How to Measure Outbound Sales Success

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Near the end of last year, it dawned on me that my company, AG Salesworks, didn’t have an index to measure the effectiveness of our outbound sales efforts. We had great data; we were meticulously tracking all of our outbound teleprospecting reps’ activity, but we didn’t have a solid benchmark.

So, I sat down with a great friend of mine who is a statistical genius, Matt Bertuzzi of the Bridge Group. I threw the keys over to Matt and his team and said that we should come up with an “outbound index” using our data. After many late nights, a lot of hard work and about a month’s time, we released the first outbound index summary from AG Salesworks and the Bridge Group.

I presented this information at the Inside Sales Virtual Summit. You can view my entire presentation below.

What Is An Outbound Index?

An outbound index is a metric for organizations to determine the effectiveness of their teleprospecting reps, also known as business development representatives (BDRs). If you were to give one BDR 1,000 accounts to be prospected over the course of a quarter, how many of those accounts would be at least Stage 1 pipeline for your sales organization at the end of that quarter? That is what an outbound index measures.

What Does An Outbound Index Really Do for Your Organization?

I love metrics. Anything that gets measured can be improved on. That’s philosophically why we created the outbound index. But, the big questions is: what does it REALLY do for your organization?

If I give a business development representative 1,000 accounts at the start of the quarter, and I know that from that I’m going to get 32 pipeline opportunities, how can I use that information? We identified four key areas that indexing benefited:

1. Performance prediction tool.  An outbound index can give you a benchmark for what future quarters are going to look like.

2. Data purchasing sanity check. If you know you are only going to give each BDR 1,000 accounts, you may not need to purchase that list with 50,000 names. You only need high quality data that has great accuracy rates across your target accounts.

3. Headcount planning tool. An outbound index enables you to adjust the size of your BDR team accordingly to meet revenue needs. You can anticipate what you will get in the form of new pipeline from your BDR team and from that look at the historical close rate to determine how much revenue will come from that pipeline.

4. Historical benchmarking. An outbound index can show performance increases over time that not only make you look good in the eyes of the person you report to but also help you to better educate your team as to how you are managing them.

Establish Ground Rules

Before building your outbound index, it is important to first establish some ground rules. These are the four things that you’ve got to accomplish in your organization in order for an outbound index to work:

1. Never more than 1,000 accounts per BDR per quarter. You lose productivity when you go over this number, and by keeping it standardized, you ensure the ability to be able to run your reporting in an effective manner that will allow you to get an accurate outbound index for the quarter.

2. Never less than 75 percent database accuracy. You must hold your data accountable. You should never have less than 75 percent database accuracy from a phone number and email deliverability standpoint. That bad data wastes time, which significantly impacts the morale of your troops and the index itself. It can drive your numbers much lower than they should be.

3. Standardized fully qualified lead definition. You need to define a qualified lead for your organization, so you don’t have rogue agents booking appointments for opportunities that are not qualified. My company has specific guidelines for qualifying a lead.

Before BDRs pass opportunities to Sales at my company, they need to be able to tell sales reps specifically what pains the prospect is experiencing. How serious that organization is about alleviating those pains. How soon they want their pains alleviated, and most importantly, if they will spend the necessary funds to alleviate those pains. They need to have an introductory conference call scheduled.

Your definition may differ depending on your company’s needs, but the point is to have a definition.

4. Established and enforced closed-loop process. Three questions will help you determine whether you have Stage 1 pipeline that can be counted toward your index:

1. Did the call that was scheduled occur?

2. Was the qualification information provided validated by the sales rep?

3. Is there a clear and definable next step in the sales process?

That is closing the loop. Whenever those three questions are answered in the affirmative, you’ve got Stage 1 pipeline.

Once you’ve established the ground rules, you need to fix your system to make sure you are adhering to them.

What Is Outbounding?

At AG Salesworks we define outbounding as the actual outbound activity that telequalification reps engage in order to fully qualify opportunities. That outbounding process comes in four stages:

1. Establishing the universe. Figure out who your ideal target customers are through cleaning, appending or acquiring net new data in order to build that universe of 1,000 accounts for reps to call.

2. Talking and dispositioning. This is the execution stage where you email, call and leave voicemails.

3. Passing. A small number of those 1,000 accounts are going to be passed to sales. Passing to sales occurs after a rep has targeted a prospect, executed a call plan and qualified that opportunity.

4. Pipelining. Pipelining is the stage of outbounding where that first call occurs and those three questions discussed above are answered in the affirmative. The call occurs. The information is validated and there is a next step in the sales process.

Understanding the Metrics that Really Matter

The next step in getting ready to have your own index is making sure you understand and learn all of the metrics that really matter. These are the three key metrics that we at AG Salesworks constantly measure and manage against:

1. Reach Rate. Reach rate falls in the talking and dispositioning stage of the outbounding process. It is the percentage of total outbound activity that results in a meaningful conversation. What is a meaningful conversation? A meaningful conversation contains at least one key piece of critical qualification information. As an organization, you want to strive for a reach rate of between 10 percent to 15 percent for your telequalification purposes. Any rep falling below 10 percent reach rate deserves immediate coaching and investigation.

2. Lead Rate. Lead rate occurs in the passing stage of the outbound process. Lead rate is the number of leads that are generated from all contacts.

3. Pipe Rate. The third and arguably most critical metric you need to track in order to find outbound index is pipe rate, or the rate at which opportunities are going to Stage 1 pipeline.

If you are passing fully qualified opportunities, your pipe rate should never fall below 75 percent. We strive for 80 percent minimum pipeline rate for our client engagements. This means that for every 10 leads we pass over to a sales person we expect that 8 of them will show up on their sales forecast as Stage 1 pipeline.

Apply Rules to Your Database

1. To determine your quarterly data purchasing need, multiply the number of teleprospectors by 1,000.  For example, if you were starting a team today with 10 people, you would take 10 reps x 1,000 to determine your data purchasing need of 10,000 records.

2. Once you have your database formulated, you need to score it against your ideal profile and prioritize. Your list will be full of your target contacts, but there will be people on there who will be an even better match. They should be called first.

Help your reps understand why you prioritized the list for them, so they will spend the majority of their activity with the highest-yielding prospects and can eventually prioritize on their own.

3. Put rules in place, so you are improving your list as you go. Make sure you apply a standardized CRM usage and a standardized data process. Have mechanisms in place to make sure your reps are not only tracking their activity but actually improving their overall database as they go.

Calculating Your Outbound Index

Now it’s the time when the rubber meets the road, and you’ve got to actually calculate your index. It’s the end of the quarter, and you want to see how you did. After you have the database mapped properly using the guidelines in this article, you run reports on the 1,000 accounts you gave to a particular rep.

You then simply map those 1,000 accounts and see how many of them made it to Stage 1 pipeline. It’s an incredibly basic math exercise. That becomes your outbound index number. It is that easy.

It’s all about the systems, processes and standardization that you put in place up front. The math is simple. The devil is in the details.

If you follow the critical steps from this article, finding the index is incredibly easy.

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