to the B2B realm to understand just how important prospect education is. Indeed, a study found that 96% of companies agree that customer education is important, whereas another study showed that 69% of B2B marketers point to relevant content as the most effective tactic for lead nurturing. In short, the more educated prospects are when they meet with a Sales rep, the higher the likelihood that they’ll make the deal. It’s up to marketing to educate prospects so that the leads that Sales receives are all actively searching for solutions and are fully engaged with the product. 

In a day of a majority-virtual purchasing process, the products with the most relevant content will win the most meetings with Sales reps and ultimately earn the most closed deals. Since actively searching and fully engaged prospects are the readiest to buy, the only question now is from whom.

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 Things Sales Enablement should include in BDR Training Packs

In the increasingly competitive market today, connecting with leads can be challenging for BDRs. Often, the difference between a successful cold call (one that ends in setting an appointment) and an unsuccessful one is as simple as how efficiently the Business Development Rep (BDR) can talk with prospects. Often, BDRs are the first people that prospects will interact with during the purchasing process, meaning that their training must be a top priority for any Sales Enablement program.

Keep in mind that most companies hire junior-level people to work as BDRs, who then have to talk business with people who are necessarily senior-level decision makers. Unfortunately, many BDRs simply don’t have the experience to lead effective conversations with senior-level decision makers and they struggle to engage them enough to want to meet with Sales.

As the first contact between your company and leads, it’s important that BDRs are educated enough on current business topics relevant to your prospects’ industries to have meaningful and efficient conversations with them. Sales Enablement programs can craft BDR training packs that’ll give them the information they need to quickly qualify leads and schedule appointments. The following will cover the three most important types of content Sales Enablement should include in BDR packs. 

BDR Training Content #1: Industry Briefs

Industry Briefs give BDRs the information they need to have relevant, insightful conversations with prospects about their industries. Intimate knowledge about the target industry is the first step in crafting compelling reasons as to why the product is relevant and to have meaningful connections with leads. 

Industry Briefs in BDR packs should describe the:

  • Industry at large
  • Growth Rate
  • Basis of Competition
  • Key Challenges 

When Sales Enablement gives BDRs this solid, broad basis of information, they will empower them to have interesting and helpful interactions with the leads they connect with. A knowledgeable and well-trained BDR can ultimately foster trust with your company and encourage leads to talk with Sales. 

business development representative having sales enablement training meeting

BDR Training Content #2: Persona Profiles

With the industry already in mind, Sales Enablement should also focus BDR training on the specific personas they’ll be reaching out to. That way, BDRs can come from a place of familiarity with a prospect’s industry while also connecting with them on a more personal level. Sales Enablement programs can give BDRs the focused and relevant information on each of the target persona types that will allow them to make more meaningful personal connections with leads, thereby increasing their willingness to talk with Sales. 

Persona Profiles in BDR packs should describe the persona’s:

  • Responsibilities 
  • Goals
  • Key Concerns

This information, in conjunction with a more broad familiarity with the lead’s industry, will give BDRs the insights to connect more efficiently with leads. In a market where buyers are becoming increasingly difficult to reach (especially over the phone), Sales Enablement’s efforts in this area will boost appointment set rates. 

business development representative training on how to create persona profile

BDR Training Content #3: Discovery Call Guides

With the above background information in place, the next important step for Sales Enablement programs is to equip BDRs with practical, usable strategies to employ when cold calling. Discovery Call Guides can boost the efficacy of BDR training packs by giving BDRs the skills they’ll need to direct conversations, quickly qualify leads, and set up appointments with Sales. 

Discovery Call Guides in BDR packs should give them:

  • Strategies to open calls professionally
  • Key messaging to use
  • Opening questions that will quickly qualify leads
  • Tactics to lead conversations to appointments with Sales
  • Voicemails to leave if applicable 

A recent study found that BDRs who asked 11-14 questions on a call had over 70% success rates, whereas those who had less suffered up to a 30% lower success rate. Having the right training can make a surprising difference in whether or not your BDRs book appointments. Discovery call guides are vital to standardizing and optimizing how BDRs engage leads over the phone. 

business development representative training to make discovery calls

Recapping

Effective BDR training packs can empower relatively inexperienced BDRs to stand out in today’s competitive business environment. Quickly making solid and personalized connections with leads over the phone is an important way to set appointments with Sales, and Sales Enablement can dramatically increase BDRs’ effectiveness in this role through optimized BDR training packs. For more information about Sales Enablement and BDR training, 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.

