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January 2016

Prospecting 101: why email works better than cold-calling

Conventional wisdom in sales tells us that cold-calling works better than emailing. Conventional wisdom is usually wrong.

There is a good reason that salespeople talk so loudly about cold-calling and this has nothing to do with results. Put simply, a person claiming to make 50 cold-calls per day seems more hard-working than the guy in the next cube who is busy with an email-based process. Cold-calling is loud. Everybody around you will know you are busy. So if you care more about maintaining the perception that you are a hard-worker than you do about delivering results, then by all means you should continue to live in cold-calling hell. But if you are open to a better, easier way to proactively fill your sales pipeline with great opportunities, keep reading.

If you are selling complex, high-value solutions to the enterprise and are trying to get in touch with executive-level decision-makers, then email is the most effective, efficient, and practical way to introduce your product or service. I run a global lead generation agency. We use email exclusively to arrange executive-level introductory calls and on-site meetings for our clients. Here is why our email-only strategy works better than cold-calling:

1) Email is read by everyone, even CEO's (or at least their admins).

2) Email allows you the opportunity to perfect and clarify your message and then repeat that message again and again (cold-calling requires a new performance every time).

3) Email can be easily forwarded to the right person and then responded to without any friction or effort on your part.

4) Email allows your prospect the time to think, whereas cold-calling usually illicits an automatic "no" response.

5) Decision-makers do not answer their phones to unknown numbers. If they do, they see it as a rude disruption.

6) Email allows greater reach more cost-effectively. With the right approach, you can easily reach out to ever decision-maker across your target market every quarter.

7) Cold-calling is usually done by very junior talent. When you have one shot to impress a CEO, do you want a telemarketer in India reading a script? Or would you rather have your top account executive taking a scheduled and confirmed call?

Email works. But just because email is the most effective medium for outbound prospecting, that doesn't mean it always works for everybody. Success in outbound prospecting is all about strategy and execution. You need the right message delivered to the right person in the right way. Here some of the variables you will have to perfect for success in email prospecting:

Strategy:

  • You need to identify the right target market for your products or solutions and then build a list of every company that meets your criteria (a target account list)
  • You need to understand which titles within the organization are most likely to buy and go after them
  • You need a message that distinguishes you from the hundreds of other messages in your prospect's inbox

Execution:

  • Even when you have the right strategy, you need to achieve the right volume. Successful outbound prospecting campaigns will result in introductory meetings with between 10% to 20% of your target accounts each quarter. I have seen this to be the case across industries. So if you want 10 - 20 new introductory phone calls from outbound prospecting, you go after 100 accounts. If you aren't able to achieve this result, then something is wrong with your strategy or execution.
  • You need to turn prospecting into a machine. You have to research the right contacts to build list, send emails to a set number of new accounts each week, and follow-up with second-round emails the following week in the case of non-response. You need to manage responses to that you know which accounts to continue with and which accounts to put on hold. You need to chase down referrals and lukewarm prospects week after week until they agree to a meeting. You need a system. Effective prospecting is a well-oiled machine.
  • When the introductory call finally does happen, you need the right talent on that call to establish credibility and advance the deal forward. The point of prospecting is to close deals. You (or your organization) should be able to close 1 - 3 deals out of 10 introductory calls or else you are doing something wrong in the sales process.

A world-class sales organization is one in which all of these pieces are working smoothly. In my experience working with dozens of companies to implement successful prospecting campaigns, very few organizations are getting all of these pieces right. Even when they are, they aren't consistent enough and they often aren't able to replicate results across geographies.

Check back for updates on how to craft the perfect prospecting email. In future posts, I will also share some of the specifics about how we run these highly-effective campaigns for clients worldwide. 

Posted by Mark Manney (mark.manney@infobeing.com).

The conflict-free family budget

According to a 2009 article by Ron Lieber, 45% of divorces are due to differences over finances. This is no surprise, considering that the majority of families don't even have a budget. According to Gallup, only 1 in 3 Americans prepare a detailed budget. Without a budget, how can you tell which partner is spending more on frivolous purchases? How can you prioritize between the husband's desire for new golf clubs and the wife's designer handbag? Without a budget, how do you know how much to save and how much to spend?

Running a family without a budget is like running a business without looking at profit and loss. Yet coming up with a budgeting system that actually works for you can be challenging. You need a realistic budget that allows you to live and isn't too much of a burden to track. You also need incentives to stick to the budget. In short, you need for life with a budget to be better than life without a budget. I have the solution.

For most of our marriage, my wife and I actually operated the business of running a family without a budget. "Just be reasonable" was the mantra, but it didn't work. Operating without a budget was a failing strategy for us for the following reasons:

  • We were spending too much. Many months we were losing money.
  • It wasn't clear who was being responsible and who was splurging (according to my wife, it I me who was splurging).
  • We were fighting about money. Worse yet, we were worrying about money.

