3 Responses to “Inbound Marketing by the Numbers”

1. Axel

   November 20th, 9:21 pm

   Big numbers! 2000 cold calls to get 1 new client?! Hope their profit margins are big enough to justify that kind of investment.

   Reply
2. Stuart Armstrong

   December 4th, 11:35 am

   The law of big numbers….(can work for ya or agin ya)

   IMHO the more commoditized your product (servers, PBX) or solutions (ie IT on-site repair services) the higher the top of funnel cohort needs to be. Consider a prime market such as non-retail SMB’s between 20-150 employees with multiple locations across Canada. There are about 9,500. Which ones are in the buy cycle NOW? Some are- maybe 1% due to the recession= 95 deals going down NOW. How big a sample do you require with an acceptable standard deviation to generate an acceptable number of A leads? How many hours will it take to achieve this? How long is the “buy cycle”,(ie by the time you get to the decision maker it may be too late).

   Based on my personal experience working with HP’s US SMB telemarketing leadgen company CAS Systems we needed to do a MIN of 500 hrs of telemarketing to contact 1,500 companies at a rate of 10 dials/hr and 2.25 contacts completed/hr which netted for HP about a 5% A lead rate or 1 lead every 10hrs.= 50 leads (of which 25% closed). And this was with a WORLD CLASS BRAND NAME in 2007 when times were good.

   A min of 3 trained inside reps using clean lists and the best CRM/CTI software were put on each program- the shortest being 500 hrs. (20 day program so we hit prospects while they were still IN the BUY cycle)

   How big a sample are we talking about? Microsoft was also a client and we did a 33,000 hour, $2MM program with 40 ISVs solutions ISVs into various vertical markets. (ie. ERP,etc.)
   Leads> about 3,000 worth $118MM and $37MM closed sales. Lead rate for some ISV only 1% BUT these were niches markets and very high value.

   …if only our salesreps would work harder…
   500 hrs of 1 salesreps time @ 6hrs day of tele prospecting = 83 days ays to fill their funnel OR 4+ months.

   (VERY FEW “Account Execs” will do more than 4 hrs solid cold calling per day)

   IF the BUY cycle (for that COMMODITY), is shorter than 4 months, that rep is screwed. IF that rep has NO incoming leads from the website, adwords, referrals, reputation, etc. He is screwed. These simple metrics account for the 50-60% turnover in IT telecom and provide credance to sales productivity studies from CSO, Sirius, Proudfoot showing GRIM metrics for those CEOs who do not understand these sales 2.0 concepts.

   So what is the probability that the IT Manager (or CEO) in many of those 90 companies above IN THE BUY CYCLE will Google in “IT infrastructure” or “VOIP PBX” etc. and start short listing his suppliers? (and thats AFTER reaching out to his existing relationships first and verifying YOUR reputation in the market).

   Will he find you first OR will you be able to MANUALLY ferret through 1,500 companies FAST ENOUGH to find him?

   Good luck.

   Stuart

   Reply
3. Eric

   December 4th, 12:24 pm

   Stuart;
   Thanks for the information packed comment! Your numbers and the logic of your argument paint a grim picture indeed, unless you get automated help.
   And if readers are looking at the reality underlying Stuart’s words and thinking, “I’m safe! My product is not a commodity – it’s the best of breed of something new!” Yeah, maybe now. But technology cycles are moving faster and faster and these days the time from brilliant idea to old hat commodity can be short indeed. Sooner or later, we – yes even Gossamar with our market-leading solution – will have to pour in these many leads to get one closed deal out the bottom.
   Happy prospecting.

   Reply