The Prospecting Numbers You Need to Know
Even in this era of inbound leads and social selling, the reports of cold calling’s death have been greatly exaggerated. The truth is that for the vast majority of companies, outbound prospecting is still a crucial part of their growth and revenue generation.
Luckily, The Bridge Group and the QuotaFactory have looked at the numbers on the state of outbound prospecting in their latest Outbound Index report.
Outbound prospecting KPIs
41 SDRs (sales development reps) from B2B technology companies were surveyed about their prospecting activities in the second quarter of 2014. This included more than 14,000 prospect conversations and over $51M in new pipeline generated, with the average deal size ranging from $80,000-150,000.
Specifically, 3 key performance indicators (KPIs) were examined.
1. Reach rate
This measures the percentage of accounts who engage in at least one meaningful conversation with an SDR, reflecting the prospect’s willingness to speak with an SDR.
Encouragingly, the reach rate has shown an upward trend from Q1 2013 to 39.6%.
This increase seems to be attributed to an increase in the overall quality of lead data with 24% fewer leads categorized as “bad data” or “contact gone.” Additionally, the percentage of direct dials – saving time and bypassing gatekeepers and automated systems – increased by 13%.
2. Pass rate
This measures the percentage of rearched accounts that are passed onto a sales rep, that is, the prospect’s willingness to engage in a meeting with a sales rep.
The pass rate in Q2 2014, having remained fairly consistent from Q1 2013, was 11.4%.
According to the data, SDRs are having more conversations per account before passing the qualified opportunity onto the sales rep: the number of conversations per passed account increased 15% year-over-year.
3. Pipeline rate
This measures the percentage of passed accounts that are accepted into the sales pipeline, which reflects the prospect’s willingness to move from interest to opportunity.
The pipeline rate in Q2 2014 continued its downward trend from Q3 2012 to 73.5%.
The average outbound index for Q2 2014 was 33.
This means that for every 1000 accounts prospected by your SDRs in a given quarter, 33 of them should be accepted into the sales pipeline.
The outbound index has decreased 8% year-over-year. Looking at the outbound prospecting KPIs, the falling pipeline rate seems to be to blame.
Pete Gracey of QuotaFactory believes the pipeline rate is falling because the type of people who are the decision makers are changing and/or there are more people involved in the buying process and sales reps aren’t having conversations with these new targets.
The numbers bear this out: In 2013, an average of 1.5 contacts were reached per account passed. In the first half of 2014, this increased to 2.5 contacts reached.
So what should you do?
The report contains several key recommendations:
- Improve the quality of your prospect data to increase your reach rate and save time by obtaining more direct call information.
- Increase your average number of contacts per account to reach more of the key stakeholders to improve the likelihood of the account entering the pipeline. You’ll probably need to do some org charting here.
- Measure what your best SDRs are doing to increase their pass rate that others can replicate.
- Track your rejected opportunities including why they were rejected and deciding whether they need to be nurtured.
- Monitor your metrics and meet with your sales team often to review how the numbers are changing.
Sales is a numbers game and if you don’t have the right numbers, you can’t win.
How do your prospecting efforts compare to the index? Let me know in the comments or tweet @ideal.
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