If you don’t know what success is, you won’t know if you’re there
One question we always ask new clients (and existing clients launching new programs) is this: how many qualified leads do you need to meet your ROI goals? This question is not always easy for the client to answer, but having a clear goal for the program helps us know when we need to course-correct to attain those goals. Without an endpoint in mind, it’s impossible to know if we’re headed in the right direction.
Last month we launched two new clients, and posed this question to them while developing their programs; Client 1 was able to answer, and Client 2 was not. Client 1 had years of experience in cold calling, and had a very good estimate of the number of qualified leads that could be converted to sales and the average value of each sale. This company was able to estimate with a good level of confidence the number of qualified leads needed per dollar invested in the cold calling program in order to achieve its ROI requirements.
Additionally, this client had a significant budget and is able to invest in a consistently high volume of calling per week. This is important because appointments are usually not set at constant, even levels. As long as VSA is able to generate the required number of leads in the budgeted period, the client has agreed to renew the program. Again, if we meet goals, the client will renew again, and so on and so on. Having these clear milestones makes it very straightforward for the account managers to know whether we are underperforming and, if so, take the necessary steps to get back on track. We know what to expect from the client, and the client knows what to expect from us; this is the start of a great business relationship that we hope to continue to cultivate.
The launch of Client 2’s program, as I’m sure you can guess, did not go as smoothly. This client had never used cold calling to generate leads, much less work with an outside cold calling agency. Therefore The company was unable to estimate what proportion of leads could be converted to a sale. (Their main source of new leads up to this point had been referrals, which close at a higher pace.) Every company starting a cold calling program for the first time will go through these growing pains, and sometimes the only way to determine what number of leads is required to achieve ROI is to implement a program and see how it goes. Still, it’s best to at least perform calculations based on educated guesses so everyone knows if we’re profitable, or really off-base. For Client 2, we are producing leads, but are unable to assess whether we are producing at the right pace because we don’t have a clear standard to measure our progress against. The client isn’t sure if they are satisfied because they don’t know what they need to achieve with this program. We are spending more time in discussions with them, and working on defining these benchmarks for future programs.
Sometimes you have to learn by trial and error, and you shouldn’t avoid starting a cold calling program simply because you don’t know how many of those leads will end in sales. However having a clear goal is invaluable to the cold calling team and management, who need to be able to assess performance and progress in order to continually grow and adapt to your program.
Before you start your program, spend some time thinking about how you will know you are reaching your ROI, and communicate those metrics to your team. With a clear destination in mind, you can make sure you continue to head in the right direction.