I don’t understand why it is acceptable for a process like cold calling (now often started via email) to work one in a hundred times–or in email efforts one in a thousand times.
I used to work for a major semiconductor manufacturer. In the chip business “yield” from a silicon wafer is critical to profitability. Teams of people spend their life pushing to get a few more chips out of each silicon wafer.
I picture how a company in the high tech chip business could survive when only 1 in 100 of their chips was usable (or 1 in 1,000). Meanwhile most high tech companies accept this level of productivity in their sales departments. This content is for those who are not willing to accept those success rates.
This page describes a framework that I have found over the last two decades can really change the math on prospecting. Here’s the framework:
- Are you contacting the right people?
- Do you know how you help?
- Is it a good time to talk about this?
- Does the person you are contacting trust you?
1. Are you contacting the right people?
Before you can go setting up meetings, you need to figure out who you need to meet.
You want to deal mostly with the companies that spend a lot of money with you and are easier to deal with. The trick of course is finding them.
Look for commonalities in your existing clients to help you find a profile for new clients. Consider obvious demographic characteristics like:
- Size of company (how many employees or revenue)
Then also consider “psychographic” elements of what makes a company a good client for you. Examples of these might be:
- Company believes in outsourcing
- Company believes in long-term partnerships
- Company likes to use the latest technologies to get an edge
- People in the company are open to change and learning
- People in company love soccer and ice cream (my ideal client)
Finding companies to target based on your past clients is a good start. Now look a little more closely at your clients and think about the types of people that buy from you. You are trying to get meetings with people, so we need to think about who these people are.
A common issue here is that we think too narrowly about the people we want to get meetings with. If you sell a product of a reasonable value to a reasonably large company there will be several people involved in the buying of such a product (6-10 based on Gartner’s research).
Each one of these people could be a great starting point for you. They could be what Miller Heiman call a “coach”, someone that will give you information on what is going on in the account– the kind of information that can massively increase your chances of winning a deal.
Think about the people that use your product as well as the people that may get involved in evaluating it. Each person could be an entry point into that company.
While you are thinking about people, think about other people that may be connected to this company. These people could be investors, clients or vendors to your target firm. This larger set of people may know a lot about what is going on in that firm and who’s who in there.
Avoid banging your head up against the same wall over and over again. Get meetings that give you important intelligence on an account. It can be a critical step in filling your sales pipeline with great opportunities.
2. Do you know how you help?
To get people to accept a meeting with you, you are going to need to explain to them very succinctly what you can do for them.
The best way to figure this out is to start in your “prospect’s shoes”. Figure out what they need to get done and see how you can help with that. Then tell them what you do to help them achieve what they want.
As Aaron Ross explains here, try to answer the question “how do you help people?” If you focus on how you help people, your brain starts focusing on the benefits you bring to people.
Humans, aka your prospects, don’t care about your problems (you may have figured this out by now). They care about their problems and they care about getting rid of their problems and going on to rule the world (or something like that.)
Consider the following questions to help you get into your prospects’ shoes and see how you can serve them.
Do you know what your prospect needs to get done in the next month, quarter and year? Do you know how they get measured? If you know your prospect’s goals, you have a chance of explaining how you will help them get there.
Do you know anything about your prospect’s personal goals? These are often what really matter. Does your prospect want to get promoted, do they want to avoid being sacked? Many people in top jobs know their tenure is not long (see these statistics about average CxO job duration.)
Who is your biggest competitor? Most potential deals are not “lost” to a company. Most deals are lost to “status quo”.
Your prospect decides to do nothing. Things stay as they are. Most people find it hard to change. Change usually takes a lot of work and some pain. Hence, most people will stay where they are if the benefits to going through change are not large and obvious.
But does your prospect know what “do nothing” really brings them, especially in the future? Do they know the full impact of leaving things as they are? Do they know all the implications of this? Could things get ugly later on if they don’t change something now?
What happens in the future if they do change? How much sunnier will the future be? Can you explain this clearly to your prospect?
What plans does your prospect have to hit their goals? Will they likely get there without you and your solution? Can you show them how your product will help them hit or exceed their goals (and keep their job?)
