I’ve been working with a fascinating new client. We’ve been looking at how to improve their prospecting results.
It’s been a fascinating project, in some sense, I may be learning more from them than they have from me–but they seem excited about the changes we are introducing.
First, a little background. They wouldn’t be offended, but what they sell is about the furthest thing from being mission critical that one can imagine. Companies won’t grow their revenue as a result of buying their products. They won’t increase their market share, they won’t grow faster. There will be some cost improvement, employee engagement/satisfaction improvement. But the bottom line, there are many other things that are more important to their typical buyer.
They have the opportunity for “mega-deals,” but those generally happen after the customer has some experience with the products on a much smaller scale. As I looked at their typical deal, initial ARR is about $12-15K. While they sell a physical product, like many SaaS companies, they have a “land and expand” strategy, with very sophisticated account planning and growth opportunities. About 30% of their annual goal is based on new deals, and 70% is based on dramatic expansion within those customers.
They have a fantastic marketing organization, it works very closely with sales in providing inbound leads for sales to follow up. As is usually, the case, the volume of inbound leads is never enough, it usually provides about 50% of what sales people need. Sales people have to add to that by a lot of outbound prospecting. They have a small inside sales team doing some lead qualification, but they are also trying to close orders on the first inbound call. So many of the leads, though high quality, the first contact is through the sales person.
Collect and act on NPS-powered customer feedback in real time to deliver amazing customer experiences at every brand touchpoint. By closing the customer feedback loop with NPS, you will grow revenue, retain more customers, and evolve your business in the process. Try it free.
Many would say, this can only be done by web based selling. We would drive paid search and other techniques, focusing on the transaction, and drive the customer to a shopping cart buying process.
Others of us would immediately leap to the high volume/high velocity approaches to prospecting. We would look at how to increase the volume of inbound leads through things like paid search, increased web presence, papering the world with endless “Dear Current Occupant” emails. We would have put dozens of outbound SDRs in place, and systems that enable them to make hundreds and thousands of dials a day.
We would be ecstatic with results of a couple of percentage point of emails opens, fractions of percentage points of conversations and follow up meetings per dial. We would ratchet up performance by adding volume and velocity–more emails, more dials, an endless insanity of driving volume with decreasing open rates and conversation rates.
This client takes a dramatically different approach to prospecting. They’ve gone very old school, they go “door to door,” but in a very sophisticated way. They are very selective about the doors they knock on, focusing only on prospects that have the potential for mega deals, at some point. The “onesy-twosy” opportunities are the focus of inside sales.
When I first started talking to the customer about their approach and how to improve it, my immediate reaction was, “How is this affordable, how do you get the coverage necessary to drive the business volumes?”
As I started following some of the top performers around, I noticed some startling things. About 30-40% of their “first calls” resulted in initial meetings–and those meetings happened immediately at the first call. There was no appointment setting time gap.
I dove into what was happening. The top performers said, “It’s too easy for the prospect to ignore my emails and phone calls, when I am standing in front of them, they can’t ignore me.”
I kept probing, they said, “It’s easier for me to stand out. No one is showing up at the customer’s receptionist these days. I’m the only person coming in asking questions and asking for a quick meeting. Plus, I get a lot of insight, just by looking around at the office, what’s going on, and so forth. It gives me a way to better connect, both with the person at the front desk and the person I’m meeting with.”
The top performers had tried many of the high volume approaches. They said, “It’s really hard to stand out in an email. Even though we personalize the emails, are very targeted in what we do, our prospects see 100’s of emails a day. Regardless how good our email is, they often get lost in the noise.”
More remarkably, they went on to say, “Even though I’m interrupting them, they generally can find the time to spend 15 minutes with me, that’s all I need.” Their sales cycle is about 30-45 days, after that first meeting, most of it is done via phone or even email. The fact they have established that first face to face relationship is tremendously impactful, enabling them to conduct most of the sales process over the phone.
I have to admit, I was very skeptical about this. But then I did some analysis, looking at some public data about high volume/high velocity approaches.
One data point, from a leading tools supplier talking about high performance in a high volume outbound calling environment, suggested roughly 4% of dials resulted in initial conversations, and 5% of those conversations yielded initial meetings. So a person making 1000 dials a day, would have 40 conversations a day, resulting in 2 follow on meetings.
By contrast, using the data for one of the top performers in the “old school” prospecting method, he was making roughly 10 face to face prospecting meetings a day, resulting in 4 initial meetings–at the same time! His yield was 200% greater than the high volume approaches that most of us think about.
While I don’t have the data, I suspect the number of qualified opportunities created in those initial meetings was much higher, both due to his targeting and the focus/attention he was able to get in the face to face encounter, versus the meetings established in the high volume, high velocity approaches.
I was still skeptical. I did some quick CPOD analysis, comparing some typical CPOD’s for those using the high volume/high velocity approaches, and this old school, door to door approach. Clearly, the field people were more expensive than inside people, SDRs, and possibly AEs. Both in OTE and in travel expense. But when I did the CPOD analysis, the costs were roughly the same.
Bottom line, the results from this old school, door to door approach stunned me. There are some challenges the client is facing, but most of these have little to do with the soundness of the approach, but more in consistency of execution, targeting, and maximizing the impact in these first meetings. They are looking at how they become more “important” to the customer, while they will never be mission critical.
Outside this client, we are seeing evidence that other old school approaches are coming back, producing tremendous results. Within enterprise accounts, more and more the “door to door,” within the enterprise are tremendously powerful–leveraging internal references and introductory meetings.
I’ve read of a small resurgence in direct marketing and direct mail.
As we look at the reasons for the success of these old school approaches, a lot of it is because, “No one else is doing it, so by being different, we stand out.”
Clearly, these approaches aren’t for everyone. But I think we need to broaden our perspectives about how we prospect and engage our customers. Think of the impact if you do have a “mission critical” solution and you had active engagement of 30-40% of your prospects in the very first contact? The results could be stunning!
Clearly, doing the same thing as everyone else, at higher and higher volumes, may not be producing the results we want. Perhaps re-examining the old school approaches, or looking at combinations with current approaches cna have a tremendous impact.