Sales Archives - SOMAmetrics

Building High Quality Sales Pipeline

June 5, 2023June 2, 2023 by Eskinder Assefa

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:

Why the quality of the sales pipeline matters more than the size of the sales pipeline
Why effectiveness, and not efficiency, is what builds a high quality sales pipeline, and
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.

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.
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.
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.
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.
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.
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.
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.
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.

Track These Metrics to Build a Viable Sales Pipeline

July 6, 2022July 6, 2022 by Alicia Assefa

A common mistake I have seen companies make in analyzing their sales pipeline metrics is focusing on the tail end of the Revenue Realization Cycle (RRC). These include:

Closing ratios,
Sales cycles,
Forecasting what will close this quarter.

Focus on Sales Pipeline Metrics

Focusing on these elements of the sales processes keeps them from performing all the necessary upfront work. The work needs to happen prior to these stages. Champion boxers say that the fight is won in the gym, not in the ring. To clarify, if they adequately prepare for a fight and are in great shape, they have the best possible chance of winning the fight.

In the same way, companies that measure only the tail-end of the RRC are basically entering the ring unprepared and expecting to win the fight, simply by trying hard. Truthfully, unless they have very short average sales cycles (less than 1-2 weeks), their ability to impact the current quarter’s outcome is minimal.

For companies whose sales cycle length is longer than 30 days, the battle to achieve quarterly revenue targets actually started in the previous quarter. If they didn’t start last quarter, they most likely will lose the battle this quarter.

If you don’t know your Funnel Math or desired sales pipeline metrics (how many impressions you need to generate qualified leads that result in your quarterly revenue targets—as well as how long it takes to do these), you don’t know what to measure to support revenue objectives.

Demand Generation

How many impressions (touches, including number of emails; direct mail; ads; etc.) will it take to get to the optimal number of raw leads? How many to get to the right number of warm leads to hit your revenue target? Once you know the number of impressions required, you will need to understand the conversion rate of Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). Are your MQL-to-SQL ratios 10%, 5%, or less? Knowing these numbers are essential elements for creating successful demand generation campaigns and building an SQL funnel or pipeline.

SQL Funnel

How many dials, on average, does it take to get a conversation with a decision maker? Who cares? At the end of the day, if your Sales Development (SDR) team isn’t having daily conversations with decision makers, you aren’t going to build a sales pipeline or generate revenue. To achieve this, your team must make a minimum number of daily dials to reach decision makers. There are tools out there that track phone connection rates and enable your sales team to “log a call”. In general, these tools are good and can support the day-to-day sales pipeline management of your team.

However, we recommend that you focus on the daily number of conversations that your sales reps have with decision makers. All opportunities to speak with decision makers can move the sales process forward. Call logging tools don’t track this kind of data; you will need to build this process into your CRM (SDR CRM Field Mapping Resource Here). Building the SDR Fields and metrics into your CRM will keep your SDR’s on their game, and give managers insight into the activities that matter.

Building the Sales Pipeline

MQLs take time to be nurtured and developed before they become SQL’s. Therefore, you’ll need to build a SQL pipeline to support the Sales pipeline. Most companies have no concept of a SQL pipeline, which is usually 4 times the SQL quota. Normally, 25% of SQLs convert to sales pipeline, but your ratios may differ.

You’ll need MQLs and callers to build a SQL pipeline. These are the front-end Revenue Recognition Cycle numbers and conversion rates you will need to track, measure, and know definitively.

In addition, make sure that you have a SQL quota for each Teleprospector. Track the SQL funnel regularly in order to get an accurate picture of your SQL-to-Closed Deal ratios. Knowing these RRC numbers will help you meet your key sales pipeline and revenue targets.

Download the free CRM Field Mapping Resource here.

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.

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

SDR Candidates: Best Interview Questions to Find the Right Fit

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

Sales Engagement Platforms: The Wild, Hungry Beasts!

July 6, 2022June 27, 2022 by Alicia Assefa

Sales Engagement Platforms (SEPs), such as outreach.io; frontspin.com; groove.co; to name a few, enables your SDR and Sales Teams to track and personalize the steps in a buyer’s journey. They automate menial tasks, ensuring that prospects are “touched” in a regular cadence until the sales cycle, or “sequence”, has ended. When used effectively, SEPs allow your Sales and SDR teams to spend more time generating revenue in an extremely efficient manner.

