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Word Play: Leveraging Machine Learning to Understand Email Sentiment
Outreach's Yong Liu travels to Cyprus to present our advancements in machine learning to understanding of email sentiment.
When I started my management journey, I thought I had my candidate profile down to a “T”—ideal hires were bold, aggressive, loud, and a little pushy. Come to think of it, they were everything we hate about salespeople.
And then I met a man named Sam Nelson.
If you’ve heard of Outreach you’ve probably heard of Sam. He leads our Agoge program here at Outreach, and he’s got blue hair so you can’t miss him. When Sam was an SDR, he was so different than what I was used to hiring—he was patient, thoughtful, strategic, and he was kicking everyone’s ass.
I said to myself, I have to get some more Sams on my team. As I expanded my candidate profile, I continued to look for people that had grit and were driven, but I opened up to what form that may come in.
When I hired people like me, I knew how to motivate them, I knew what buttons to push. But after watching Sam in action, it forced me to change my coaching methods and realize the tremendous benefit of building a diverse team. As I changed the dynamics of my team, I had to stop relying on my gut and start looking at the numbers in my coaching sessions.
Outreach makes it very easy to measure and analyze important metrics, which I call the “Science of Sales.” Outreach provides easily accessible data so I can keep my finger on the pulse of each rep and diagnose where s/he is getting stuck so I know what aspect of salesmanship to focus on with my reps, or which area in the “Art of Sales.”
Within Outreach, there are 5 key metrics that managers should be monitoring regularly. In the visual below, starting from the bottom, they are: Quota, Sales Accepted Lead rate, Meeting Hold rate, Call Conversion, and Connection. The numbers on the left are conversions, and the numbers on the right are daily and/or monthly expectations.
We should think about these stats in terms of leading indicators and lagging indicators. A leading indicator is the number of dials a rep makes per day, and a lagging indicator is their ability to reach quota.
Essentially, if all your leading indicators are in line with where they should be, your reps should be able to hit their quota. All the ratios in between are critical to monitor because if we have reps making 60 calls per day but not hitting quota, we know the funnel is broken.
Our job as managers is to identify those bottlenecks and coach our reps to reach the expected ratios, coach their reps with leading and lagging indicators, and track and improve each of these numbers in Outreach.
One of my favorite parts of my job is talking shop with other sales development leaders. And it’s typical for us to discuss metrics. Often they start with how many dials does your team make in a day, or how many prospects should we have in sequence? In order to answer this, we have to channel our inner Franklin Covey and begin with the end in mind. So we’ll start with my favorite number - quota!
Coaching with Rep: “This is a lagging number, the end result. The actions you take every day will determine whether or not you reach this number.”
In our world, a Sales-Accepted Lead (SAL) is a meeting set by an SDR that occurs and successfully meets 5 clearly defined criteria: opportunity size, prospect role, compatible technology stack, relevant workflow, and business case. These 5 SAL areas are indicators of a viable opportunity, or how many meetings become real pipeline.
As a manager, I think 12 is a meaningless number to a rep. It’s intimidating and if I got my first job as an SDR and my manager says, “All right, your job is to get 12 sales-accepted leads,” I would break that down into four weeks per month month, so three SALs per week, meaning I have to average 0.6 SALs a day. So, I might think that at the end of most days, I should get a SAL and I’m good.
But I'm guessing that you realize that I’m going to fail, and I'm going to fail because I broke down a lagging indicator on a daily basis. While mathematically true, it's kind of a terrible way to think because I can't control if I get a SAL.
However, I can control and influence the next four metrics.
Quota is a lagging number, which means at the end of the month, if you get to 12 it tells us that you did the right stuff. But when I’m communicating with my reps about performance, I want to break this down with leading measures: things our reps can control on a daily or weekly basis that tell us that, more likely than not, if you do these things, then you'll hit your quota.
Here at Outreach, our quota is 12 Sales-Accepted Leads per month for fully ramped reps. That’s the number that works for us, but it may not be right for your company. In order to generate this number, consider factors like:
Remember that compensation drives behavior, so we want to be sure we design SAL criteria that align with our company goals.
Coaching with Rep: “This number ensures that you are booking quality meetings that convert to pipeline opportunities.”
The Sales Accepted Lead Rate, or SAL Rate is the ratio of meetings held that convert to SALs. At Outreach, our SAL Rate is 84%. In order to reach our quota of 12 SALs, our reps need to have 17.28 meetings hold or occur on average per month.
If this number is low for a certain rep, I look for any existing patterns, like prospects showing up to their meetings, but not converting to pipeline. They’re not qualified. After a meeting holds, if it’s not a SAL, our Account Executive will indicate which of the 5 SAL criteria is missing.