Sales Growth by the Numbers

Sales Pipeline Value

The value of your sales pipeline is the single most important factor impacting your sales growth rates. Therefore, increasing the value of your sales pipeline increases your company’s sales growth rates — it’s as simple as that.

Before we explain why, let’s take a step back and define what a sales pipeline is and what it does for a company. A company’s sales pipeline provides employees with a representation of their prospects’ progression through the sales process toward making a purchase. 

With that said, how can a company determine the value of its sales pipeline?

According to HubSpot, sales pipeline value can be defined as “The total value of every qualified opportunity in your pipeline.” Here, the emphasis is on qualified leads — leads that have the right budget to purchase, the authority to make purchasing decisions, and the motivation to purchase your product or service. Qualified leads are valuable because they are more likely to convert into sales than unqualified leads. 

Unqualified leads, on the other hand, lack the key characteristics we highlighted above. This means that they are less likely to work with your sales team and move through your pipeline toward making a purchase. 

All of this is to say that high-quality leads are crucial to increasing your company’s sales growth rates. To illustrate this point, let’s crunch the numbers.

Sales Growth by the Numbers

If you improve three key factors by 25% — your average deal size, average closing ratio, and average sales cycle — the result is a 73.6% increase in annual sales. The charts below provide a visual representation of this strategy.

Current Metrics Improve by Improved Metrics 
Avg Deal Size ($) 100,00025%125,000
Avg Closing Ratio 25%25%31.3%
Avg sales velocity (days) 12025%90
Impact of Improved Average Deal Size and Closing Ratios 
Current Sales Improved Sales 
Avg # of Monthly Meetings 1010
Avg Closed Deals/Month 2.503
Avg Sales/Month 250,000390,625
Increase in Sales 140,625
Increase Rate 56.3%

Impact of Sales Cycle Reduction  
Current Sales Improved Sales 
Annual Sales ($) 2,250,0003,906,250
Increase in Annual Sales ($) 1,656,250
Increase Rate 73.6%

As these charts demonstrate, these relatively small 25% increases add up to a sizable difference in sales growth over time. Ultimately, these charts illustrate that sales growth rates are impacted by a variety of factors, each contributing to the number of closed deals.

However, the keystone to increasing sales growth rates is increasing the number of high-quality leads in your sales pipeline. We’ll go into more depth regarding why this is true in the next section.

High-Quality Leads = Higher Sales Growth Rates

As we discussed above, sales growth rates depend on the number of high-quality leads in your sales pipeline, which means you need more of them to increase your sales growth rate. But how do you attract more high-quality leads without also attracting a ton of unmotivated, low-quality leads?

Never underestimate the impact of your content. Content plays a crucial role in reaching your potential customers — from catching their attention, to directing them to sites where they can learn more about your product, your content acts as the foundation of a more robust sales pipeline.

In part, this is true because buyers today expect to find all the information they need to make an informed purchase through vendors’ websites. Increasingly, buyers prefer using content and self-serve methods to make purchases, rather than speaking with sales reps. With this in mind, your content must provide useful and highly relevant information to your specific target market. This will encourage prospects to see your company as an authoritative resource and to seriously consider making a purchase.

Similarly, because high-quality leads are motivated and have the right budget and authority to make a purchase, they are more likely to close faster, at a higher rate, and at full price. All of these elements add up to a sales growth rate that is significantly higher than one that relies on low-quality leads.

To learn more about the value of high-quality leads and their impact on sales growth rates, download this paper.

Digital Marketing: The New B2B Sales Strategy

The Digital Transformation

Many marketing experts have discussed the current digital transformation in the context of the COVID-19 pandemic—by now, we all know that while in-person events are suspended, it’s necessary to use digital marketing to reach potential buyers. But a deeper understanding of this transformation reveals that this trend has been accelerating for years and that it will probably continue to shape marketing strategies for the foreseeable future. 

Technologies that were once used as simple cost-cutting devices are now becoming more central to revenue growth. In the past, technological transformation would have been spearheaded by CIOs or CTOs. Now, CEOs and executive committees are playing a more active role after recognizing technology as a key revenue driver. 

With this in mind, expanding technological capabilities is a matter of necessity for today’s marketers to deliver revenue growth for their company—which brings us to our next point.

The Growth Mandate

In the past, marketers might have been tempted to measure the impact of their strategies using metrics like clicks and email open rates. It can be difficult to measure the return on investment (ROI) of marketing strategies using these metrics, leading to a disconnect between marketing and the value of the business overall. 

