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The Cost of a Qualified Sales Appointment

Modern B2B sales requires reaching sophisticated customers who’d rather do research online than speaking with a Salesperson over the phone. Armed with vast amounts of information, modern buyers demand more and more from sellers.

That’s why the process from lead to customer can be long and expensive.

It would be great if you could talk to the right prospects all the time, just by picking up the phone — but the truth is that getting to talk with the right people is a long journey that doesn’t start with sales; it will either start with marketing or sourcing a list of targeted leads.

Part 1 - The Lead Generation

The journey begins with the lead generation process, where companies attract potential customers through content marketing, social, emails, events and other marketing efforts to obtain their contact information and add them to their CRM. Once leads are in the database, the marketing team begins to nurture them, feeding them relevant information to take them further in the buyer’s journey.

The crucial step in the marketing journey is to determine if each prospect is actually a Qualified Prospect (a lead more likely to become a customer than any other lead), based on their demographics and behavior.

Although by now some considerable time has passed and you’ve spent money and resources in marketing and advertising to obtain these Qualified Prospects, you (or your team) haven’t spoken to them yet.

Companies such as Zoominfo, Lusha and RocketReach provide lists of targeted B2B contacts from large databases for a fee or a subscription. Other tools such as LinkedIn Sales Navigator are great for finding prospects and contacting them directly on LinkedIn or you can pull a list from Sales Navigator and then use to find their contact details.

For instance, when you outsource sales, you can hire a remote sales team to make qualified sales appointments from a list of leads from one of the sources above, or outsourced companies will generate the leads for you. The outsourced Salespersons would use an omnichannel cadence to touch the leads multiple times in order to engage them in an effective sales conversation. That way you could start developing a sales pipeline even if you don’t have a full in-house marketing and sales team.

Part 2 - The Qualifying Journey

In this stage of the pipeline, the sales team has determined that the lead is a prospect. The prospect is an individual or organization that is a possible customer to buy your product and has gone through a qualification process. They have manifested some strong indicators that they are interested to buy your product or service at some time. Unfortunately, not many leads make it this far. According to MarketingSherpa, only 27% of B2B leads are sales-ready.

With a list of prospects in your CRM, your business will be ready to start making sales appointments.

What's involved in this process? For starters, it involves many calls and messages over a period of time—some buyers are more responsive than others, depending on the industry.

However, not all appointments are made equal. There is a huge difference between a prospect appointment and any other appointment. If the prospect is not really ready to buy, you will waste your talking to someone who’s just researching or doesn’t have the budget to buy your solution.

A good Sales Qualified Appointment has been human verified. In other words, someone has called the lead and determined if your product or service fits the buyer’s needs, what the timeline for buying is and their budget. If the solution is a fit, the purchase timeline is close and a decision maker has vetted the budget, then that lead is ready for you

How valuable then are Sales Qualified Appointments to your business? Probably a lot. If you could ensure that your sales team only gets qualified sales appointments, you could probably build a great pipeline and increase your revenue.

As you know from experience, this is easier said than done. Setting up a marketing and sales funnel that works consistently can cost you a lot of money.

Calculating the Cost of a Qualified Sales Appointment

To calculate the real cost of a qualified sales appointment, we need to take into account all the costs incurred by having a Salesperson in your team.

What is the role of a Salesperson? A Salesperson identifies and qualifies prospects. Salesperson are responsible for sourcing up to 45% of a company’s revenues.

That includes a few pre-sales activities:

- Making cold calls

- Sending outbound emails to prospects

- Setting up appointments or introductory meetings

- Qualifying webs visitors through chat conversations

Setting up an in-house sales department costs a lot of time and money. Here’s a breakdown of the costs involved.

1. Recruitment

According to the Bridge Group, you can spend a total of 1,170 hours hiring reps over a period of several months. The average cost to hire a single Salesperson is $4,129.

What’s worse, the average tenure of a Salesperson is 15 months, and according to a report by DePaul University replacing a rep costs organizations $97,690 on average.

2. Training

Once you hire a rep, you’ll spend three months training him or her - the average ramp up time is 3.2 months or about 108 days. That means you’d have to pay a salary for those days that the Salesperson is not productive yet.

3. Salary and benefits

Here are the numbers:

- Average Salesperson salary in the U.S.: $48,412/year + $7,261/year in benefits = $55,673

4. Office space

On top of salaries and benefits you’d have to pay for office space. Then add desks, chairs, computers, phones, internet connection, utilities, maintenance, cleaning and more (around $12,000 per employee).

5. Technology stack

Add the cost of technology, such as specialized software, licensing fees per user and IT staff. The average cost for these per Salesperson is $3,287 per year.

The actual costs will vary depending on your industry, location and other factors, but for the sake of this example, let’s calculate the total cost from the numbers above for one Salesperson.

- Recruitment: $4,129

- Salary and benefits: $55,673

- 25% of support staff: $63,763

- Office space and equipment: $12,000

- Tech stack: $3,287

- Total: $138,852

So what is the cost of a qualified appointment?

The Bridge Group report estimates the average Salesperson has a target of 10 qualified appointments per month and quota attainment is 68%. We can therefore say that a typical Salesperson makes 7 (10 x 68% = 6.8) qualified appointments per month, or 84 per year. If it’s a new Salesperson, we’d have to subtract training time, so that would give us 48 appointments.

Now, let’s divide the annual cost of an Salesperson by the number of sales qualified appointments he or she makes in a year.

- $138,852 / 84 = $1,653

- New hire: $138,852 / 48 = $2,892

This is by no means applicable to all cases and industries, but a ballpark estimate based on available data. Some companies have sales teams that make a lot more qualified appointments per month as their product is cheaper for example so their cost per qualified sales appointment would be less. You can adjust the figures above to your own team’s performance and costs.

Is there a better way?

More and more companies are deciding to outsource sales for different reasons, but especially to save time and money. Outsourcing your sales team can significantly reduce the cost of a qualified sales appointment.

For instance, while an in-house Salesperson would cost $138,852/year, StarkHR will cost you much less per year (including support staff and all the other factors considered above), with our Qualified Prospects average cost ranging from $12-$20/contact during your first year and $60-$104 after that. It’s also not just about cost, but also quality.

This is what we do:

- Make cold calls

- Send outbound emails to prospects

- Qualify prospects through chat conversations

- Send you qualified prospects that need your product or service. They have the budget to buy it and the right to expend the budget and get the purchase and they are open to hear what you have to offer.

Curious to see how this works? Visit our website and learn more about our services:

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