So we came up with an ideal approach to family budgeting that has served us well for the past 6 months. I will show you exactly how to prepare a family budget you can stick to, but first I want to share the benefits we have seen with this particular budget:

  • We no longer feel any guilt or anxiety about purchases we have budgeted for (regardless of monthly income)
  • When we are profitable, we both have some amount of personal money to spend however we want without the need to explain anything (i.e. more freedom)
  • We have been able to travel to Italy, Croatia, and Florida on trips that were paid for upfront
  • We dramatically increased our income because we were more motivated
  • We saved, even as both of us have splurged like never before (guilt free)

 The results have been amazing. Now I will explain how we did it.

Budget

Figure out your basic monthly expenses

Step 1:

Go through all of your financial statements from an "average" month. Choose a month when you were not shopping for Christmas and were not taking a vacation. How much did you actually spend? You don't need to analyze every detail or every category of expense, just get that number for reference.

Step 2:

List all of the expenses that you think are vital to your way of life. How much do you realistically think you should spend on groceries even during a month when your income isn't great? How much wine will you realistically drink? Do you go to the gym? How much gas to you use in a month (you can get this from your statement if needed)? What is the basic amount of entertainment you need? What is the minimum you will spend on restaurants? How much do you need to spend on cloths per month? Break all of this out on a spreadsheet.

The key to this step is that both of you have to agree. If one of you doesn't agree on a basic expense, then it doesn't make the budget. These are minimums that you both agree on. Keep in mind that, the more "profit" you can show in a month beyond this basic level, the more you will personally have to spend on yourself. I'll get to that later, but the point is that you have a personal incentive to cut this "minimum monthly budget" down to an actual minimum.

Step 3:

Compare the total amount you plan to spend in your monthly budget to the amount you actually spent in your example month (your step 1 amount). Your budget should be less than your example month, or you'll need to go back and take some things out.

Step 4:

Compare the monthly budget with your total family monthly income after tax. Do you earn enough to cover these expenses and more? If not, your first priority is to earn more money. You need to face reality. For the time being, you should decide whether to decrease the budget so that it is in-line with your actual income, or whether you want to spend in a deficit over the short term as you focus on earning more money in the coming months. Any deficit spending (i.e. monthly loss) has to be tallied. You can't get to a profit for you to split unless you first cover any past losses.

Step 5:

When you have prepared your budget for the month, move the money to where it needs to be for the coming month. Withdraw all of the cash you need for the month, and place enough money in your shared, family debit account to cover what you have budgeted for plus $1,000 in case you go over. Now you can't change any of this throughout the month. You'll have to stick with it.

Keep in mind that part of your budgeting should include a minimum amount of cash that you each need to have in your wallet for the month. This is your personal money. There can also be a "family cash" amount for miscellaneous purchases (restaurants, cleaning services). Put this in a separate wallet and take it with when you go out with your child for ice cream. Plan all of this ahead. Be realistic about how much money you actually need to make life livable.

Now enjoy your month. Stick to the plan and spend budgeted amounts without any guilt.

Track results on the 1st of next month

At the end of each month, you'll have to go through the statements to figure out what you actually spent. Put the actual amounts in a column on the monthly spreadsheet next to the budgeted amounts.

Figure out how much you actually spent and how much money you have actually earned (after taxes). If you run your own business, you will have to budget quarterly tax payments in your expenses.

Your actual amounts should become the projected numbers for next month's budget.

Step 3: Divvy up the thirds

Now you are left with a total profit (or loss) for the month.

If you end up with a profit, you should split it 3-ways: 1/3 of the profit goes directly to you as spending money, 1/3 goes to your partner, and 1/3 goes to savings. The higher your profit each month, the more money you will have to spend on yourself. Your partner has nothing to say about the way you spend this money. Withdraw it as cash, put it in your Paypal account, do whatever you want to with it and answer to nobody. You have earned it.

While the initial process of coming up with a budget can be difficult, once it is done you should be able to move forward in your relationship without ever having to fight about money. You will each learn to stick to a budget. You will not purchase anything extra for yourself until you have earned your portion at the end of the month. If your partner ever comes to you with a request to buy something, the answer is, "Use your own money if you have any left." Otherwise, if it isn't on the budget, it isn't allowed.

With this approach to budgeting, both of you will be free to spend money guilt free...after it is earned! If you decide, instead, to use the profit on a family vacation, you both have to agree. If both of you agree on a purchase, it comes from the family money. If both of you do not agree on a purchase, then it has to come from your personal money.

It is extremely important to be honest and trustworthy. If one partner cheats the budget, it is an extremely serious offense. In that case, everything falls apart and you are in serious trouble. You have to commit to honesty and transparency.

Also, note that before you split any profit as personal money, you have to cover any past losses. You are only counting profit and loss from the first month you are following this program. Each month thereafter, you will track "total to savings to-date" since starting this program. That is your key metric. If there is any loss in any month, it has to be made up with future profit before anybody splits anything.

I hope you find, as we have, that this approach to family budgeting leads to less arguing, more successful results, and more personal autonomy.

Posted by Mark Manney (mark.manney@infobeing.com).