The product you sell influences your prospecting outcomes — a lot!
OK so that’s intuitively extra-obvious. But the way management acts in most companies you would think everything, including a “me-too” product in a very competitive market, could be overcome by the sales force. I’ve heard countless conversations in senior management meetings and with sales people themselves that imply the sales people are at fault in selling such-and-such a product. I don’t think so.
Here’s some real world data (and yes, some of it makes us look good and some of it less so, but this is perception as I hope you will see below) Ratio 1: we looked at the number of dials our inside sales people are making to the number of conversations they are having and, Ratio 2: the number of conversations they are having to the number of appointments we could set for outside reps.
Here’s what we found “Ratio 1”, number of dials to conversations, is remarkably consistent, it ranges from 5-15 but the broad average is 10. So when prospecting to people you don’t know (“cold calling” but I have an issue with that phrase) it takes us an average of 10 dials of the phone to speak to a decision-maker/executive (does not include speaking to assistants or others).
This data in itself can spawn a whole discussion, “cold calling does not work” or “cold calling does work” – sort of depends which “party” you belong to. But my belief is this number is going to come out approximately the same for everyone who uses basically this same approach since it’s a function of the buyer not the seller (it’s about how busy and screened we all are today).
Let’s look at “Ratio 2”, number of conversations to appointments (aka moving the sales process forward). Unlike “Ratio 1” this number varies widely. For some projects we’ve seen this number as low as three (3) at the other extreme we’ve seen this number as high as forty (40) – big difference. And big (big) difference in the happiness of us and our clients (or if you work in an internal inside sales team, or a team doing your own prospecting, your CEO).
OK, so what was the difference in the projects. Did we do a good job on the projects where “Ratio 2” was good and a lousy job where “Ratio 2” was not so attractive? Did we just have “rock stars” on some projects and “losers” on others? No. We had similar people on each team and we constantly try to improve our processes and results.
Taking a more scientific approach (without the usual emotion attached to sales results) I believe the data shows the main variable in all this was the product. In the cases where we were achieving some great results the products are truly interesting to it’s market and at the other extreme the products are in a crowded market and their value propositions are not clearly over-and-above their competition.
Of course, there are ways to improve sales results of even me-too products in crowded markets (we talk about them all the time on this website) through smart sales and marketing strategies but ultimately all firms should realize buyers are smart and sales people are not slackers.
Not every product is created equal. Some products are more equal than others.