Editor’s note: Steli Efti is the Co-Founder/Chief Hustler of ElasticSales and an advisor to several startups and entrepreneurs. Follow Steli on Twitter.
One of the most common questions startups ask me is how to handle B2B outbound sales. They often ask this question in a state of desperation, hoping I respond with the magic formula. Quite frankly, there is no magic formula. An outbound sale is hard work, and it requires an extraordinary amount of effort to get it right.
But why would you even want to do outbound sales for your startup?
The stories all sound the same: When a startup begins selling their product, it’s all about the low-hanging fruit. Inbound, press coverage, the community, and the founder’s personal networks are the majority of a startup’s customer base. Things seem great, because the founders believe that they are on their way to finding a product-market fit and massive traction.
Barring the rare Cinderella story, this is never the case. What happens when the well dries up? What happens when they have to pitch their product to businesses that have never heard of them before? These questions are what cause a startup to cautiously turn to outbound sales.
Every product or service that can be successfully sold via outbound sales has a different scalable and profitable formula to it. The first goal of your outbound sales team is to find that formula. The first questions that need to be asked and tested are: “What mix of research, lead generation, cold emails and cold calls equal satisfying results?” and “Where and how will you get an ongoing stream of quality leads?” It’s impossible to answer these questions without actually trying and testing a lot of things.
Below are four things you need to keep in mind in order to develop a sustainable outbound sales campaign of your own.
1. Compiling Outbound Leads
Keep your lead lists manageable and targeted. Stay away from trying to compile a massive list. Sales reps will have less of an incentive to fully investigate every lead and will waste time trying to cherry pick. Focus on smaller lists with defined attributes, and try selling to them one at a time. This will make it easier for your sales team to learn more about the vertical and how the market reacts to your product. The results from the different lists will allow your team to analyze conversion rates and make decisions on which type of targets to go after more than others.
It’s not often that you will find quality corporate leads with a paid list or database; however, that does not mean they aren’t useful. Look at these lead sources as a starting point. Use a lead generation team if you can to call those leads and confirm what your sales team will be dealing with. Don’t sell them anything; just gather more information. Once you have your “cleaned” lead lists, have the sales team create a custom pitch for each vertical that has a higher probability of directly addressing the client your contacting.
2. The Cold Call
Cold calling is not always a sustainable action for outbound sales. Many times you want to reach out via email first before setting up sales calls. In rare cases, cold calling can be incredibly effective. It all depends on the market that your startup is selling to. Either way, cold calling can be a powerful tool for you to learn about what the marketplace really looks like.
One of the biggest mistakes sales reps make on cold calls is trying to mask the fact that they are cold calling. Think of it as knocking on the door to someone’s house. You don’t just barge through the door and start talking, you ask for permission to come in first. Do the same in cold calls. State your reason for the call and ask permission to continue the conversation. Using phrases like “Did I catch you at a bad time?” or “Do you have a few minutes to talk about this?” will grant you permission to speak and take the next step in the conversation without friction.
3. The Cold Email
The cold email is often times your best bet when it comes to selling a product or service to a startup or technology business. We recommend using the Predictable Revenue approach to cold emails, which is sending an email to a person senior to the actual target you want to sell to, and asking for a referral from this person.
The referral approach has a higher chance of engaging your prospect, because an insider with seniority will be introducing them to your product – not you.
Don’t spam people. Don’t send bulk emails to thousands of business leads. Think quality over quantity.
4. The Answer Is In The Data
The formula for a scalable and profitable outbound sales process can only come from data. Not hunches, assumptions, or guesses. Make sure all of your strategies are tracked and documented. Once you have a good sample of data to evaluate, your goal should be to build a set of expectations for results by the week or month. You can use a “reverse funnel” approach to building a successful outbound formula by answering these questions in order:
- How many deals do you need to close each week/month to be profitable?
- To get that many closes, how many new opportunities in the pipeline do you need to generate per week/month?
- To get that many opportunities, how many conversations do you need to have per week/month?
- To have that many conversations, how many leads do you need to contact per week/month?
- To contact that amount of leads, how many leads do you need to generate per week/month?
If the answers to four and five are mind-boggling, your expectations for closed deals are too high (at least in the beginning). Adjust your expectations, and concentrate on improving the conversion rate at each point of the funnel.
It’s important to remember that an outbound sales process needs to be proven before you can even think of scaling (like any other thing in your startup). Throwing more resources at outbound sales won’t solve your problems. Start small, try everything, and then look at the data. Once you have the formula, you then have a set of expectations for your team to execute. If you can find the formula to outbound sales, the growth and scale of your startup can be massive.