Outsourcing sales can be a nerve-wracking experience for firms that are used to conducting all of their sales activity in-house. Organizations often feel that they would lose visibility into and control of their sales process if they entrusted a third party with such a critical component of their success and growth.
However, when done right, outsourced sales should actually result in a higher degree of visibility and confidence in your sales process. It all comes down to tracking 3 fundamental metrics that will provide you with a full picture of your sales funnel and where you need to pivot in order to be successful.
Customer Acquisition Cost
When it comes to the financial productivity of a sales program, be it outsourced or in-house, the CAC (customer acquisition cost) is the be-all-end-all. Your CAC represents the cost of winning a customer, and can be calculated by simply dividing the sales and marketing expenses spent on acquiring customers by the number of customers acquired in the period the money was spent. Every organization should have a CAC target, and that target will be highly dependent on the lifecycle and industry that your company is in. Are you heavily funded? Are you in high-growth mode? Are you trying to break even or make profit?
Once that target is set, your CAC should be your north star and main point of reference for determining the efficacy of your outsourced sales program. If your outsourced sales team is bringing in customers, but at a cost far above what you can afford to spend in order to hit your financial targets, something needs to change. On the flip side, if your outbound sales team is able to meet or exceed your CAC target, it’s time to double down your investment and continue scaling to fuel growth.
Cost Per SAL
Cost per sales accepted lead (CpSAL) is another incredibly important metric for measuring outsourced sales performance. A sales accepted lead is defined as an initial discovery call booked with your intended prospect. Your cost per sales accepted lead should ultimately be informed by your CAC target. If you know the total amount you should be spending to acquire a customer, you should be able to reverse engineer your sales funnel using actual or assumed conversion rates to generate a target cost at every stage in that funnel. This target CpSAL should be frequently adjusted if the conversion rates you see in the funnel tend to move.
While your CAC is your most important metric, it also takes the longest time to measure. If your sales process is multiple months long, it will be a while before you can actually calculate how much you spent to acquire that customer. You need a way to figure out if you’re on the right track earlier in the sales process. That’s where the cost per sales accepted lead comes in, and why it’s so important to measure your outsourced sales team against this metric. If they are unable to fill the top of the funnel with cost-efficient discovery calls, the rest of your funnel simply won’t make sense.
Lead To SAL Conversion Rate (By Channel)
The key to any successful outbound sales funnel is healthy demand generation. You could have the best closers in the world on your sales team, but it won’t do you any good if you’re not able to generate qualified leads in a repeatable, scalable manner. A successful demand generation strategy is often predicated on channel diversification. You should have multiple channels working for you, whether that’s paid search, teleprospecting, email, or networking. And you need a good way of measuring how these channels stack up against each other and against your CAC target.
That’s why it’s so important to measure your lead to SAL or Opportunity conversion rates. Say your outsourced sales team is producing dozens of leads via cold email every week, but these leads are so low-quality that they barely show up to the discovery calls and, when they do, they’re rarely a good fit. Organizations often make the mistake of chasing lead volume, when in fact they should be chasing lead quality, and measuring the quality of each channel in producing leads that represent viable business opportunities.
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At FullFunnel, we believe that sales is a metric-driven, scientific process. The success or failure of any program boils down to the sales team’s ability to hit certain fundamental financial metrics and targets. We’ve built hundreds of outsourced sales teams that have achieved demand and financial productivity for organizations across the globe. Request a consultation today to learn more about our methodology, and how we can help you get the sales team of your dreams.