On the surface, metrics like clicks and open rates might seem important—these are valuable tools to measure your company’s visibility online. However, these metrics are not directly correlated with revenue growth. Even if a million people click on your ads and open your emails, what matters most is how many people take it a step further than that.

This is further compounded by false positives, where anti-virus software clicks on every link you placed in your email to ensure there are no malicious links, thereby creating clicks that were originated by software, not your intended recipient.

This is at the heart of marketers’ new mandate—to drive revenue growth. As a marketer, you must target the people who are more likely to be interested in your company, research it further, and eventually start a conversation with sales. By taking full responsibility for delivering these Conversation Ready Leads (CRLs) to the sales department, marketers can decrease their cost per conversion. By focusing more narrowly on the target market, growth marketers can streamline the sales process as a whole and deliver on their mandate to increase revenue growth. 

How to Reach Buyers Online

Let’s consider the facts. First, we know that 77% of B2B buyers reported spending more time researching products online in 2020 before purchasing. We also know that 67% of buyers report relying more on content in 2020 to inform purchasing decisions than they did in the past. Finally, we know that today’s buyers are over 70% of the way through the decision-making process before contacting a sales representative, on average. 

Taken together, these statistics illustrate the increasing importance of content in the buyer’s journey. For the majority of their journey, buyers rely entirely on your content to help them determine whether your product is right for their company or not.

This begs the question: what do buyers want to see in your content as they are researching solutions online? One key element buyers look for is a strong understanding of their individual industry—76% of today’s buyers expect more personalized attention from providers based on their specific needs. They want to know that vendors understand what they need and can deliver specialized solutions.

Storytelling is another crucial element of content creation. You want your content to draw readers in, intrigue them, and make them want to know more about your product by the end of it. This is why well-written and well-designed content is key to increasing conversion rates. But it takes a significant amount of skill and experience to create this level of high-quality content—which comes at a high price.

The Cost of Compelling Content

Experienced marketers are well-aware of the costs of generating content in-house. To create the amount of content you need to feed your marketing campaigns, you have to hire three full-time employees. This includes a senior writer, a junior writer, and a designer—and that’s the bare minimum. 

Marketing budgets are already stretched thin as marketers try to deliver revenue growth in the era of the digital buyer. Wouldn’t it be great if you could focus your in-house team’s efforts on generating demand and delivering CRLs to sales while still receiving all the content you need to reach buyers online?

Fortunately, this isn’t a hypothetical scenario—with a subscription-based service to take care of creative content production, marketers can focus more of their efforts on more strategic functions. This is exactly what the Creative Content River™ does.

SOMAmetrics’ Creative Content River™ delivers all the creative content you need while saving you 55% to 58% of the cost of full-time employees. With content creation increasing in both importance and cost in the era of the digital buyer, the Creative Content River™ can increase your conversion rate and help you maximize your company’s growth. 

To learn more about generating creative content as a subscription, download this white paper

The Importance of Performing Regular Sales Diagnoses

Too often sales teams jump to quick, ineffective solutions when they see a drop in sales performance. By doing so, they fail to address the root cause of the problem. 

When quotas aren’t being met and sales performance is dropping, one typical response is to blame the salespeople. However, the truth is that performance issues can arise from a myriad of sources, including management and process issues.

The effective solution to fixing sales performance issues is to diagnose the problem before you prescribe a fix. To address drawbacks with sales performance, companies need a clear understanding of the issues they are currency facing.

An accurate sales diagnosis examines the current state of sales and any associated challenges. Sales diagnostics can identify hard-to-find issues, allowing companies to address hidden issues at the source and concentrate their efforts on areas that actually need work. 

Diagnosing Sales Performance Issues

When analyzing the health of your sales team, there are several factors to take into account. Some key components include revenue metrics (everything from revenue to order sizes to product popularity) and competitive position (what does your company do well, and where do your competitors typically win).

Companies should then take a look at their internal structure. Salespeople are motivated by reward structures, for example, so it’s important to take note of how they are compensated for better performances. If an adequate reward structure is lacking, this may contribute to low morale and decreased motivation.

Pricing is another important metric. Salespeople need to know more than simply how much the product costs. By knowing which parts are negotiable and which are not, leaders can recognize opportunities to offer discounts and therefore boost sales. 

When diagnosing sales performance issues, companies also need to make sure the right KPIs are tracked, visible, and managed. Some important metrics include number of proposals, average deal size, and sales cycle length. Tracking these KPIs is an important step toward uncovering where sales teams are falling behind. 

