“Build a good product and they will come.” Product managers and engineers in the technology industry have too often touted this mantra. This has lead to some of the infamous tension between salespeople and engineers who believe the product will sell itself.
However, many cases in history have shown that this is not true and sales for great technology only took off after they were backed by a strong distribution plan. For example, PayPal had the core technology of transferring money using the Internet but was floundering when they were targeting PDA users, who found no need for the technology. Growth really only began when they focused their marketing to target Ebay power users.
Another example is Dropbox which, in 2011, famously declared that it does not need salespeople. Now, amidst dropping sales, it is building a new office in New York to grow its sales team.
“What about my inbound sales,” you ask. “Customers are signing up every day to try my product and the sign-up rate is growing.”
While inbound leads, with high conversion rates and low acquisition cost, may look great to a company, they are the kiss of death to any organization aiming to grow exponentially. They lull the company into a false sense of growth that is not sustainable in the long run, experiencing a decline in year-over-year growth.
Inbound leads typically have a smaller average account size and often end up being customers who cost more due to their needs. Inbounds also often come from the same industry where word-of-mouth has generated interest about your company, resulting in a lack of customer diversification. A lack of outbound activity means that you could miss out on potential customers in other industries that may be more profitable.
In contrast, outbound sales allows a company to hunt after the big names, sell to a greater number of industries and target the customers who are the most profitable. Think about it, the largest companies are not spending time to look around for new products/services to try; they are using some type of existing solution. However, they may benefit greatly from your product/service, and it is up to you to make a strong cold outbound sale to show how your product/service can bring value and improve their key metrics.
Here at Outreach, the average MRR of a customer from an outbound lead is about three times that of a customer from an inbound lead.
The downside is that outbound can be expensive, with low customer conversion rates significantly driving up the cost of customer acquisition. With intelligent follow-up platforms such as Outreach, you can multiply the throughput of your outbound sales team by almost three times while increasing conversion rates.