Sales Engagement Platforms are a much needed solution to save time in the Sales tech stack. Nonetheless, they are difficult to maintain and manage. I’ve implemented these solutions at numerous companies. Our customers believed that once the implementation was completed, the SEP would manage itself. However, this is not the case. SEPs are like wild, hungry beasts: they require constant care and feeding to remain manageable. If left in the hands of your Sales or SDR teams, it will be difficult to determine if your sequences, cadences, and content are effective.

The Problem with Sales Engagement Platforms

When companies implement SEPs, they feel confident that this new solution will help them reach more people faster, and in a more personalized manner. SEP’s provide great stats on open rates, and provide dashboards so that the team can see what to do and who to contact next. Great news!

Here is the problem: companies fail to understand that their SEP is only as good as the latest content that has been added to the SEP library. Consider these points:

1. Recycling emails and content will not garner the customer engagements you are seeking.

Every sequence has a life span, let’s say 10 weeks. Once the sequence is completed, you can create another sequence for the customers who didn’t engage with you. Every customer interaction should be of value to your customer. Thus, reusing the content from the first sequence may not work; the customers who didn’t engage haven’t seen your value, yet. Provide updated content which will make you the thought leader, and provide valuable insights for customer success. Emails, blogs, infographics, videos, and social media should be refreshed every month or—at the very least—every quarter. Assign someone in your organization to create and update content regularly.

2. “Snippets” must be valuable content.

I often get emails that start with, “Hey Alicia, did you receive my last email?”, or, “Following-up on My Last Email”, which I delete before opening. If I don’t know “immediately” who the sender is, their value prop, and what they want, why should I waste my time wading through a string of emails to determine their value to me? Provide content that is of value to customers across multiple platforms and your response rates will improve. (Hint: Every company that has a SEP uses these generic snippets. Consider this: hundreds of these snippets are going to customers every day. If everyone is doing this, your emails will fade into the background and your sales engagement tools will go suffer).

3. Sales Engagement Software provides team members a fast and easy way to message to customers.

However, this feature may not be helpful. SDR’s and Sales Reps are not necessarily the best writers when it comes to conveying your message. Your team members may or may not understand your message and value-prop, or they may not consistently express the benefits of your solution. To remedy this, task a company writer to write these personalized emails with the plan to refresh every month or so.

4. CRMs have an Administrator and SEPs should have one too.

To get the highest value out of your SEP, give someone (not a SDR, Sales Manager or Sales Rep) in marketing operations or sales enablement the job of:

Managing the SEP solution
Creating the sequences
Updating and refreshing the content library
Tracking the data of the content, sequences, cadences
Creating nurture sequences
Reporting results to the management team

Make no mistake about it: this is a full time job. If you don’t plan to centralize the management and feeding of a SEP, don’t purchase one.

How Sales Engagement Platforms Will Drive Revenue

The Sales Engagement Platform is a wonderful tool which, when used correctly, can help you increase customer engagement and grow your revenue. When this sales technology is not managed consistently—for example, with refreshed materials and sequences, or if Sales Reps and SDRs are expected to write content to deliver your messaging—you may find that you have wasted a lot of money on a solution that becomes unwieldy over time. Remember, managing your SEP is a full-time job. If you want to increase customer engagement, invest in a full-time team member to manage it.

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

Navigating Complex Sales: Build a Sales Development Team to Support Pipeline Growth

June 15, 2022June 20, 2022 by Alicia Assefa

Companies that have complex solutions have additional challenges in meeting their revenue targets due to obstacles or delays. This is a major problem that many of our clients struggle with. SOMAmetrics specializes in helping clients address a number of issues related to complex sales. This article discusses some important points executives should think through when it comes to generating sales pipeline for complex solutions.

For discussion purposes, we will define complex sales as those that typically target large organizations (Fortune 2000 companies and government entities); poses significant perceived risk and cost for the customer; involves, at the very least, a handful of key stakeholders besides the final economic decision maker (i.e. CEO, CFO, CIO, a CXO); entails a complex sales process and decision making process; and usually comes about as a result of a company or division-wide initiative.

Assessing the Prospecting Process

To complicate things further, different titles may be in charge of the same initiative or drive in a given sales environment. This makes it difficult to determine where to begin the prospecting process. Hence, a complex sale involves research over time to uncover the moving parts and weave together a coherent sales strategy or assessment. The following are a few examples of information that this assessment may address:

What is the driving issue/initiative behind the need?
Who are the key stakeholders involved?
What are the key pain points and concerns of each?
Who has the most urgent pain, and therefore wants to see this taken care of sooner rather than later?
From where is the funding going to come for this? Is it all in one place (department or division), or will it be shared, and how?
Are there multiple decision makers? Who is the final decision maker?

