Prospecting for leads is a vital part of the sales process. But, how much time should your sales team spend on lead prospecting?
It depends on how your sales department is set up internally. Some sales teams are responsible for the entire pipeline, while other companies assign prospecting to the sales development team to fill the sales pipeline for the sales team. Finally, other companies outsource the entire prospecting process.Once we have determined which model best describes your company, we can discuss options for improving the prospecting process, especially the outsourcing option. First, let’s look at how much time your sales team should spend prospecting for leads in these three types of sales organizations.
The Complete Sales Organization
This type of sales team has decided to undertake the sales process from start to finish. The sales team is responsible for the entire sales cycle - understanding the market, prospecting for new business, qualifying leads, creating opportunities, closing deals, implementing the product or solution, and then following through to cultivate referrals.
In this model, members of the sales team need to allocate their time in different ways. Therefore, we recommend that salespeople who work the entire sales process spend 30-40 percent of their week prospecting for leads.
There is a potential pitfall of the sales team not reaching that percentage by finding other things to focus on besides prospecting for leads. If prospecting is not a salesperson’s singular focus (at least for a dedicated time), they will often prioritize other aspects of the sales process to avoid calling prospects.
Or, a salesperson will decide to cram their entire prospecting time for the week into one day. Perhaps they have scheduled a “call blitz” on Friday. But, as luck would have it, something suddenly comes up on Friday. Or, a project that was supposed to wrap on Thursday gets pushed back to the end of the week. Now, the prospecting process is “justifiably” delayed another week.
The best practice is to space out prospecting in chunks throughout the week. That could be four hours on Monday morning, four hours on Tuesday afternoon, and another 4-6 hour block later in the week.
Three years worth of research from InsideSales.com reveals the exact best days and times to prospect:
- The best days to prospect are Wednesday and Thursday.
- The best times of day to prospect are 8:00 a.m. and between 4:00 and 5:00 p.m. near the end of the workday.
- Late afternoons are 164 percent more successful than early afternoons right after lunch. You do not want to prospect between 1:00 and 2:00 p.m.
The takeaway from the data is to make sure you move prospecting time around your schedule during the week. For example, only calling in the mornings or on Mondays will cause you to miss prospects that are never in the office in the mornings, or who always travel on Mondays.
Also, trying to cram a full week’s worth of lead prospecting into a one-day block of time is simply not productive and too risky for your company.
If you find that the sales team is struggling to spend the appropriate amount of time on lead prospecting, then consider alternatives to housing the entire sales life cycle in your company.
The Specialized Sales Organization
In this case, the company decides to separate the sales process into divisions or segments and hire sales development representatives (SDRs) to focus specifically on lead prospecting.
To support SDRs, the sales development team is should be fully staffed to support the lead prospecting function. This model can be effective because SDRs are not burdened with tasks such as sending out quotes, account management activity, presentations, and proposal development. They can be laser focused on prospecting and motivated to fill the top of the funnel with qualified new business prospects.
For this type of company, we recommend the prospecting team spend at least 90 percent of their time prospecting for leads.
The only things that should pull SDRs away from prospecting are (a) coaching or training from the sales manager or (b) product training to learn more about the products or services they are marketing.
All other time spent should be lead prospecting. The SDR’s specific process is taking a cold list of contacts, qualifying them for a meeting, and guiding the prospect to the first meeting with the sales team. And repeat.
One of the biggest benefits to this departmentalized approach is being able to evaluate the team by measuring the results. There is no debating the data - the SDRs either made their calls, generated meetings, and contributed to the sales funnel effectively, or they did not. There is little gray area.
The biggest downfall or challenge with this organizational model is the turnover. SDR turnover might happen for two very different reasons on the opposite end of the spectrum:
- Good Turnover - Promotion: An SDR does so well in the role that the person is eligible for promotion from the sales development team to the sales team. That means needing to find more individuals to fill SDR slots.