What are the likely risks/scenarios hidden in your prospect’s plan that you can highlight for them and help them remove? Does your offering help them mitigate risk? Can you explain how their chances of success go up by including you in their plans for next year?
3. Is it a good time to talk about this?
Change is good for you when you’re selling as when something changes in your prospect’s world, it often creates a need. Sometimes that need is something your product can address and hence a sales opportunity is created.
Trigger events come in two “flavors”: “observable” and “unobservable”. That is those that are observable from outside the company (i.e. public) and those that are not.
Examples of “observable” trigger events are events like senior management changes (like a new CEO), some merger or acquisition activity, company growth or new funding (such as VC funding).
These items tend to be announced, particularly for publicly-listed companies, as it’s the law in many cases and these companies are constantly being followed by Wall Street analysts who ply their trade from this information.
This information that is in the public domain is the stuff you tend to get from tools like Linkedin (especially Sales Navigator), Insideview or Owler. These tools in general add value by processing the “firehose” of public information out there; filter it for you; customize it to your target account needs and then presenting it in an easy to digest way to you the frantic salesperson.
This way you can get what you need in the way of trigger event information at the beginning of your day before your Starbucks has had a chance to cool down. I’d argue in the real world this is quite valuable.
But the publicly observable trigger events are just the tip of the iceberg. There are many more “unobservable” (from the outside) trigger events popping up every day at most of your target accounts.
Unfortunately, as these trigger events are not public information you will need to work harder to get this information. It won’t come to you in one neat dashboard or email every morning.
These unobservable trigger events are items like: which projects are getting funded, which projects are not getting funded or are getting cancelled. Middle management changes that don’t make the news or the company doesn’t particularly want to promote, such as who’s being let go and who’s taking their place.
But these sort of trigger events can be even more important to your selling than the public ones, for example if the person leaving or arriving runs the area that your product serves, you really do want to know about that.
When you’re job hunting, career coaches tell you to set up “informational interviews”. An “informational interview” is not a job interview it’s a meeting with someone in the firm but not the hiring manager. In this meeting you ask background questions about the company so you are fully informed when you finally do get an official job interview.
There really is not much difference between job hunting and selling a product or service. When you’re job hunting, you’re just selling the product called “you”.
When you’re selling to a key target account and you want to know about those “unobservable” trigger events, the way to find out is set up some “informational interviews” with people at your target accounts.
The person you meet for an “informational interview” does not even have to work at your target account. They simply need to know what’s going on there and they need to trust you enough to share the information with you. This is in fact the exact definition of a “coach” as created by Miller Heiman in their book Strategic Selling.
Your “coach” can be a salesperson in a non-competitive firm that has sold to your target account for years and now is “embedded” in that firm so they know the scoop on a lot of the politics there. It could be a friend who works at the firm, but not necessarily in your target department, or analyst that follows the firm, or a consultant, or IT person that maintains their systems etc. Each person that can “coach” you can help you find those “unobservable” trigger events that could be “gold” for your approach to that account.
Of course, “informational interviews” like this take a bunch of time so it’s not worth doing this for all your accounts. For many accounts, the “observable trigger events” served up by Linkedin or Owler or Insideview will be plenty.
But if you have a few big “whales” you really want to land then “informational Interviews” to find “unobservable trigger events” could be your ticket to a big sale.
Armed with the information from your informational interviews (and some solid Googling), you can now approach a senior executive in your target company and stand out from the rest of the 8AM-dialing crowd.
You can tailor the messaging in your emails and voicemails to touch on something very likely to hit one of the top items on your target executive’s list.
You can also feel good about this too, if you’ve done some thinking about real solutions to their top problems. You really are going to try to make their life better by relieving something that is stressing them out.
4. Does the person you are contacting trust you?
There’s an alternative way to get meetings with prospective clients, but sales people don’t generally use it. Oddly enough they often do use it when they need a job and in this case they call it “networking”. I had to come up with a cool name for using networking in sales so I call it “social calling”.
Whatever you call it, I think the math on the effectiveness of a networking approach vs. a cold calling approach is pretty interesting…
There’s a professor of psychology at Oxford University called Robin Dunbar and he did some research on how many relationships we all have. He figured out that we have about 150 relationships we can maintain (this number should be higher for sales people and entrepreneurs involved in developing their business.)
