Want your sales team to win big on the phones? You have to understand the compound effects of cold calling.
You know how compounding interest works. You earn “interest on interest.” So you’re not only earning interest on your original investment, you’re earning interest on the interest that accumulates over time.
Can that same thing happen with cold calling? Can you win on your wins? Yes, you can! And I’m going to show you how.
Today we’re digging into sales benchmarks. This will be fascinating for those analytical salespeople who love to crunch numbers. But trust me, everyone can gain something from it.
And look, it’s just important to have a baseline understanding of what’s possible in terms of sales output/performance on a small- to medium-sized sales team. So we’ll lay this groundwork first, then we’ll dive right into the avalanche effect in sales. Let’s go!
RELATED: Smash Your Limiting Beliefs — Cold Calling is Not Dead
Run the Numbers
Let’s say you have a sales team of 15, with a 2:1 ratio of SDRs to AEs. In other words, you have two SDRs for every AE on the team. Great. Now what kind of KPIs are in place to hold everyone accountable? What are the numbers? You have to know the numbers.
This is low-hanging fruit. Give your salespeople specific numbers they have to hit — and hold them accountable to hitting those numbers. So, maybe SDRs have to make 80-100 cold calls every day. And AEs must also hit quota with a healthy win rate of 35% (at least ⅓ of deals are converted).
Obviously, you know your industry and business landscape best. But I recommend assigning aggressive and ambitious numbers. Once you have these numbers, you can track, measure, and improve.
And now we can dive into the compounding effects of cold calling.
RELATED: The Rule of 7 In Cold Calling
1,000 Cold Calls A Day
So your sales team is putting in 1,000 cold calls per day (realistically, this number could be 3,000-5,000 if you have the right sales stack in place). On these 1,000 outbound dials, you can expect your team to book 20 meetings per day, which is a very conservative 2% meeting-booked rate. (I like to see this number closer to 5-10% honestly.) And now we’re talking 100 meetings in any given week. So although it’s a bit ambitious, with 10 SDRs, you should be doing 400-500 meetings in a month. That’s a lot of goods or services sold.
Welcome to the big leagues. And welcome to the cold calling avalanche…
The Cold Calling Avalanche
Now that your team is putting in thousands of calls per week, things are really starting to heat up.
First the snowball…
With each passing day, your outbound efforts gain momentum. And momentum is everything in sales. You can think of each cold call like another revolution of the sales snowball. The more revolutions, the bigger the snowball becomes. You and your team will close deals and ring the bell. And each ringing of the bell motivates the team to do it again and again.
A good follow-up strategy is critical in the sales snowball phase. You’ll be booking meetings on the first touch, sure. But by following-up with half-interested prospects you’ll also be booking meetings off your past efforts. (Remember “interest on interest”!) You already did the heavy lifting days or weeks ago, and now it’s time to cash in with a quick follow-up call. This goes for both SDRs and AEs.
Then the avalanche…
The sales avalanche happens when that single snowball doubles, triples, and begins to multiply out-of-control. The crucial factor here is the referral. Yes, the referral. The holy grail in B2B sales.
A sales referral, in this context, is where your buyer not only buys your product, but also gives you the name of another decision maker who could also benefit from your product or service. It’s the one-two punch for sales success. Because look — hot lead referrals convert about 25-40% of the time (I’ve gotten this up to 60%) compared to cold leads that convert at under 5% on average.
A solid referral strategy is a no-brainer. When an AE closes a deal, they should ask for a referral before hanging up the phone. After all, your buyer’s confidence is at an all-time high (he just purchased your offer based solely on your value-rich conversation and the mutual trust you’ve built), so you have to strike while the iron is hot. Another approach is to ask for three names, but in recent years I’ve found that one good referral beats three so-so referrals.
Beware: I warn against being inconsistent with cold calling, follow-ups, and referrals. Just like investing early and often allows your interest to build over time, so too does cold calling consistently (and at high volume!) allow the sales avalanche effect to occur. If you dabble, you can’t win. But if you commit to massive action, you can’t lose.
Your Flywheel Matters
Not long ago I wrote an article about the sales flywheel and how it differs from the sales funnel. (I highly recommend giving it a read.) Well, cold calling is the first and most important point in the flywheel. But there are other points to master: attract, engage, delight, advocate.
At each one of the flywheel points you have the opportunity to build even more momentum. So the sales flywheel you put in place is vital for the sales avalanche. These are two very different — but equally important — metaphors to help you dominate in sales.
Final Words
The formula is really quite simple: Time + Massive action = Success. Of course, there are nuances and things to consider when it comes to defining “massive action.” But the main idea is to always have irons in the fire. And I mean hundreds — if not thousands! — of irons in the fire.
Why is this so important? Well, so that you can have the best offense and win at sales. But also so that you play solid defense when necessary. Recessions happen. Your buyers aren’t always buying. And success isn’t always linear in life. But with momentum on your side, and your eyes set on the long game in sales, you are almost guaranteed to come out on top.
To really get the sales avalanche working for you, remember to 10x your sales team’s cold calling output, always follow-up with prospects, and always ask for referrals when deals close. So get out there and make it happen. You’ve got this.
Until next time…
Johnny-Lee Reinoso