These are only some of the early questions to begin assessing whether there is a viable sales opportunity for your complex solution.

Using Sales Reps to Prospect is NOT a Good Idea

Often, we find that companies rely on their field sales reps to find viable opportunities within large, complex organizations.

We don’t think this is a good idea. This task differs greatly from what sales reps are expert at: calling on prospects who have agreed to see the sales rep. Prospecting, however, requires making 10-15 dials just to reach John Doe, who might not even be the right person to start with. Then, John may only have time for a quick conversation and suggest the rep call Jane Smith. Twenty dials later, the rep finally reaches Jane, who adds more to the story and suggests calling Mike.

And this is only the first round of calls; there will be follow-up calls to multiple stakeholders to find out more about one or more issues.

It is not unreasonable to expect that 500+ dials might be made into a single account to determine whether there is value in moving forward.

The question here is: who is better at quickly and cost-effectively uncovering viable sales opportunities? A field rep that will make 10-20 dials a day, or a seasoned SDR who makes 70-80 dials daily?

The SDR Solution to Complex Sales

Our experience repeatedly shows that field salespeople engage in early prospecting ONLY when their pipeline dries up. This, in turn, makes it very difficult for companies to reliably forecast what their revenues will look like over 3-4 months out. Since the sales cycle for most complex sales products tends to be six months or more, this means that a company cannot reliably predict revenues outside of the current quarter.

Our recommendation is to use SDRs to build the sales pipeline for the sales team (Read “5 Reasons Why Your Sales Development Team Is Failing“). This avoids the yo-yo effect and makes revenue targets more reliable. In this scenario, a senior SDR will do all of the initial research to gather the coherent sales opportunity story and pass it on as a Sales Qualified Lead. This opportunity story is a synopsis of the key initiatives; which departments or divisions are directly involved; who the key stakeholders are; which CXO is driving the initiative; what the individual pains, concerns, and desires of the various stakeholders are; and what a reasonable timeframe looks like for making a final decision on the acquisition of the solution.

Choosing the Right Person for a Complex Sales Role

The right type of Sales Development Rep (use our free Top SDR Interview Questions Resource) to successfully perform this would have the following qualities:

Has experience as a quota-bearing field or inside sales professional who understands sales, particularly complex sales into enterprise account
Is very comfortable and successful at accessing and selling to CXOs
Has the right temperament to work alone as well as to enjoy interacting with others
Is an avid learner, always trying to learn more about his/her industry and what the pain-points and new concerns for the targeted CXO’s are
Understands that this is painstaking work that will require hundreds of dials and many dozens of conversations that may or may not lead anywhere, and still enjoys the hunt
Is results-driven and has a strong sense of urgency

This is a specialty area, and the right person must align to the job. Start with Sr. SDRs while you grow your SD Organization. Once you have nailed the messaging, processes, and metrics, you can scale with SDR’s who are less experienced in this role.

Schedule a Meeting with Alicia

Find out more about SOMAmetrics’ Intelligent Prospecting Platform and get free resources on our website at www.somametrics.com.

SDR Candidates: Best Interview Questions to Find the Right Fit

Prospects are Real People Too: Using Prospect Personas to Land Calls

Use Task Force Teams to End the Great Reshuffle

How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

Use Task Force Teams to End the Great Reshuffle

June 22, 2022June 6, 2022 by Alicia Assefa

Using Task Force Teams to End the Great Reshuffle

Inc. Magazine’s recent article “Why Are People Really Unhappy About Their Jobs? The Whole Reason Can Be Summed Up in 2 Words” describes two reasons why the “great shuffle” happens today. Increased salaries and a basic “thank-you” are no longer working for burnt out employees. The studies presented in the article show that leaders must learn how to recognize employees in a way that they will feel valued to end the “great reshuffle”.

Setting Up Task Force Teams for Sales

During my career, the method that I used to win over hearts and minds of was task force teams. These team members should engage in setting processes, policies, metrics and KPIs for the SDR team.

When I am asked to re-tool a SDR or Inside Sales organization, I use task force teams to gain trust and energize team members. To do this, I conducted interviews with each team member within the first week ‌in my role. Then, I created task force teams regarding the specific yet common issues and concerns that I uncovered during these interviews. These issues and concerns have included topics such as Key Performance Indicators (metrics used to manage the team), Commission Rates, Quotas, CRM, Contracts, etc.