If you know 150 people and each of your connections (“first degree connections”) know 150 people then you can be referred to 150 x 150 people = 22,500 people.
The data above suggests you can get a referral to 22,500 people. Now, as you know, if you’ve done any selling at all, referrals work way more effectively than cold calls.
This is because of trust.
When a friend tells me that I should speak to you, I usually do. I do it because my friend is vouching for you. If I don’t do it, then I risk meeting my friend at the next social get-together and having my friend asking how I got on with you. If I say I didn’t take your call, I risk making my friend think I am a serious plonker.
So when you use a referral, even if it’s from your aunt, the buyer has skin in the game. Hence the conversion ratio is drastically different to cold calling where the prospect does not treat you as another real human.
The clearest way to take a “social calling” approach is to use Linkedin to look up who my friends know that I want to connect with.
Here’s some data from my experience doing this:
- Time taken to research my contacts’ contacts to find someone I would like to speak to (“2nd degree connections” in Linkedin speak), 20 minutes
- Time taken to write an email to my friend to make the intro, 10 minutes
- Time taken to follow up for the intro when friend forgets about it etc., 16 minutes (4 emails at 4 minutes each—easy emails to write)
Here’s some conversion data based on my experience of doing this:
- 50% of the time on Linkedin my friends actually know the people they are linked to (50% of the time they connected with someone and have no real relationship)
- 50% of the time with the follow-up above I get an appointment with the target person (yes, referrals really are that effective, see “plonker” above.)
Doing some math
- Total time invested to follow up for an appointment with each identified contact = 45 minutes (46 minutes actually but that makes the next part messy, so 45)
- Conversion rate to appointment 50% * 50% = 25%
- Total time to get an appointment 45 minutes times 4 (1/25%) = 3 hours
Therefore, using a social calling approach most people will take 3 hours to get an appointment with someone in the 22,500 people they can reach.
If you buy in to my data and math above, it makes sense to use social calling (networking) approaches to sell your product or service. In terms of time, a networking approach will get you an appointment in 3 hours vs. a cold calling approach that will take 9.75 hours. It is 3.25 times more efficient.
I think the math above does suggest that sales people and business owners should make a networking approach to prospecting a major part of their sales and marketing mix.
Many owners do start out with a networking approach but eventually lose sight of it as they use up their initial obvious relationships and then go on to hire sales people that are trained to cold call (only).
I have found that with social networks like Linkedin making it much easier to see who-knows-who, a networking approach to selling can be carried on indefinitely and at scale. Maybe it’s time for you selling to become more social…
Here’s a way to greatly increase your prospecting odds without an introduction. This approach is all about “social proximity” as Jamie Shanks calls it.
Here’s why you should consider adding this “social proximity” approach to your prospecting efforts:
- In its 2014 research report, How to Make Your Number, Sales Benchmark Index found you are “4.2 x more likely to get an appointment if there is a personal connection with a buyer”
- In my experience success rates in getting intros using this approach vary from approximately 1 in 2 to 1 in 5, vs 1 in 100 or 1 in 330 for cold calling.
Using the “social proximity” approach I am describing here is a direct approach. There is no transfer of trust (“social capital”) from an intermediary as there is in the approach I described in my last post.
What makes this technique work far better than cold calling is the trust that exists because you have a common bond with the person you are approaching. This common bond can be a shared educational background, professional association, military, place you live (kids at same school perhaps) etc.
The strength of feeling that exists in this common background will determine your success rate along with how well you approach the other person.
Many of the communities you can leverage provide their members with a directory, for example an alumni directory for a school, a member directory for a professional organization or a directory of families for a town’s school.
In most professional situations you can cross-check this information by looking the person up on Linkedin. This helps you check their current information and get more details on their background.
Even though you share a common bond, you still need to give the person you approach a reason to speak to you. They are very likely stressed out in their job and giving up their time to speak to you is still a big ask.
You need to have your value proposition together and if you can add a trigger event to your approach then your success rates will increase even more.
Explain why you think you may be able to help their company and mention that your research showed something changed that makes it seem like now is a reasonable time to connect.
Approach people with a common background to you and you will see a big uptick in your ability to get meetings. “Birds of a feather do flock together.”