While an increasing number of high-tech companies have been perfecting the art of getting found on the Internet via the use of Inbound Marketing techniques, there are situations where it makes sense to do outbound prospecting via email campaigns, cold calling and appointment setting.
There are two main reasons for that:
1 – Outbound prospecting can generate leads FASTER than inbound marketing
The reality is that it takes time for Inbound Marketing to produce leads… while leads may be needed now.
This is particularly true for companies that are just starting their Inbound Marketing journey. The time it takes to develop great initial content for their website, that will attract an increasing number of followers, that will develop an ever closer relationship with their company and that will start recognizing that the company’s products can actually solve some of their problems, can be quite a long one. While the groundswell of inbound marketing develops, companies cannot just wait for inbound leads to start coming in and need to engage with their prospective customers on a proactive basis.
This is even more true for companies that are getting started altogether, and that are dying to test their value proposition and get early feedback for their new products. The fastest way to get feedback from their target audience is to reach out to them directly, via targeted email campaigns and calls from business development representatives (also called inside sales reps in some companies).
The cost per lead produced via outbound prospecting campaigns is generally higher than inbound leads, as companies have to buy target customer lists, pay the business development representatives for cold calling and appointment setting and eventually technical pre-sales resources for product demos. There are no economic breaks in this outbound process, unlike inbound marketing where online self-service resources such as educational materials, demos, free offerings… allow companies to generate significant economies of scale.
But if you need to produce leads fast, outbound prospecting will get you there faster than inbound marketing techniques. You should compare the time it takes a Business Development (BD) rep to get productive (typically 2-4 weeks for first appointments; 2-3 months to full productivity, as in my last company) with the time it will take to get the equivalent number of inbound leads (8-12 months? more? Results vary greatly per company).
2 – Outbound prospecting can get you the RIGHT type of leads in ways that Inbound Marketing may not
There may be situations where your target audience may not respond to the Inside Marketing campaigns or when you have a very clear set of targets that you can actually call 1:1.
This was the case for one of my recent companies, where we were selling a very expensive product to a C-level audience. Our buyers were CIOs and Line of Business Executives. We were good at engaging and educating the technical users with lots of content but were not getting the attention of our buyers. This was at odds with the success I was experiencing when personally engaging our target buyers.
I decided to camp out with the Marketing team until we figured out the way to replicate and multiply that success. I ended up sitting down with one of the BD reps and experimented over the course of a summer until she started getting replies to her emails, answers to her calls and appointments set.
Here is what worked:
- ‘Bridging’ at the executive level: using my CEO title worked for me, as C-levels wanted to engage with someone at their level and who is talking to their peers. Instead of reaching out as a BD rep as she would have done normally, she was now sending emails or placing phone calls on my behalf. That worked…
- Personalizing messages: I used to research my C-level targets to make sure I came across as relevant, credible and meaningful to them. When possible, I leveraged a common connection, or in absence of that a reference in the same industry, and mentioned personal or corporate issues that I uncovered during the research. I had her document my research process, try it out herself and craft personalized messages. That worked too…
- Short messages: My messages, either emails or voice mails, were short and straight to the point. Like the C-levels I was approaching that have overflowing inboxes, I make my decision whether to delete an email or not in less than 3 seconds. She (reluctantly at the beginning) eliminated all the text related to our product features, focused on the minimum necessary text to establish credibility and relevance, and finished with an easy call to action such as an introduction to their personal assistant for appointment setting or a referral to the proper executive. That worked as well…
Half of the targets that engaged did take the appointment themselves. The other half did refer us to other executives in their organization, which went a long way in securing those meetings.
Do not underestimate the importance of research in this outbound prospecting process. For us to be credible and relevant to our C-level buyers, we went through the following steps in our research sessions:
- Checking of possible common connections: are there any colleagues, customers, partners, vendors, analysts, investors,.. that we both know and that we can mention and leverage as a personal connection? (We mostly used Linkedin and Pardot for this)
- Understanding of their business: review of annual report, website, analyst research notes (we used Google and proprietary investment banking research).
- Understanding of their personal agendas: interviews, blogs, presentations, videos… (we used Google and Youtube; consider using other Prospect Intelligence solutions)
- Selection of the right case study: what success story would they mostly relate to, preferably in their same industry (case studies by vertical industry were developed by our Marketing department)
Engaging C-levels in Fortune 2000 companies is as hard as it gets and you may not need to go to this extent in terms of your research, especially if you are selling a more commoditized product to an audience of technical users. I would still argue though that some level of research and more personalized approach will get you better hit rates.
The importance of measuring Outbound Prospecting performance
There are several Marketing Automation solutions out there that can help set up outbound marketing campaigns and measure results, such as Marketo, HubSpot, Eloqua (we used the latter, though we were considering switching in the end as their support got really bad after the acquisition by Oracle).
The way we went about it was to first map out the outbound prospecting process. In our company, it looked like this:
email -> call -> conversation -> meeting or demo (depending if C-level or tech user)
We then measured both ‘elapsed time’ and ‘conversion rates’ for the completion of each step. We monitored the progress over time which gave us good benchmarks for the new hires to hit and allowed us to uncover issues, when metrics started to deviate at a certain step in process. Ultimately, the variable compensation of our BD reps was tied to the number of sales-accepted-leads (number of meetings set).
Last, we measured the cost of your outbound leads. You will want to:
- Compare the cost per outbound lead to the selling price of your product: make sure that the cost to acquire a customer (CAC) does not surpass what you will get in terms of proceeds (LTV-lifetime value of a customer), or you’ll find yourself in front of a broken business model.
- Compare the cost per outbound lead to the cost per inbound lead: as the inbound marketing machine ramps up, compare the quantity, quality and cost of the various type of leads to determine what marketing mix is right for your company.
Please share your personal experiences and opinions in the comments section below, so we can learn more about the subject from one another.