An Iterative Approach to Outbound Sales
Revenue is important, which is something that you might expect a group of sales consultants to believe. Nevertheless, one of the elements of cold outbound campaigns that we most appreciate is the fact that even an unsuccessful campaign provides strong ROI. In fact, one of the reasons that we tell clients to expect a three month (or more) warmup period is that the failure of an initial campaign (or two, or three) is not a bug in the system, but a feature. We think that launching value propositions into the market and seeing where they land is the best, quickest, most accurate, and most cost-effective way to learn how to refine sales & marketing for an early-stage company.
To illustrate, below is a report that we sent to a client after ~2 months of sending outbound emails. We have obviously redacted many of the details, but it provides a useful framework to understand how we interpret and leverage these early failures to build winning campaigns that stand the test of time.
As expected, it took 6-8 weeks to target correctly and get the campaign up to speed, which is what we almost always see. We have now identified a winning strategy based on the data at hand.
Our first set of leads was entirely generated from a leads database. We emailed hundreds of individuals using this sequence, generating a 63% open rate and 13% response rate. These are both on the higher end of what we typically see and the response rate in particular is quite good. Nevertheless, none of these responses generated meetings. Anecdotally, as we were forced by database search parameters to use industry and size of company as our targeting criteria, the types of leads in the campaign were not the best fit.
We subsequently ran a test sequence with a recycled custom lead list. Though it was a relatively small sample, we were able to generate a 67% open rate and 3% response rate. However, none of these responses yielded meetings. It may be that the small sample we pulled was not a good fit, as it would seem that these leads would have been a better match.
Our continued efforts led us to a second leads database. We have experienced some success with these leads, albeit through a very different funnel shape than the one we saw with the original database. Overall, hundreds of prospects have been emailed (the sequence is still in progress), yielding a decent 53% open rate and a relatively low 2% response rate. Nevertheless, nearly 30% of responses were positive responses. The fit for the companies that responded is still somewhat questionable and so we will have to continue to experiment in order to see if the meetings are worthwhile from this source.
Finally, our most successful strategy has been a second, revised custom list. This seems to be the winning strategy: It has generated a very strong 72% open rate and a solid 5% response rate, including 3 meetings. Anecdotally, these meetings seem to be better matches than those sourced through other channels. The sequence is still in progress and so these numbers should improve further.
Our next iteration is going to focus specifically on the types of companies that yielded meetings using similar techniques as those that worked well in later sequences. As we will be generating a custom list, we expect the targeting to remain strong.
As you can see, we believe that getting it wrong is the way to get it right, which is something that you might not expect a group of sales consultants to believe.
Have your experiences with outbound campaigns been similar? How long do you typically find it takes to figure out the right value proposition in your campaigns? Do you think this is driven more by price point, industry, or something else?