By collecting and analyzing this information, sales leaders can discover roadblocks and ensure their diagnostics will account for all contributing factors. They can then develop actionable recommendations to correct issues they discovered, thereby eliminating bottlenecks and increasing revenue.

On the other hand, if the right components and metrics aren’t tracked, leaders will have a hard time finding the source of sales performance issues and will struggle to improve sales performance. 

Why Regular Sales Diagnoses are Needed

A sales diagnosis should not be a one-time examination of your team’s performance; rather, sales diagnoses should be an ongoing, regular process to ensure the continual improvement of the sales team’s performance. 

After performing a sales diagnosis, leaders are able to find the source of their most pressing issues and chart a course for the future. However, after making these necessary adjustments, it’s important to continue to perform regular sales diagnosis to ensure everything is working as it should, and that the desired goals are being met on a continual basis. 

This is why it’s vital that leaders set measurable goals and establish clear expectations. In future sales diagnoses, leaders can track their progress and compare with their previous expectations to see if the team is on the right track. 

If a team’s goals are not met, or sales performance has not improved as much as leaders had hoped, ongoing sales diagnoses allow leaders to continually adjust their course of action and make corrections, ensuring that the sales organization keeps driving revenue growth.

Download the Sales Diagnosis Checklist and get started today.

Use Intelligent Sales Data to Grow Sales

intelligent sales data to grow sales

In today’s world, data is a vital element of any successful sales team—but B2B businesses should be smart about the metrics they track. Keep in mind, the goal of collecting sales data is to grow sales. It’s easy to get carried away collecting too much information, which can overwhelm a sales team.

Overloading people with data can be just as useless as giving them none. Not only does it waste time, but it also shifts the focus to the data itself rather than what the data was supposed to enable—getting more business. 

It’s common for businesses to invest in collecting all the data they can, without a clear plan for harnessing that data to substantiate decisions. While claims of being “data-driven” may have increased in recent years, according to Gartner, the reality is that only 54% of marketing decisions are being driven by analytics. This means that a significant amount of valuable resources are currently being wasted on unnecessary data collection.

This problem is only accelerating during the era of COVID-19 as more of the sales process is conducted online. According to a study from McKinsey, today’s sales leaders consider digital channels to be twice as important as they once were. With more data generated by these online interactions, it may be tempting to collect more and more data.

On the other hand, the goal of intelligent sales data is to encourage a prospect to do business with a sales rep. To accomplish this, intelligent sales data focuses on collecting data that enables a sales rep to be more relevant and useful to a prospect. With the right amount of data from the right sources, companies can implement this strategy to grow sales.

Intelligent Sales Data in Practice

Today, sales can no longer be driven entirely by intuition and a vague sense of the customer’s needs. This might have worked in the past, but as nearly 90% of sales today are conducted online, data is more readily available than ever before. Businesses need to use this influx of data effectively to ensure that they reach the right buyers online.

Intelligent sales data focus on the target market and nothing else. To put this into practice, a successful data-driven sales team will track all prospect interactions to inform the sales process. With data on what works for their target market—in terms of where prospects originated, how sales reps reached out, what transpired, and why—sales teams can make better-informed decisions in the future.

Sales should only reach out to leads that fit certain criteria. By the time a new lead is sent to sales, it should have already accumulated a sufficient score as a result of significant marketing activity. It should also be the right kind of lead in terms of the role and persona. The role, level of activity, where the lead first originated, and how long it took to convert are all the pisces of information that lead into intelligent sales data. This is how intelligent sales data increases the effectiveness of the sales department—by targeting leads that are more likely to result in sales, the sales team can reduce the amount of time wasted on unproductive leads. 

Plus, as we have shown in the Four Quadrants Model of High Growth, existing customers have proven to be an excellent source of revenue. Intelligent sales data should incorporate patterns established by current customers, which helps drive revenues. 

With the right information from several tools—including marketing automation, sales automation, and accounting automation—intelligent data can transform the sales department and increase revenues. It is critica, however, to first determine what kind of information is needed, then build our systems to gather the necessary data, and then use reports and dashboards to inform what is working and what’s not.

SOMAmetrics is a revenue-focused marketing agency, delivering high-quality leads that close faster and at a higher rate. Our proven process identifies the best targets, defines the most compelling messaging, and runs highly targeted, digital campaigns—for about 35% of what it costs clients to do internally.

Let us know if you need any assistance in designing your intelligent sales data system.