Though many founders seem to be reducing, or even abandoning, outbound selling as a viable strategy – outbound selling is not a dead play.
With the right process in place, and the right people to execute it, outbound efforts can still create massive momentum when launching a startup or growing an existing company.
Ready to make outbound work?
On this episode of Evolved Sales LIVE, host Jonathan Fischer sits down with Kevin Warner, founder of multiple successful tech startups including leadium.io, to discuss how to overcome the challenges of outbound selling to create big wins and results for your business.
Don't forget to follow us on LinkedIn for more engaging sales insights and discussions! Happy watching!
Kevin Warner is a serial entrepreneur and founder of many tech and services startups. He’s currently the founder and CEO of leadium.io, a revenue pipeline accelerator and leader in SQL appointment setting.
Check out the transcription of this webinar episode below!
Jonathan Fischer 0:03
Welcome back. And thanks for joining us. I'm Jonathan Fisher. One of the toughest aspects of business development is outbound selling, it's become so challenging. In fact, some are even talking about abandoning it. Well, our guest today argues that with the right strategy in place, and the right people to execute it, outbound can actually be one of the most effective ways to launch your startup or create huge momentum for your existing company. And he should know, Kevin Warner is a serial entrepreneur who first made a splash for himself, as the co founder of science, a b2b sales services company, which grew like a rocket and sold for a huge profit. Kevin went on to become a highly regarded thought leader, executive advisor and mentor. And today, he's the founder and CTO CEO. And today, he's the founder and CEO of lidium.io. Kevin, fantastic to have you on the show today. Welcome. It's great to be here. So, Kevin, you actually, you know, like some of the other guests we've had on the show, I love it. When it's a guy who's been there and done it. So many of our listeners are going to be founders, sea level people trying to get these tech companies off the ground. You got some say about outbound? How did you arrive at the Insight you're gonna be sharing today?
Kevin Warner 1:16
Yeah, we've been in the outbound sales space for I want to say nine years now I feel like it's going on. And before we got into sales, I was always in a product development, back in 2011 2012, when app development was coming up really, really heavily. So product development, Customer Success side, and I was with one NASDAQ company we listed on NASDAQ IPO in 2013, and blew through $30 million without ever acquiring one customer. And it made me realize that that time, hey, it doesn't matter how great of a product to have, how great of what you think you do and you solve. If you don't have clients, if you don't have revenue, the whole company kind of goes under. So that was kind of my shift into sales, that aha moment of hey, maybe companies are actually driven on sales, I often say sales outpaces product, a lot of times your sales reps are selling what the product is going to do tomorrow. And when it was, you know, 2013 and 14, while I can't code and I can't develop, it was just that right time, the sales development market was taking off. The SDR role was starting to explode, outreach and SalesLoft were just coming into their own discover org and zoominfo. Were at their infancy. And so it was at this time when sales tech was starting to explode and build out this outbound, you know, high activity machine that you know of today, and my co founders and I said, Hey, why we're not tech people? Why don't we figure out how we can use tech to service more businesses. And that's where we started into the agency world. And since then, worked with over 1000 companies across every industry vertical, you can think of selling everything from rodent trackers to you know, multibillion dollar tech, and across every persona perceivable from the sea level. CSOs all the down to marketing managers, so a broad scope of what's working what's not across every industry?
Jonathan Fischer 3:20
Well, you know, it's not unusual for money to be lost, as well as gains when it comes to ventures. That's pretty expensive citizen experiments $30 million in go to market trials and mostly fails. That's probably another another episode right there. I'd love to learn a little bit more about what what was going on with all that. But in your case turns out to be the $30 million education that's paid you back many times over that over that it sounds like
Kevin Warner 3:45
yeah, I'll tell you the one thing it sounds unusual, like a large number of 30 million listed on NASDAQ essentially delisted never really had any clients or revenue to it, I'll tell you that's a common problem. When it comes to outbound. A lot of companies need appointments, you need top of funnel appointments that you can close close when revenue. But what we find is a lot of companies don't know their go to market you don't understand, really the you understand what you built and the problem you solve, but you don't know how to speak that to your prospect. You don't know how to drive that demand from them to get that conversion. So oftentimes, we're engaged with, hey, we need appointments. But we don't quite know how to connect with our end prospect, but we need you to set an appointment with them. So you built it, you have it, you maybe were successful in other verticals, but who you're targeting today, you don't necessarily know how to bridge the gap of that story and what you're able to deliver and solve in order to drive the demand to get them on a phone and essentially in a buying cycle.
