Welcome to a guest post by Greg Poirier. Greg’s a bit of a rock star in Canada’s startup community and a tireless advocate of picking up the phone and making things happen. In addition … he’s got a wicked sense of humour. Enjoy and share!
… and you don’t have enough touches with each of your leads to ensure you deliver a sale.
How do I know? Well to be honest, I don’t know for sure, but I dig deep into CRM’s (Customer Relationship Management platforms) like Salesforce and, in my experience, if you are making enough calls and have enough touches, you are in the minority. And there’s lots of research that supports me.
It takes eight cold calling attempts to reach today’s customer (Telenet & Ovation Sales Group), but on average most sales people give up after just two attempts (Sirius Decisions), which is preposterous; most people can’t get their own children on the phone in just two tries.
Maybe you already know this. But, perhaps what you aren’t aware of is how many leads you need to be working in order to qualify one. Or how many qualified leads you need to create an opportunity and then a sale. Why don’t most companies know these basic sales statistics? Because. Math.
Making Sales is All About the Math
Sales is a numbers game. Being a sales leader is about understanding the math that drives your team’s success. To help with this, I’ve included some sample figures below. Take a few minutes and use this outline to do some back-of-napkin calculations on how many touches your sales team is going to make this year versus the number you need to hit your target.
How to Calculate the Number of Sales Activities Required
- What is your revenue target? (example: $1,000,000)
- How much is your average sale? (example: $50,000)
- How many sales are required to meet the revenue target? ($1,000,000/$50,000 = 20)
- What is your Sales WIN rate? (example: 10%)
- How many opportunities do you need to win a sale? (20/10% = 200)
- What is your lead to opportunity conversion rate? (example: 25%)
- How many leads required to create an opportunity? (200/25% = 800)
- How many touches are required to contact and engage a raw lead? (example: 8) More on this below
- Total activities required? (6,400)
Why CRM’s Are Important
When I work with companies to help improve their sales funnel, often the problem is not a lack of leads. It’s that the sales team is not consistent and persistent in how they contact those leads. Pursuing a single lead over a span of weeks via phone, email and social media, then following up on voicemails that were left – this cannot be tracked using memory or a spreadsheet. If you leave phone messages for 25 leads daily and then need to follow up – it isn’t going to happen without the help of a CRM. Don’t have one? Check out this post to learn more about how to implement a CRM.
But I Already Have a CRM
Well – then I already love you. Ok – to be fair, love is a strong word. But I feel about you the same way I feel about gas station hotdogs – a lot of optimism tempered with a bit of experience-based caution.
Using Your CRM to Measure if Your Leads are Getting Enough Touches
Run a report in your CRM for leads and group them by number of activities that weren’t automated (i.e. from a marketing automation platform). What percent of leads had more than 2 touches? And looking at the ones that were closed as dead or lost, what was the reason? Was it that they just didn’t return the first voicemail? And if the majority of leads were not marked as dead because a call/conversation took place, but the lead still wasn’t qualified, then you have a problem. You can read this post on custom Salesforce reports for a quick Weekly Activities report recipe that can help you measure this.
Ummmmm. What was I supposed to learn from this post?
First off, cold calling isn’t dead. It works (great post on this here). I’ve seen it work and I’ve seen it lead to sales people closing deals worth hundreds of thousands of dollars. Using Marketing Automation, lead scoring and all these other great tools is wonderful. But it doesn’t matter if you don’t have sales people picking up the phone to call those leads you’ve nurtured and scored. And then calling them again. And then calling them again.
Without a CRM and team leaders focusing on sales people repeatedly reaching out to leads before giving up, you will not hit your quota and great leads will be squandered.
Greg Poirier is President of CloudKettle, a company specializing in helping B2B SaaS organizations increase their sales pipeline with Salesforce, Marketing Automation and by assisting with their Content Marketing, SEO and online advertising efforts. (Follow CloudKettle on Twitter.) Greg has been part of three technology startups, including Radian6, and has over a decade in marketing and management experience. He also provides mentorship at his local incubator and lectures on technology and marketing at his alma mater.