*Editors Note: Live updates from the Sales Hacker Conference Boston are brought to you by PipelineDeals. PipelineDeals is sales and CRM software trusted by thousands of companies to increase sales. Follow us @pipelinedeals.
By Peter Gracey, Founder & CEO of Quota Factory
At the start of any given quarter, I believe that a SDR (sales development rep) needs to have at least 1000 different accounts that they’re working at any given point. The Outbound Index is the end of quarter number that you can expect to be added to your pipeline from your outbound sales process.
There are a lot of different factors that go into the end-of-quarter number, or Outbound Index. The three main things that we look at are:
- Reach Rate – the % of outbound that actually nets a meaningful conversation. The operative word here is “meaningful.” Only flag decision maker and influencer conversations. I think that this is the ultimate SDR stat to determine if your training is worth it. Goal should be 35% reach rate.
- Pass Rate – the % of conversations that are qualified and passed to sales. To have this in place, you need to define and adhere to qualification standards. Why should you track this? It’s another key SDR KPI and it holds sales rep accountable. Goal should be 12% pass rate.
- Pipe Rate – the % of passed opportunities that reach your pipeline. There must be a meaningful next step for sales in your pipeline. Usually the first stage of your sales pipeline tracking and this will help you determine your outbound ROI. Goal is a 70% pipe rate.
Here’s a real life example from my company in Q4 of last year:
- Our reach rate was up 4.5% to 40.17%
- Our pass rate was down a full 1% to 11.22%
- Our pipe rate was up 4% at 73.4%
- Overall index 33 (e.g. from 1000 accounts, 33 reached my pipeline).
- Great news, right? Maybe not…
What this data told us was that:
- Our conversations went up huge. Our database was accurate and this was a good thing.
- Pass Rate went down 1%. This meant that our database wasn’t well targeted and this means we’re not talking to the right people.
- With the pipe rate up, we know that the demand is still there but the landscape has changed.
What did we do with this information:
- Increased contacts per company number to four per account we were targeting. In other words, we know that there are more people who “think” they’re the decision maker so we doubled the number of people in a company that we were talking to.
- Adjusted our outbound call plan to accommodate the increase in contacts. We needed to shift our expectations in terms of what we can expect from our SDRs based off of this increase in account contacts.
- Prepared our clients for a dip in Q1 leads while we cast a wider net. This was difficult, but we knew we needed to work more broadly within the organizations that we were prospecting in order to improve results for our clients.
Thus far, in Q2 of 2014 we’ve maintained our reach rate, and improved our pass rate and pipe rate. This means that we’ve improved our overall index to 35 and that we’re adding two more people into our clients pipelines. This is roughly $200,000 more ARR into our clients pipelines.
- Track your index so that you can run a better shop
- Interpret the data in your own way
- Doing something is better than nothing when it comes to trying to improve your KPI.
- Help your team understand why your index is the way that it is.
One suggested hacks: use your index to target the types of technologies you should purchase to improve your Outbound Index. Figure out what your “Wasted Technology Fund” is.