Jonathan Fischer 4:49
Well, and perhaps it could be interesting for you to share. You've seen a lot of what's not working. Maybe before you give us your framework for what does work. Could you share I don't know three Five, what are the biggest misfires you see commonly in b2b sales today?
Kevin Warner 5:04
Yeah, one of the biggest misfires is I often sent now say what's old is new and what's new is old. And you see that cyclical process, if it's a strategy you're seeing, whether it be on LinkedIn, or whether it be wherever, if it's a strategy that you're seeing across the board, it's already too late, it's already out of fame, that's going to drive lower conversion rates. And so you should really be testing above the thought leaders or the gurus are in front of them. Because if you're doing the same strategies that everyone else is doing, one of the key problems with outbound is, you don't look different. It's easy to do outbound at scale. Now, it's easy to send emails, easy to place phone calls, and if you don't look different than everything else, then you're just going to fall into you know, the trash can, or, you know, the hang up on the phone. So you that's one of the biggest things is you have to think above the strategies that people are recommending you use. That's one of the most common.
Jonathan Fischer 6:04
So if you see someone selling a course, or reading a book on it, it's probably already peaked is that what I'm hearing
Kevin Warner 6:10
already peaked, and you don't have to go too far. So we often signed see too complex. And that's one of the biggest red flags as well. You're trying to make outbound too complex. Think of outbound as you're at a grocery store, you're checking out and somebody behind you says what do you do, that's how conversational that the email the phone call should be. Remember, if you're targeting the right targets, and you have your industry, segmented, your personas segmented, you can speak directly to those market segments. And you don't have to be complex. You don't have to throw in all the value propositions. But yes, if it's our it's already peaked, if you're hearing other people think about it, but the interesting part with that is, and I was just in a conversation with somebody the other day, strategies that were two years ago, are now popular again, if you're at the forefront, because nobody's using them anymore. Think of gifts. G if not gi ft. gifts were super popular in 2019 2020, you probably saw a lot of them people following up on emails, let's think about your outbound emails today. Have you gotten many videos or GIFs? Recently? Probably not. So now you'll stand out. And the idea without doubt is standing out so that you get your end prospect just to consume what you want them to consume, whether it be a value proposition, your message, 30 seconds on a phone call, you're really playing a game of standing out?
Jonathan Fischer 7:37
Well, that makes all the sense of the world and the clutter, and the noise only increases every day. So the challenge of standing out just continues to grow along with all of that. But you got some good ideas to share with us today. Why don't you lead off? What are some of the main key components if you will, on building an outbound strategy programmatic one that will actually work?
Kevin Warner 7:57
Perfect. The first strategy is think of outbound as an ad channel. If you're familiar with an ad channel link, or Facebook, Instagram, tick tock, those are three social channels very similar to email, phone, LinkedIn, on the social ad channel side of it, what companies do really well and what's a normal thought is segment your market as possible as much as possible, not only segment for the individual think an 18 to 25 year old if Nike is targeting you, but also how you consume that channel an 18 to 25 year old they might prioritize on Tik Tok versus Instagram, those same concepts that are normalized and marketing and programmatic ad campaigns and marketing you need to bring over to prospecting. Here's the reality of it is prospects are not the same. And yet it's become normalized that everybody it gets the same email. If you're targeting three prospects and an individual company, all three prospects get the same email. If you're targeting two different companies, they get the same email. But what you have to understand is the individual prospects consumed differently. We're all people, we read different books, watch different movies, we just consume media differently. Some are heavier, LinkedIn users, some prefer email, some prefer phone. So not only are you seeing that there's a preference when it comes to an engagement channel. But you're also seeing that the messaging and words within those channels should be adjusted based on that individual personality type, which you bring in things like HumanIK AI, and the advances they're having there. You can actually start to cater messaging still relatively at scale to the individual. The reason that I say this is kind of the fundamental thought process is creating a programmatic structure to it and segmenting as much as possible and then segmenting the campaign messaging as much as possible. You're running the analytics and that's really what the key without bound is one of your biggest rewards for outbound is how are people converting What types of conversations are you having? Should you adjust the messaging based on those metrics? Should you adjust your who you target? And maybe you're targeting the wrong person personas within an organization? Are you targeting the right industries or verticals? And one thing that I think you gather from that is not all verticals, not all personas will convert equally across email, phone and LinkedIn, or even outbound in general. And so how did those metrics of meetings booked actually then convert back to your closed one revenue attainment? And the easiest way to kind of put that all in is we've become normalized with this idea of an SDR should book 15 appointments, 15 appointments, 15 appointments, really, you don't care about appointments at all you care about revenue attainment, how much revenue was earned from it, who cares? If I set five appointments, if they become your five largest customers? Are you really going to be mad at me because I didn't set 15 appointments, you care about ROI, and revenue. And so what you'll find from the metrics of outbound is not all verticals, not all personas convert equally into revenue. And so you really have to look at the full pipeline, much like we do with ad campaigns, you're looking at impressions, click throughs, add to cart, how many people checked out? What was the cart value? Where they returned customers? You know, what was their ACV. And so you're tracking all that on that side. And outbound is still very behind in that it's still an activity centric mindset. Just do more phone calls, just do more emails, just book more appointments, and you're not actually measuring what you should be.
