Tell me if this sounds like you. You’ve started your outbound sales process expecting your business growth to be steady. The reality is that you have had some successes but they are inconsistent. For every month of hitting your numbers easily, there are two grueling months when you don’t. According to Aaron Ross, it should take 4-6 months to start generating sales opportunities consistently, so why are we 7 months in and still being surprised month to month?
I can imagine this is causing you some consternation. After all, the promise of targeted outbound sales is that the business growth is supposed to be predictable. So why do you keep coming up short? Instead of making long-term forecasts, plans for hiring and commitments to investors, you’re still in the trenches, wondering if your sales team will hit their numbers this month. So how do I make my revenue pipeline and business growth predictable?
Outbound sales is like a finely tuned race car engine. When everything works properly, all you need to do is put your foot on the gas pedal and the engine will whir to life, shooting your car down the track. And like a race car engine, your outbound pipeline has a series of processes that make your business growth predictable. At Growbots, we call this the outbound equation.
The outbound equation for the business growth
It was a game-changer for us in terms of predictability and visibility when we first defined each part of the equation. You see, the outbound equation lets us evaluate each step that contributed to business growth. It meant that we could find which metrics we could boost to improve our final outcome. We could also pinpoint exactly which parts of the process were underperforming so that we could make our business growth predictable.
Now 80,000 cold email campaigns later, we have distilled it into this:
To put it another way:
cold prospects x warm lead rate = warm leads*
warm leads x persistence rate = meetings set
meetings set x meeting attendance rate = meetings held
meetings held x sales qualified lead rate = SQLs
SQLs x close rate = new customers
new customers x average deal size = revenue
*warm lead – a person who responded positively to our campaign, Growbots is able to recognize what type of replies you’re getting in your campaigns #AI
Putting the outbound equation into practice
To give an example, this is the outbound equation with the numbers that we currently have:
200 (prospects contacted) x 10% (warm lead conversion rate) x 45% (meetings set) x 85% (meetings attended) x 70% (SQLs) x 38% (deals closed) = 2 deals closed
It means that every time a rep sends out 200 cold email campaigns, we can predict with reasonable certainty that 2 deals will be closed from that effort. With Growbots, you can send about 200 cold email campaigns per email address in about 5 minutes a day or 30 if you personalize them. Let’s say our average deal size is $3,000 dollars. That means that each of our reps spends about 30 min a day prospecting for leads that will eventually create $6,000 in the revenue.
Now imagine what you could do with that information. You could predict the percentage of business growth each rep would create for you. You could make long-term plans based on the accurate revenue projections. And if something goes wrong, all you would have to do is to look at which metric is lagging and fix it, rather than reevaluating your entire revenue pipeline every time.
The two lessons we’ve learned about predictable revenue
Lesson 1: The only way to make business growth predictable is by standardizing your outbound strategy.
Before we standardized our outbound strategy, we couldn’t tell what results our 12 reps would produce at the end of the month. Each of them had written their own campaigns and each had a different approach to targeting companies. Understandably, everybody got different results and it was impossible to predict business growth.
What we did was to test different strategies until we found the one that was successful (bumping our warm lead conversion rate from 3% to 10%) and we naturally implemented it within our entire team. Overnight, our team started producing predictable results (bumping our demos regularly from 250 to 500 a month) and the laggards were caught up with the high flyers.
Lesson 2: Take advantage of your rep’s creativity to stay ahead of the game.
When we standardized our outbound strategy our results became super predictable but outbound sales is a moving target. A strategy that works great for you now might stop working 8 months down the line. If you aren’t testing new outbound strategies, one day you will be left without one that works.
Remember how each of our reps used to send their own campaign? Well, they still do. The difference is that each rep sends out a campaign that they already know works. This accounts for 80% of the messages we send. The other 20% is used to test new campaigns.
We call it the 80/20 rule. As soon as the new campaigns start working better, we switch to them. This way we always have a high-performance campaign ready to go.
How great will it feel when you make your outbound pipeline predictable?
If you are anything like us you will feel a huge sense of relief when you standardize your outbound campaign. You can finally move onto the things you want to focus on: closing sales, sustainable business growth, or pitching to investors. All this can be done with the expectation that you will have enough revenue to achieve your goals.
If you need x amount of money for a new deal (let’s say 4 million dollars) and your average deal size is 2,000 dollars, we know from the outbound equation above that you will need to send campaigns to less than 20,000 prospects, which will take 200 days of prospecting (4 weeks of prospecting for a 10 person team), sending out 200 campaigns a day, each. In other words, you will finally have the predictable business growth channel you have been wanting since you started doing outbound.
Of course, if something goes wrong, you can go in and tweak it. We have made a handy calculator which shows you the exact result you should be getting at each stage of your outbound pipeline. If you aren’t getting the results you want, you can see what is going wrong and how to fix it. You can even put these numbers in for each sales rep. If they aren’t making their number, you can see where they’re lagging and coach them to success.
There is a lot more about the outbound equation that we want to share. The next article will tell you how to double your sales team output and business growth by tweaking your outbound equation. Stay tuned.