- Bad Turnover - Burnout/Low Production: Conversely, this role is high risk for burnout because prospecting is their only function and it’s a difficult job. Also, the SDR might not be a good fit in the role, which may not be obvious until some time in the position. That leads to more turnover as well.
Because this is a relatively new role in the sales organization, companies are still learning how to recruit, hire, and manage these individuals.
Inside sales expert Trish Bertuzzi wrote a bestselling book, The Sales Development Playbook, that provides an outline of how to attract the best sales development reps, assess potential candidates for the role, and retain SDRs to reduce turnover.
This is important because some companies are unsure how many resources to devote to the sales development team or what the proper ratio of SDRs to sales reps should be. Best practice is to have a ratio of one SDR to every 2-3 sales people. Of course, every company and target marketing is unique, but this is a sound rule of thumb. We recommend this ratio because a productive SDR should be able to increase the productivity of 2-3 sales people in a cost effective manner.
But, there is another challenge with this model because a separate SDR team must be managed differently than a traditional “full-cycle” sales team. The prospecting team should be very metrics driven with daily and weekly productivity goals. It will also require a unique set of software and productivity tools to produce a positive ROI for the business. It is imperative that everyone on the team has full understanding of the process.
Finally, the SDR team is generally less seasoned than the sales team, thus requiring significantly more time coaching and developing prospecting skills. When a sales organization does not effectively plan for these differences and allocate the necessary budget to support the team, the team is likely to fail and not have a positive impact on the pipeline and ultimately the bottom line.
Measuring the financial impact requires a very simple equation. If the team is not making a positive contribution in six months, changes should be considered.
After experimenting with a separate sales development team, some companies determine that it’s best to outsource the lead prospecting process.
The Outsourced Sales Organization
Companies that decide to outsource prospecting either skip the entire second step or tried to build their own sales development team and failed for some reason.
In the first model, the company decided not to build a sales development team because it would take away from their core focus or required too many resources. In the second option, the company tried building an SDR team and decided they could not support the function.
When the decision has been made to outsource prospecting, the sales team no longer needs to focus on this function. In this case, we recommend the sales team spend little to 0 percent of their time prospecting for leads.
The main benefit of outsourcing prospecting is re-allocating resources and increasing productivity by not burdening the sales team with the specialized, labor-intensive prospecting process.
It also eliminates the constant battle some sales leaders face trying to get the sales team to engage in significant prospecting. We have all heard the cliche, “What keeps you up at night?” For most business leaders, a common reason for lost sleep is the nagging feeling that the sales team isn’t making enough calls to introduce their solution to enough potential buyers.
An outsourced sales development program allows a business leader to go to sleep knowing that there is a team of people focused and motivated to actually pick up the phone and call prospects to let them know about the company’s product or solution.
A firm that provides outsourced inside sales and sales development can handle the prospecting stage of the sales process with discipline and structure. They understand the nuances of lead prospecting, have proper tools to support the function, have a proven prospecting process, and have a fully-staffed team of professionals who can effectively talk to prospective clients.
The outsourced company simply hands “warm prospects” back to the client’s sales team to complete the sales process.
The main drawback of outsourcing is the risk of selecting the wrong firm to handle this phase of the sales process or selecting a firm that does not properly understand your company’s product or solution. It’s important to properly vet outsourced sales prospecting companies, otherwise the company risks creating a negative impression of their company. Those targeted prospects could disappear from a bad experience with the firm, and no business can afford that.
Another potential pitfall is not defining expectations between the outsourced firm and the company. Realistic expectations need to be set of how many prospects can be converted in a given time period. These expectations need to be reasonable and agreed to. Both parties should have a clear understanding of what a success partnership will look like, and how it will be measured.
ProSales Connection understands the level of effort that is required to prospect for leads as an outsourced sales development partner. That’s why we’re dedicated to outsourced inside sales, using our advanced technology and experience to help convert prospects to new customers. Learn more about using our service at ProSalesConnection.com or give us a call to talk about how we can help your business and sales funnel grow regardless of your current prospecting model.