Jonathan Fischer 11:43
That makes a lot of sense. I mean, people talk about being a numbers game, and then people from the other side of the room shell, it's not a numbers game. But in a way, it's like what numbers? And what's the game? Right? And it's not a numbers game with by the owner here and you say you can you can correct me if I'm wrong, it sounds like you're saying it's not a numbers game, if you're just trying to do more, because more is not more is actually less. It's about doing the right things in a more targeted way. I really like that. A good follow up question that pops in my mind is this influence probably how you even execute in terms of the leadership team? I mean, if I'm gonna do a really good job of of segmentation are probably some good some folks that are great with the data, maybe maybe some people over from the marketing department come over to the sales side. And work with us on that. Maybe we could talk to that just a bit.
Kevin Warner 12:28
Yeah, well, one that brings up a more interesting question, which is sales development? Where does it sit marketing or sales? This was a big conversation topic in 2017 2018 2019. Where does it sit? Is it sales is the marketing at the time I think most people are agree that it sat under sales, I think it falls more under marketing today, just because of how marketing is typically running these types of campaigns. Data is pivotal, right? No matter what you do, it doesn't matter unless you have good data. If you have that messaging segmented, are you targeting the right people with the right personas, so not only do you have to have a good data source, but I also think that your SDR shouldn't be the one sourcing data. You should have a standalone data team, that data team should work closely with marketing on how do you segment the data that we're sourcing for the proper campaigns we're targeting? How do you use personalization based on who we're targeting as well? How do you validate that data? How do I pre determine if somebody is more prone to engage on LinkedIn versus phone versus email? And so you're actually looking at all those micro, you know, validation endpoints as well. So there's multiple ways you need to look at data. It's no longer a game of, you know, export list off of sales for LinkedIn Sales Navigator and upload into outreach and hit go.
Jonathan Fischer 13:55
Right, right. It's become a far more, more far more mindful entered and ever than it used to be it sounds like maybe maybe we need a new word like Sarkodie, or something. I don't know. There's definitely a need for there to be better integration. It's a lot of conversation today, for good reason. Well, so maybe you could you could go even deeper for us then. Because if we have good data, and we're doing a good job, you're segmenting that data. So we're selling it off logically like we would a marketing campaign. And we're reading ROI based on that. Okay, I get that piece. But now, what about the front end of that? What's the real tip of the spear look like? Now, how the how those conversations differ? What kinds of, you know, what kind of impact does this methodology have on the scripting we're using and everything regarding that side?