I asked that team members join one or more of the task forces to resolve the outstanding issues. I informed them that some executive-level ‌issues—commissions and quotas—may not resolve exactly as envisioned. My teams knew that once our recommendations were approved, we would be held accountable for achieving our projected numbers.

The Process

I limited participation to 5-7 members for each of the task force teams. Here is how I managed the task force teams:

I started with a brainstorm session or two which helped us get all ideas on the board for later review
Following the brainstorming session(s), I conducted the ideas review. During this phase, task force teams review and eliminate any idea(s) that are not viable
The team captures and reviews task force recommendations in a PowerPoint deck prior to presenting to the manager (me in this case)
Each Task Force Leader presents the approved recommendations to the entire team. The team understands that they should follow the approved task force recommendations. In most cases, there was a 95%+ agreement rate about the recommendations as outlined by the various task force teams

Task Force Teams—Case Study

One of the organizations that I turned around was the Inside Sales team for a company that had lost half its clients and hadn’t seen any new business since the recession. The Inside Sales team had not hit their revenue targets in many years.

During the assessment of the organization, I found that no one held the sales team accountable for their metrics. For example, Sales Reps didn’t have quotas. The sales funnel was full of opportunities, but 80% of these were no longer viable deals. There was no sales methodology in place to effectively manage deals through the sales pipeline.

In addition, there were no KPIs or metrics in place. Team members made fewer than 10 dials per day. I knew we had to get that number up because this was a phone job and the only opportunity to get more prospects was by calling them. I realized that my Sales Management experience was key in getting this team to achieve their goals and increase revenue.

The Turnaround

Working with the task force teams, we decided on a sales methodology and types of metrics that the team agreed would help them achieve their newly assigned quotas. Everyone agreed to the minimum metrics and worked towards them as a team. At the end of the first year, revenue had increased by 57%, and revenue from new prospects had increased by 80%

Sometimes, I don’t agree with task force recommendations. If their recommendations are way off the mark (from my experience), I work with the team to get their ideas to align with what I know will work. Ultimately, however, the caveat is that if we don’t see improvement within 90-days, we will need to regroup and come up with a better process or set of metrics. This becomes a continuous improvement process in which experimentation is essential. Similarly, Sales Management is not a stagnant process.

As the manager of a team, you need to be flexible and listen to the suggestions of your employees. Sales Management is about working with your employees and, ideally, empowering task force members to work together to analyze the success of their recommendations. Review task force recommendations and results at the end of each quarter.

Increase Productivity

There are many studies about Sales Management and employee involvement in the decision making process. Most research agrees that active participation has positive effects on performance, and thus productivity. For example, C. A. L. Pearson conducted an experiment involving two groups of workers: a group of employees who set goals, and a control group that executed traditional work procedures. The results showed not only that those “who were engaged in participative goal setting reported […] greater job satisfaction”, but that “goal setting and performance were positively related.” [1] Similarly, another paper found that “empowered employees largely improve performance by finding innovative ways of correcting errors in service delivery and redesigning work processes.” [2]

These findings are in line with my own experience, and show that if you get the buy-ins from your employees, you will see an increase in performance, productivity, and eventually revenue.

So… what?

Rather than telling the team what to do, I give my teams the ability to determine their destiny. When teams have the opportunity to provide their input on specific aspects of the job, the manager has their “buy-in,” and team members can work toward the assigned goals. Why wouldn’t they? It’s their plans and ideas and, therefore, their responsibility to make them work. This process has worked for me and has helped my teams greatly improve their performance.

Employee retention should be at the top of every company’s list. Allow them to give input into how they should do their jobs in order to improve morale and reduce exits

The Radical Pipeline Strategy Book by Alicia Assefa

Schedule a Meeting with Alicia

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5 Reasons Why Your Sales Development Team Is Failing

5 Reasons Why Your Sales Development Team Is Failing

June 22, 2022March 4, 2022 by Alicia Assefa

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!

Schedule a Meeting with Alicia

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How Difficult Is It to Generate a Meeting? Common Misuses of SDR Teams in Appointment Setting

4 Sales Development Manager Oversights That Hurt SDR Teams

June 6, 2022February 25, 2022 by Alicia Assefa

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 alicia@somametrics.com if you want to reboot your SDR team.

Learn about our SDR Enablement.

