As we left Part 3 of this series, I promised to lay out the parameters to answer the question, “Is it possible to industrialize the top of the funnel?” Let’s dissect!
The first industrialization question is “Can we obtain needed inputs in sufficient quantity, with sufficient quality, and at low enough cost to support either continuous production (the ideal situation) or seasonal production with sufficient throughput to cover the overhead of the business?”
This one is easy. The answer is “Yes!” — but with the following qualifications: to obtain sufficiently prospect-rich contacts, we can query available information sources with sufficient precision to make a target list of suspects that share a combination of company characteristics (cutely called “firmographics”) and roles, as inferred from the text in titles, sometimes augmented by a formal schema of roles; to qualify as an industrial input, processing this list of suspects must have a sufficiently high yield to justify the cost of making the list in the first place; and the list must be big enough to be worth constructing a factory to process it.
There is no shortage of sources for contact lists. Let’s imagine we can obtain such a list as input for our revenue factory for $1 per contact (mostly because we can generally do so more cheaply), and that when we subject that list to detailed analysis (more on how to do this later), we determine that 50% of these suspects work for intrinsically qualified companies.
What’s your problem?
What do I mean by “intrinsically qualified”? I mean that these companies have the problem that we are in the business of solving. They don’t need to have a budget to solve the problem, nor even independently know they have the problem. (Sometimes we need to educate.) And it doesn’t mean they are ready to buy a solution to their problem right now. It just means they have the problem, and that solving the problem will either make them money, save them money, or reduce some identifiable risk to their business.
To reiterate, I am just making up the $1 per contact. If it turns out the best you can do is $5 per contact in order to achieve the 0% level of intrinsic qualification, so be it. And if it turns out that the best you can do with your queries on available data is a 20% level of intrinsic qualifications, so be it again.
Like in Biology class?
So, we have inputs, probably in a reliable stream or at least a big enough pool to potentially justify making a factory to process them into paying customers. “Potentially justify” is, however, a worrying phrase. Let’s dissect further.
It turns out there is “machinery” available to generate conversations with the human beings represented by the contact information in our input stream. One of these machines, ConnectAndSell, is capable of consistently generating a sufficiently predictable rate of conversations per hour to allow us to calculate the flow rate and all-in cost of conversations, meetings, deals, and bookings. Depending on a number of factors — industry, title, time of day (less important than you might think, however), day of week (even less important), month (every business seems to be seasonal) — ConnectAndSell will usually deliver an average rate of conversations per hour of use between 5 and 15. The low end of this range yields 40 conversations for a full day of phone outreach, and this can be done every day, which is an important key to industrialization. A critical-path machine that runs only on certain days is a huge problem for industrialization: what do you do with the resources that are idle when the machine is down? There are ways of handling challenges like this, but they tend to be expensive and complicated, and therefore best avoided.
This machinery, however, can’t operate on its own. It may be able to produce a telephone (i.e., “remote listening and talking”) connection with a target person, but needs a person to do the talking and the listening (a sales rep of some kind) in order to turn “connects” into “conversations.”
It all adds up
Let’s look at cost for a moment. After all, if these conversations that are being manufactured at some known rate don’t also have a known cost, we can never figure out if it makes economic sense to manufacture them. The cost elements are:
- The cost of the data needed to support a unit of output (a conversation).
- The fully burdened cost of the labor needed to produce a unit of output (again, the conversation).
- The all-in cost of running a conversation machine to produce a unit of output (still a conversation).
Conversations are gold mines
Interestingly, conversations are not universally considered to have independent value. This view is simply incorrect. They not only have value, but that value is easy to assess. For example, every conversation provides either validation that a prospect’s contact information is valid and accurate, or evidence that it is not — both valuable outcomes. A conversation may yield additional intelligence that the target prospect is, in fact, not the right person to be talking to about this category of offering.
Conversations, often with gatekeepers, are also the only reliable way to find out if someone is no longer at the target company or, conversely, to validate that they are still there. Also, the meanings of people’s titles vary from industry to industry, company to company, and rarely map perfectly to roles; a conversation, therefore, is one of the few reliable ways of finding out what someone really does for a living. And if their answer is “Not me,” a conversation is the most efficient and reliable way of discovering “If not you, then who?”
Much more subtly, but more important from an industrialization perspective, a conversation has the effect of increasing the odds that a given prospect will engage with the company and consider buying its products in the future. This is an actual transformation of an input (a “cold lead”) into a more valuable output that serves as a source of future inputs (a “follow-up”), which is a contact enhanced with a date of intended future conversation and with information to increase the odds of meaningful engagement when that future conversation does take place. This additional information takes the form of a one-to-one script that connects the future conversation to the conversation that just occurred, transforming a “cold call” into a “warm call” by linking the future conversation to a past relationship, however brief. These follow-ups are like oil refined into gasoline: they contain a lot of the same stuff but burn much hotter; that is, follow-up conversations yield a much higher rate of meetings than cold conversations, usually by a factor of 2x or more.
Victory is mine!
At this point, we could declare victory and say we have industrialized a key part of almost every sales process. We know how to obtain a consistent flow of commercially available raw material — contact records selected for their potential to be intrinsically qualified. Further, we know how to use conversations to consistently convert that input flow into a valuable intermediate output — conversations that sort those inputs into four valuable categories: “Yes,” “No,” “Not Me,” “Not Now.”
- One of those categories, “Yes,” serves as a flow of inputs into downstream sales processes.
- Another one, “No” (our judgment that “No, there is no reason to ever speak again”), becomes both a waste product and provides negative feedback with potential for tuning our filters for acquiring future contacts.
- “Not Me” outputs serve as an input to a referral process that increases the quality of contacts used for future conversations.
- And “Not Now” outputs serve as an input to a follow-up process that also increases the quality and reduces the cost of future conversations, because these contacts have been filtered for propensity to answer the phone. Also, they have been conditioned by exposure to our first conversation with them to be more accepting of the next conversation. And we have had the opportunity to execute precision email and advertising campaigns based on the outcome of our first conversation.
And when one can declare victory, one should. So I would love to. But in the world of industrialization, we must also understand both fixed costs and variable costs, as well as the question of scaling, before victory or defeat can be properly ascertained. These topics will be covered in Part 5 of this series, which we approach with anticipation. Because if we can truly industrialize sales, we can consider our Sales Department as a candidate for a role in shaping company strategy — and that would be revolutionary.