Kevin Warner 14:41
Yeah, well, the tip of the spear you still have to have a team who executes activities. So as much as the campaign structure and strategy and sourcing the right data and personalizing messaging for an industry vertical segments and Persona segments. You still have to have a team who executes and we're big believers that a lot of times that team should be specialized as well. And that if I'm, if I'm calling, I should have a specialized calling team. If we're doing email, we should have a specialized email team, because we see that even those skill sets are very specialized skill sets that very few people have all three and can do all three really well at the same time. So that's one is make sure that the right person is doing that front end activity. But when it traces back to the revenue from the conversations you're having, you're really able to adjust if you built a programmatic outbound campaign, it's the conversations your front end selling team are having that can determine how you adjust and modify the campaigns. The messaging is what you thought the assumptions that you built all of your campaigns around, is that what's resonating with your end prospects? Are they telling you differently, the one unique thing with outbound, which is very different than the marketing side is that you are getting engagement in real time to tell you if what you are doing is correct. If you're on the phone, your your end prospects are going to be telling you what they feel are important to them. The types of problems that they're currently having that you might need to focus on and solve, whether they have a problem at all, you might find from campaigns that who you're targeting, they don't have any need for what you built. And then maybe you need to adjust your Vertical Targeting. And so you're getting that feedback in real time. So now becomes a process of how quickly are you getting that input and adjusting the campaigns that you have launched? And if you have a front end sales development team, have you empowered them enough to be strategists and bring back that insights? Or are you a company that's just saying more activity? Don't care about that, you know, we'll do that like somebody else handles that you just call more or email more, because that front end team should be more strategists at that point, then just activity drivers?
Jonathan Fischer 17:08
Well, it sounds like we need a much more collaborative approach across the board to make outbound effective. Where does tech stack fall in to this mix? Is that pretty important as well?
Kevin Warner 17:20
Yeah, tech stacks gonna drive pretty much the game you have to be, you know, what I say is one of the big three outreach SalesLoft. Apollo, obviously, on the sales engagement side, there's so many competitors that you can get in so affordably, the big three imperatively have, you know, the data set up properly, you have different integrations you can plug into, you can just do more at marginable. More cost? Obviously, data super important. Where are you sourcing your data? Depending on your market segment, what data sources do you have to go to? But outside of that there's so many, you know, coarser, airy texts that almost Empower outbound today, if you think about Glock apps measuring deliverability if you think about email, warm up to email with a warm up domain so that you can make sure that you're getting into the inbox. And when you're not getting into the inbox, how quickly are you adjusting that from reports back from Glock apps? Do you have somebody monitoring that in real time, phone numbers, phone numbers go to spam much quicker than you think? Because every technology company as fast as sales SEC is getting created? You also have tech companies like Google where an Android phone can now identify spam, Apple releases that as well. So are you testing your STRS phone numbers every morning? Otherwise, you're having them do activity with phone numbers that aren't even going to get through? So how do you average 10 to 20%? Connect rates on phone? You're testing those things? Do you have a system for activating new phone numbers? Are you staying compliant? At the same time? There's so many texts? And then obviously with chat GPT and AI? How are you using the lavenders? Or Jasper's or Reggie's or if you saw Google's announcement, you know, when we're recording this yesterday from when we're recording this, but they're now releasing AI across their entire suite, including Gmail, where that'll help you write better emails. So how are you using that as well? HumanIK I mentioned which is how are you adjusting things for personality? It's overload when it comes to sales tech, which is why I say outbound, the way you're going to be successful is understanding how you use that tech stack, how you use it efficiently, and how it drives the customization for each individual prospect and gives you the best chance to get in front of that prospect.
Jonathan Fischer 19:42
Well, and the way you're interacting with them is the key way to to stand out when it comes to the point of the spear. How do you go about scripting that out when you're building a campaign?
Kevin Warner 19:50
Yeah, that's so there's two parts when you're scripting out one is segment as much as possible where it becomes irrelevant. The messaging becomes irrelevant. That's all you need. to do with the messaging side, believe it or not, I don't need to write to your college or this or that I know that you went to this college or this or that. It is instinctively in b2b sales. If you're in a role where your job is to do certain things and make the company better, and you have a problem that we solve, I don't need to convince you to take a meeting with me, if it's at the right time, it's a problem we solve. This is fantastic. It helps me do my job for our business, I will instinctively reply and say, Yes, I'm interested. So you have that built in, I'm not trying to get you to buy a new pair of shoes that you don't really need, but they look cool. So I want you to buy him, No, this helps you do your job, you have this problem, this is perfect timing. So you have that all you need to do is write to that assumption. Now you have to have segmented your market enough to where you can write to that segment, or right to those assumptions and be able to measure them. And then the second part of that crafting of the message is just sound human. Don't try to sell right. Again, it's selling itself, I'm we solve this, you have that problem, I don't need to overly push you on the features and the benefits of it. It's either you're going to have that problem or not. Right. And remember, that's that add Channelside is the 7030 or the 8020 rule. It's, hey, I understand that this might not be a problem that you have, I don't need to try to be fancy with it. What I do need to try to do is make it seem like I wrote it to you, like I'm a person and not a machine because we're still driven on that fact of human to human interaction. So if I sound like I wrote it to you, and I'm a human, and it's a problem that you have fantastic, why not jump on a call?
