“Is my business development team spending too much time outside of activities directly related to interacting with prospective customers?” It is an age old question for Sales Leaders. What is the correct relationship between the amount of time a rep should spend performing tasks such as list building, planning, pre-call research, template building, self-education on your products and market Versus actually reaching out to prospects? How can I determine which teams and individuals are spending too much time on one versus the other?
These are not new questions, but they are important ones. According to the Bridge Group, sales productivity is the number one challenge for 65% of B2B organizations. A productive sales team maximizes results while minimizing the resources expended, such as cost, effort, and time. Whether your Business Development team is measured on opportunity creation, appointments set, or both, understanding the relationship between a rep’s volume and efficiency can have a huge impact on results.
Volume is the total number of ‘touches’ (calls, emails, InMails, voicemails, Skype messages, hand written letters etc.) that reps are using to communicate to leads and prospects in a given time period. Efficiency is the rate at which they are converting these touches into desired outcomes such as appointments set, demos booked, or opportunities created.
The below formulas are a simple, yet effective tool that every Sales Leader should hold their BDR manager accountable for using to achieve the correct balance between volume and efficiency in order to drive results. It can be used by a BDR Manager to diagnose where an underperforming rep might need to course correct behavior, hone in on where to focus coaching efforts, and as a tracking tool to measure progress.
If you track touches, appointments, and opportunities use this formula:
Number of touches = (Opp Target /Opp Conversion Rate) / (Appointment Conversion Rate)
If you track touches and opportunities use this formula:
Number of touches = Opp Target / Opp Conversion Rate
Definition of Terms
- Opp Target: The rep’s goal for the number of opportunities that they aim to create in a given time period (Year, quarter, month, or week).
- Number of Touches: Outreach attempts (calls, emails, Inmails, voicemails, Skype messages, hand written letters etc.) Also known as total activity.
- Opp Conversion Rate: The rate at which Appointments convert to Opportunities
- Appointment Conversion Rate: The rate at which Touches convert to Appointments. Appointment may also be a Discovery call, Demo or whatever your company uses to label an initial scheduled meeting with a prospect, BDR, and Account Executive.
To use the formulas, fill it out for your total team numbers and for each of your team members. Three months of your most recent data should do. You now have a data driven snapshot showing how historic volume, efficiency, and results are related. Now it’s time to use this tool to drive improvements in productivity. Here are a few ways it can be applied:
If your team has underperformed, you can use the formula to drill into where the issue is. According to Vorsight, top performers make 120.8 dials per day. Manipulate the formula to solve for how many touches your team would need to produce in order to exceed quota given their actual historic conversion rates. If this number exceeds 120.8 per day, you have an efficiency problem, and need to focus your coaching on how to improve this (feel free to replace the 120.8 dials with whatever you feel the maximum number of touches a rep could realistically make in a day). If not, your team simply needs to increase it’s number of touches.
On the other hand, manipulate the formula to understand what conversion rates will be required in order for your team to hit their Opp Target given their historic number of touches. According to the same Vorsight study, top sales reps are converting about 10% of these touches into meetings. If the conversion rate required to hit the Opp Target given actual historical number of touches exceeds 10% (or your top performer’s conversion rate), you have a volume problem. If not, your team simply needs to focus on improving its efficiency.
Once you’ve identified whether a struggling rep or team is having a volume or efficiency issue, the formula can be used to help them focus in on corrective behaviors.
You can also use the formula as an educational tool by tweaking each number to show your reps how, by improving in their volume or efficiency, they can dramatically improve their results. Use this to create a quarterly, monthly, weekly, and daily goal for their volume and efficiency, and be sure to track, measure, and hold them accountable to it.
“If you make 200 more touches this quarter, and your conversion rates stay the same, you can source two more opps!”
“If you improve your Touch → Appointment conversion rate by 10% this quarter, with the same number of touches, you could source 3 more opps!”
Now that they understand what their target volume and efficiency should be, it’s time to work on the improvements. If a rep or the entire team is clearly struggling in one area or both, put a specific coaching program in place to help them increase their volume and/or efficiency. It will also be important for you to understand what exact skills and activities lead to higher volume and more efficient prospecting for your particular sales playbook so you can train new hires accordingly.
So far you’ve:
- Diagnosed where an individual or team is struggling
- Identified what the ideal Volume and Efficiency is
- Conveyed to your team members how improving in certain areas can lead to higher quota attainment
- And put a goal and coaching plan in place to drive improvements in weak areas
Now it’s time to track progress. Each week, perform a weekly retrospective on how the team and individuals performed versus their target volume and efficiency. This will allow you to intervene with new training or reinforce old training in specific areas if you notice any trends as well as to have a heightened sense on the productivity of your team.