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Why Sales Development Representatives Underperform

June 6, 2022February 18, 2022 by Eskinder Assefa

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.

Grow Sales Pipeline and Drive Revenue Growth

June 6, 2022February 11, 2022 by Eskinder Assefa

Grow Your Sales Pipeline to Fix Missed Revenue Targets

How can you grow your sales pipeline and consequently fix missed revenue targets? If you think of your total revenue operations, it is likely fed by four major revenue streams:

New orders from totally new logos
Reorders or renewals from current customers
Upgrades, up-sales, and add-ons from existing customers
New orders from entry into brand new markets.

In all but one (reorders/renewals), the key challenge is how to grow a sales pipeline of sufficient size and quality. It is also finding one that consists of informed decision makers who are actively searching for a solution within budget.

The fundamental thesis of this blog is that missed revenue targets happen primarily as a result of missed pipeline targets.

If you are skeptical about this, consider the following research findings:

New customer acquisition cost is increasing by an average of 10% or more each year.
Over 100 million new businesses are started each year, worldwide.
Partly as a consequence of that, nearly 80% of B2B companies change vendors within 24 months.
Nearly half of sales reps (49%) fail to meet their quota—a trend that has been consistent for some 10 years now.

If we put the stats together, the story looks like this: competition is intensifying and competitors are stealing customers. So, we have to find opportunities for new customers just to grow at the same rate. This is forcing us to spend more marketing and sales dollars to acquire new customers, creating a spiraling cost loop.

Furthermore, we continue to design, invest, and build our sales pipeline management the same way we did in the 20th Century—and our sales reps struggle to meet their sales quotas.

Things were definitely different then. Buyers more or less welcomed sales calls because salespeople were a source of valuable information about what competitors were doing and so on. Then internet boom allowed for buyers to research this data for themselves, so sales teams became more a nuisance than an asset and were mostly shut out.

Fast forward to the 2010s, content and social media became king as B2B companies began to invest in their marketing efforts. And then the global pandemic hit and sealed the deal of a new sales process. Now, marketing is everything: ABM, demand gen, growth marketing, etc.

B2B Bottleneck

So, B2B companies created a bottleneck, an operational bow-tie with large Marketing spend and large Sales spend. They gave practically no spend or thought to what connects the two big operations, namely Sales Development.

Here is one way to think about this. Your marketing department is tight on time and resources on sales performance (as much as you spend there). So, marketing campaigns end up going after the Total Addressable Market (TAM) instead of a more focused Serviceable Addressable Market (SAM). You end up getting leads that are too small, too big, or in geographies you can’t really sell for whatever reason.

None of these will ever go on your sales pipelines, and yet these “leads” pass on to your sales reps. They become overwhelmed by all these leads just to find the ones that they can actually work with.

The Problem with your Sales Pipeline

So, you hire Sales Development Reps (SDRs) to help with that. Only, you hire junior people, provide them with basic training and lots of technology, and let them loose on these new prospects.

The problem now is different. You have someone who was just a few months ago working at Starbucks calling on a senior decision maker who has been doing this for 10, 15 years. It’s like a high schooler saying to an NBA player, “Let me show you some slick moves…”. It’s not going to work out well.

So, all the money you spent on your marketing gets throttled down in the middle. Good lead generation slips away because those tasked with following up and setting appointments simply don’t know how to execute social selling or talk to these people.

As a result, your sales organization has to do its own prospecting. They spend less time moving those in the sales pipeline towards a close. The end result is missed quotas and missed sales opportunities.

The Solution

The solution is to design your company’s revenue operations in such a way that you avoid the bottleneck. This allows revenues to smoothly flow from Marketing all the way to Sales, facilitated by SDRs who grow the sales pipeline for the sales organization.

Sales Development is a strategic revenue operations partner—equal to Marketing and Sales. It needs to be headed by a senior strategic thinking leader, and its members must be capable of talking at the level of senior decision makers in global companies.

Most importantly, your Sales Development organization has to grow the sales pipeline (not meetings) and should be compensated the same way your sales organization is—by how much it contributes to revenues. It’s time to really rethink our revenue chain, and redesign it from the ground up to meet 21st Century sales needs.

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

September 22, 2022January 12, 2022 by Eskinder Assefa

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

June 6, 2022January 5, 2022 by Eskinder Assefa

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:

Schedule a call with us today

Quadrant 3: Customer Retention and Upselling to Drive Sales

October 31, 2022December 22, 2021 by Eskinder Assefa

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.

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.