Jonathan Fischer 21:48
Well, do you? Do you feel like the script needs to be used and training coach a little differently than just memorize it and spit out the same way every time like what to talk to us about like on the on the tactical side of that, do we differently
Kevin Warner 22:03
on the tactical side, which is more relevant on the phone side, right when an email is one thing, but when you bring up phone, now you're dealing with I'm live on a call. And so what's going to happen? One where we train is in structure of calls doesn't really matter. Because if you think about us, as an agency, I have a team of callers, I can plug and play products pretty effectively to get them to sell because cold calling the structure is the hardest part is when somebody has an objection that you don't know an answer to how do you quickly you know, sound the part and get them to where you want them to go. That is the training, what you're selling and how you do it. That's the easy side of it. Because again, it's either you have a problem or not, I'm calling for this relative reason. But it's how you handle the call how you get them to have interest in what you're calling about how you get them to even give you five seconds on a call. It's that how do you sound? Do you sound like you're reading a script? Or do you sound like you're a human? If you're calling a CFO at a fortune 500 You instinctively need to sound different than if you're calling a marketing manager at a 10 person tech company. So how do you adjust your inflections? How do you ask them questions? How do you humanize that aspect of it knowing that you're a distraction, and you're a disruption? That's the training that you do. And then when you plug in your scripts or your your actual sales value propositions, you have to remember, they either have this problem or they're not. So there's a moment more likely chance that they're gonna say no, which is fine. Because really what you're interested in show rates, you don't want to book an appointment just for an appointment. It's why I fundamentally believe you shouldn't be paid ote, you should get a base salary as a sales rep. And it's a flat salary, regardless of your performance. And the regardless of how much revenue is driven, because I shouldn't be there just set an appointment because that's what my compensation is, I should be there for the same goal every day, which is revenue down the line. But again, if it's not a good fit, then just say that, you know, be personable, and then the conversation, don't try to keep hard selling. And that's one of the biggest things we found and where the script goes off the rails is when sales leaders are pushing so hard for appointments, that you're down the down the road team, the STRS, who are actually doing the work, start to just not care if I need to do more activity, I just need to push this person to say yes. So I don't know if that exactly answered it. But that's kind of how we frame everything.
Jonathan Fischer 24:40
That makes a lot of sense. And so the script is is a guide through the structure of the conversation and that's like the kind of branches on a tree. Once you get to your value prop if they're a yes, then you can you kind of have your canned Schpeel as it were, hopefully it's not delivered that way. That's kind of what I'm getting. Right. That part can be a lot more word for word once you get there. The other piece you mentioned that's really key I think is the You know, how you're incentivizing your people? I mean, if you're if your folks are incentivized to get volume of appointments booked, that's where they're going to push for, is that up hill road with some of the clients you've been working with?
Kevin Warner 25:11
Know how I see incentivizing your team is pay them well, A flat, you know, FTE salary. And that's how you should and you're here to do a job, your job is x. Obviously, if you don't deliver on that job, we need to look at the indicators or why and fix that. But if you tail back to marketing, which is very interesting, because marketing arguably has the hardest, just the same amount of task of driving pipeline and driving, you know, revenue, and marketing managers, campaign managers, they're not paid the same ote as maybe an SDR is, which is crazy to think about because their function is the same how I see the how do you incentivize your team one, pay them the compensation rate, they should be paid, pay them in a flat salary, that's, uh, you know, based on what they should be paid. And if they're happy, then they should want to come in every day and perform and continue to kind of scale up if you make a good, you know, system to go to the next step. And the next step and the next step. Most people I think there was a report, I forget exactly who did it. But most sales members would rather give up some of their compensation so that they can just have a higher flat salary, because a lot of companies are trying to minimize risk by offering a lower salary, but then have higher performance kickers based on appointment set, if you're an SDR or closed one revenue, if you're an AE, most would rather meet in the middle and know that they have a consistent paycheck that they can provide their family and understand that it's my job to deliver XYZ to the company. And if I don't, that's a conversation. But if I am, there's a lot of indicators in sales that kind of define my ability to perform meaning a company didn't release a feature that they promised that they thought they would release. So now we're trying to sell even though our competitors all have the feature that we're selling against, we don't have it, how am I going to make this sale against a competitor? If we're competing against it? a down market? How am I supposed to sell through a down market? Does my salary get you know, impacted even though I'm doing the just as much work and I'm working just as hard but budgets aren't opened up. So you look at all these correlating factors that a lot of times aren't the fault of an SDR. So we really see compensation as a flat structure that you're paid on, you know, delivering the job. Now to in order to make that happen, a company has to understand what ROI is on the individual. How are you measuring the work that a sales development team that a sales development rep is performing? And that's the hardest part and where I think the sales industry, most companies are so far behind because they don't know how to measure ROI on that individual. And oftentimes, that's why it gets pushed back. Well just make more phone calls. And if you I know this is long winded. But if you think about it this way, as an SDR to accompany your quotas. 