Why Salespeople Shouldn’t Prospect
This article originally appeared on ForEntrepreneurs.com by David Skok.
In this article I interview Aaron Ross, co-author of a new book, Predictable Revenue. Aaron discusses his experience at Salesforce.com starting a new group that used an innovative outbound prospecting approach (involving no cold calls) to create new leads. Aaron’s group came up with several important breakthroughs which enabled them add over $100m in incremental recurring revenues over a few short years. This article reviews some of those best practices which provide a recipe for others to make outbound prospecting a repeatable and predictable revenue generator.
- As most of my readers know I am a huge fan of using marketing to develop the lead flow for sales people so they don’t have to do cold calling. The main reason for this is the high cost of salespeople, and as a result, the high cost per lead that is created using this technique. However in certain situations, it does make sense to augment marketing with outbound cold calling.
The right situation is likely to have the following characteristics:
- Marketing is not producing the right kinds of leads, or enough leads.
- You have a clear set of target customers that are likely to be the biggest, or best suited, customers for your particular product
- Reasonably high lifetime value of customer that will justify the higher cost per lead. (If you can make $10k in the first year from a customer, this can be very profitable.)
Many companies expect their sales people to do their own prospecting, which can be thought of as doing their own lead generation. You are very clear that this is the wrong approach. Tell us why?
One of the biggest productivity killers is lumping together a mix of different responsibilities (such as raw web lead qualification, cold prospecting, closing, and account management) into one general “sales” role. This creates significant inefficiencies:
- Lack of Motivation: Experienced sales people hate to prospect, and are usually terrible at it.
- Lack of Focus: Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect. It’s not sustainable. Any individual that tries to juggle too many responsibilities, will have a much lower ability to get things done.
Sales people have a reputation for being ADD – how does adding more responsibilities help that? For example, qualifying web leads is a much lower value distraction for sales people than managing current clients. And managing a large current client base is a distraction from closing new clients!
- Lack of proper training and support: Their company doesn’t train them on how to prospect effectively, give them helpful tools or reasonable goals. Usually the guidance is along the lines of “make more calls!” Wow, that’s helpful.
- Unclear Metrics: It’s harder to break out and keep track of key metrics (inbound leads, qualification and conversion rates, customer success rates…) if all the functions are lumped into single areas. Different roles makes it much easier to break out different steps in your processes, which means better metrics.
- Less Visibility Into Problems: When things aren’t working, lumped responsibilities obscure what’s happening and make it more difficult to isolate and fix issues with accountable follow through.
What do you recommend as an alternative?
I believe in dividing up the roles into specialized functions. Here are the four basic functions or themes:
- 1. “Inbound” Lead Qualification: Commonly called Market Response Reps, they qualify marketing leads coming inbound through the website or 800 number. The sources of these leads are either marketing programs, search engine marketing, or organic word-of-mouth.
- 2. “Outbound” Prospecting/Cold Calling 2.0: Commonly called Sales Development Reps or New Business Development Reps, this function prospects into lists of target accounts to develop new sales opportunities from cold or inactive accounts. This is a team dedicated to proactive business development.Highly efficient Outbound reps and teams do NOT close deals, but create & qualify new sales opportunities and then pass them to Account Executives to close.
- 3. “Account Executives” or “Sales”, are quota-carrying reps who close deals. They can be either inside or out in the field. As a best practice, even when a company has an Account Management/Customer Success function, Account Executives should stay in touch with new customers they close past the close until the new customer is deployed and launched.
- 4. Account Management/Customer Success: Client deployment and success, ongoing client management, and renewals. In today’s world of “frictionless karma”, someone needs to be dedicated to making customers successful–and that is NOT the salesperson!