Here’s an example of a rep on my team, “Andy.” Andy is a great worker and has a positive attitude and strong work ethic. He listens to training and implements feedback from our coaching sessions. He’s actually booking plenty of meetings, and prospects are showing up but he’s still missing his number.
Here are some issues that Outreach helped me identify when I knew which number to focus on:
Targeting the Wrong Titles
There are 5 main personas we target at Outreach, but titles can be tough because they vary at each company. I can use Outreach to see all the titles of all the prospects Andy has scheduled meetings with, as well as those he is actively reaching out to in order to check that he’s aligned with our targeted personas. For example, there are Business Development Managers at some companies that may manage a team of reps, but at other companies, they’re individual contributors. We do have a strategy for reaching out to people in the latter case, but this is not a prospect we should target heavily. In Andy’s case, I was able to see that from the meetings that he booked but did not convert to SAL, 37.5% of them were with the wrong person, telling me that I needed to revisit any questions he had about how to find and reach our targeted personas.
The second largest category was Business Case. At Outreach we identify business case as the ability to work, nurture, or win over the next 6 months. When this criteria is missing, we usually find that the SDR is scheduling a meeting before identifying any pain or an opportunity where Outreach can come in and add value.
I thought Andy was strong on the phones, but what I found was that he was so focused on getting the prospect over to the AE that he wasn’t taking the time to understand their business needs and how Outreach could fill it. The science of sales identified the problem, and the art of sales can help him fix it.
Coaching with Rep: “Are you piquing enough interest and adding value on the call?”
The meeting hold rate is the ratio of meetings scheduled against those that actually show up. Our team average is 83%. We know to reach that 17.23 meetings held each month, we need to scheduled 0.8 meetings per day. My own team jokes, “A meeting a day keeps the manager away.”
Sometimes this number can be luck of the draw, but more often it’s an indicator of two things:
Is the rep driving enough value on the cold call, either through discovering a pain point or presenting a use case that peaks enough interest, and second, is the rep minimizing gaps in the handoff process by confirming the meeting? Sales is a people business, and we know that we can only control our own side of the fence--so sometimes our reps take all the appropriate steps to be sure the prospects show, but they still don’t. Let’s focus on those variables that we can control and those steps we can take:
Coaching with Rep: “Indicates the quality of conversation on your calls and the strength of your call to action.”
The call conversion rate is the ratio of conversations with prospects against actual meetings scheduled. Our Outreach SDRs should have 3.6 conversations per day and turn 24% of those into meetings.
This is actually my favorite number to coach toward because it involves call coaching and how skillful an SDR is on the phone. When I’m working with a rep, I explain that this number tells me if they are having quality conversation and shows me the strength of their call to action, or closing skills.
I’ve also found that this number can be inversely related with Hold Rate. For example, one newer SDR came out guns blazing. She scheduled about 40 meetings/month which is extremely high in our world, averaging about two meetings every day, and with 3.6 conversation/day, her call conversion rate was off the charts. However, her Hold Rate was very low. She was booking a ton of meetings, but prospects weren’t actually showing up. This opened up a ton of opportunities for call coaching.
Communication with Rep: “Am I reaching out how and when my buyer wants me to?”
The number we’re going to look at here is call connection rate. It should be around 6% - the number of calls it takes to speak with a prospect. This only includes connections with qualified prospects, and excludes gatekeepers or unqualified prospects. But can we control (or influence) the number of people that pick up the phone?
One of my reps came to me last month and said “No one is picking up the phone.” Well, all of my reps tell me that no one is picking up the phone, so I’m able to use the data in Outreach to see if in fact, no one is picking up. So this particular rep came to me and I said, “Well, let’s take a look at the data.” It turns out his was 3%. Sounds like pure bad luck, right? Not quite. Let’s take a look.
So our reps make 60 calls a day with a 6% connection rate, they talk to 3.6 prospects each day and schedule a meeting with 24% of them. This should give us a little less than a meeting a day (0.8). With an 83% hold rate, about 17 meetings will run, 84% of those will convert to Sales Accepted Leads (or pipeline opportunities), which will get them to quota.
If you are a quota-carrying SDR, I challenge you to generate your own conversion funnel for yourself. Begin with the end in mind - start with your quota, and determine how many meetings need to occur for you to reach it. How many meetings do you have to schedule for that number to occur? How many conversations do you need to have to schedule that many meetings? How many calls do you need to make to have that many conversations? Boom! You’ve built your own KPIs (or leading indicators).
If you are a manager, I challenge you to generate a funnel with averages for your team in the same manner. To take it one step further, compare each of your reps to the average conversions. Mandating KPIs becomes a much easier conversation if the reps understand exactly how it will help them reach their quota and make them money. Need help? Outreach has your back! Reach out to your CSM or to me directly by email at email@example.com or on LinkedIn.