15 appointments, if I set that means the company has essentially declared, hey, if you set 15 appointments with this ideal customer profile, that's our quota for you. So essentially, that should be ROI. My job is book 15. That's where the company has ROI. Anything under and I'm slightly underperforming, and I'm not compensated necessarily on anything over my jobs. 15 held meetings with this ICP. Imagine you set those 15 meetings on the 12th day of the month. Can you go to your boss and say, hey, I'll be back in two and a half weeks, I'm going to Hawaii. And he was saying What do you mean, you're going to Hawaii? Like you got to do some work? Well, no, I hit my 15 appointments. So you guys got the value out of me this like that? Was your ROI, your ROI positive? No, no, no, make more phone calls, make more emails? Well, I'm not compensated to do more. So the questions now becoming, hey, if you have ROI really dialed in your answer to that individual, by the way, should theoretically be Yeah. Okay. We'll see you in two and a half weeks, I hope that you can, you know, kick ass then too, or, Hey, how about we give you a little bit of a pay raise, and maybe you help train the team to do what you're doing. So now you're talking, you know, a very structured process with those team members. But again, no company understands ROI. When it comes to sales, you don't know You know, you're still valuing appointment set. Not all appointments are equal in value. Not all appointments have the same ACV value if they're coming from different verticals. So how do you say 15 appointments? Do you care about 15 appointments or do you care about, you know, revenue obtained from those appointments? There's so many questions around it that I just think companies shy away from because where do you even approach that conversation?
Jonathan Fischer 29:57
Well, the other side of it too, is the cost of replacing someone I mean, churn rates are extremely pricey. I've seen studies saying that the average lost hire is an $80,000 loss when you calculate all of the expenses related to replacing the individual kind of brings up another good question too, which is when when you're building a great outbound strategy, you know, third party, you can do this in house, maybe give us a little bit of your insights and thoughts on on that equation.
Kevin Warner 30:24
Yeah, I by ously, think third party is one of the best. I actually see that the modern, for anybody in the SMB space, it doesn't make sense to build it internally, the str function is incredibly difficult. A lot of times, you don't know your go to market fit yet, you need just as much of a consultant as you do an execution team. And for most SMB companies, the price of tech packages alone today to have a tech stack that can execute is so costly, because most tech stacks go upstream where they're requiring you to do annual contracts. And quite frankly, you don't even know how to launch a program with an annual contract. And so there's so much risk, that going out source reduces the risk of figuring it out. And an agency or a third party gives you the best chance to execute at a very normalized cost. So I know how much it costs. And now if I know how much it returns, it's an easy ROI conversation. And that's why I think third party is the best for most SMBs. Regardless of scenario, it's an easy way to determine ROI, it costs x for all of this. For me to build it internally, it would cost all of this. And if they just returned XYZ result, I easily know that I'm getting more than it costs from them, because they're providing me data. And data has this cost. They're providing me consulting consulting as this cost. So there's so much value built in even before a meeting is booked based on the opportunity cost of you doing it alone, most upmarket businesses, you're finding more and more and more demand to mitigate risk. So instead of, you know, just being able to do it without the financial burden, larger companies are going third party to mitigate risk. If I have a 10 person SDR team, they might be doing really well internally. But what happens if 30% of them are three people is not that many, but three people leave the company because they go get a new job next month. That's a 30% reduction in your pipeline, just that's three of your SDR teams. If your SDR team is really well, they're all basically hitting the same quota every month, you just lost 30% of your pipeline, and what you brought up earlier with HR costs, that's a fully ramped pipeline, to bring in a new sales development rep. To ramp them up, you're in for a four or five month scenario. So you got to play that game before you even get up to the ramp. And in that time, you might have lost another 30% of your team. So now a lot of larger companies are trying to mitigate risk by having a stable partner, third party that can scale up or down based on their demand with an easy conversation of ROI, just do what our internal teams doing. I don't need you to exceed performance, I need you to just perform what we've already determined as ROI positive. I just need you there to mitigate the risks that they leave because 131 thing a third party will do is always be there so long as you pay the bill.
Jonathan Fischer 33:37
Well, I can I can feel the listeners heads nodding in agreement that we need to mitigate risk. We're in a season right now, as we're recording today's show, where I know that that's that's that's that's a burgeoning concern, to mitigate that risk. And put another way, you're almost taking advantage of an economy of scale that you didn't have to invest it when you when you bring in a competent third party. But let me let me switch it up a little bit. Let me let me go another another corner of the table. What about that real bootstrap startup outfit? And maybe they're funded and they're growing, but they don't have budget to go third party, they've got their own team, can you close out our show with just give some recommendations on how they could begin to implement some of these great insights you've been sharing today?
Kevin Warner 34:17
Yeah, so one they can implement easily because there's different types of third parties. One is there's full service agencies like ours, which you just might not need, you might have built the system already. Internally, you might already have the tech stack. So there are third parties where you can go get the the staff, the STRS, who are trained and functioning staff members on an SDR side, but are specialized already for that. And at a lower cost than the risk of, you know, hiring, finding the right person seeing if they're qualified and getting them ramped up. It's a plug and play from that third party. So not all third parties are equal in that sense. And at that stage company, and we're good at saying, Hey, we're not a good fit. If you had a super early stage startup It should be founder lead sales. If you can't book top of funnel appointments as a founder, it's going to be very hard to do as an SDR. And so whether you're a technical founder or whatever you build, and you live a product, and I do it on my side, I live and breathe the company more so than any other team member. And if I can't book an appointment, if I can't close a deal, how would I train and bring in a team under me? So super early stage founder lead it? Once you have an established founder lead? Now you have the decision? Do we continue to invest internal? Or do I bring in an internal team so that I can focus, you know, money on development and not have to worry about a sales infrastructure that has a lot of risks that potentially not paying out in the next six to 12 months? But if you already went with, let's build that infrastructure internally, I would say go find the third party pieces where you can offset some FTE ease with contract labor, which by the way, most agencies are thriving and incredibly profitable tapping into how do you just tap into that network where you don't need a full service kind of consulting execution company?
Jonathan Fischer 36:09
Well, you've got a tremendous tool to help the hiring manager or the team builder that needs to make a decision to be go internally to be able to do a third party on this front as a friendly offer to the listener. What do you have for us on that front today, Kevin?
Kevin Warner 36:23
Yeah, we broke apart the in house versus outsourced SDR costs in house, there's so many sunk costs that a lot of companies don't even realize when they think about going and hiring somebody, just from one SCR that we actually built the report and built it out. How much are the extra licenses? What about the mark? The the hiring manager who does interviews? What about that one hour, the founder? does all of that cost adds up to bringing on one rep. What happens if that rep has to get fired in the first 90 days? And that's a sunk cost that gets put against the next rep. All of that versus what are the outsource options? And what are the costs associated with that? So on our website, which is leading m.com We actually outline in house versus outsourcing. What are my two options? And what are the costs if we're just looking at costs associated with both?
Jonathan Fischer 37:16
Well, we'll provide a link in the show notes. But by going to medium.com or IO, I'm sorry
Kevin Warner 37:22
that we graduated. So after nine years in the world, we went from.io Just you know, since we're recording just this past January, so we just are training in the midst of transitioning.io to.com. Like a grown up business finally.
Jonathan Fischer 37:40
well.io is pretty cool. But again, you know.com Yeah, that's true. Now you're really there. So that does make sense. Well, Kevin, you've done a fantastic job. You've you've met and exceeded expectations and offering great value to our audience today. Thanks so much for being on the evil sales leader. Thanks for having me. And thanks to all of you, our listener for making this show such a success. And as always from Overpass, thanks for being important part of our growth here on the program. Take care. We'll see you next time.