Most of us might know the feeling of trying to keep our head over water in an endless sea of numbers and data without really knowing which way to navigate. We are experts in collecting data, but we tend to drown when using them. But you can learn how to swim by having the right approach to your data.
Do you work with outbound telemarketing activities and want to learn more about activating your figures for hit rates, contact rates, conversation time, numbers of calls, etc.? Then keep reading!
At Adversus, we've been crafting telemarketing software solutions since 2015, giving us a unique opportunity to dive into our customers' everyday challenges and work with their KPIs. So, if there's one thing we know, it's how to use data effectively in the telemarketing business.
Our software has allowed us to gather enormous amounts of data, giving us a deep understanding of how telemarketing works and how different factors impact sales outcomes. We're not just experts in telemarketing software – we're also data wizards in the world of telesales!
We've observed some telemarketing businesses striving for the highest hit rate possible, but often at the expense of neglecting the importance of making meaningful sales. Likewise, we've noticed companies trying to cut seconds here and there using predictive dialers, unaware that this approach can lead to a higher drop rate and missed sales opportunities.
Now, let's be clear – there's no one-size-fits-all solution for optimizing sales or bookings through telemarketing activities. It's a complex process influenced by numerous factors, and relying solely on KPIs won't guarantee success.
To succeed, you need two crucial elements: a great product or service and skilled sales personnel who effectively communicate its value. While KPIs play a role, delving into the numbers and understanding their significance will provide you with valuable insights to optimize your sales approach.
So. Let's get started.
KPIs – let's have a lot of them! Not.
Before working for Adversus, I worked in a medium-sized, well-established, and successful company. Let's call it X. At some point, X got a new CTO, who was excited about the data-driven approach to running the business. He hired a data analyst who knew how to pull some heavy reports and set up a huge load of KPIs based on benchmarks. Once a week, we gathered the whole team to look at the last week’s performance to see if we had reached our goals.
Everything was running smoothly. Except, none of us knew exactly why the numbers turned out as they did because none of us really understood the mechanism that drove the result. And as time passed and no improvement happened, the KPIs became a joke at the office.
"My KPI is to drink 5 cups of coffee today. I'm already 20 percent over my goal," was a typical sentence at the coffee machine.
Fortunately, the CTO realized at one point that having a lot of data is worthless unless you utilize their powers. You are at square one if you do not understand your data – and activate them correctly. Or worse. You drown.
Get to Know Your Data
First things first, get to know your data before diving in. Understanding your data helps you prioritize your actions wisely. Don't forget to spot the important insights amidst all the numbers – they'll become the basis of your KPIs.
Less is more regarding KPIs; focus on the key drivers rather than drowning in a sea of data you don't really grasp.It is better to narrow down the numbers of KPIs and get to know what drives them than just having a whole list of data you don't understand.
Well. Enough chit-chat for now. Let's dive into some of the most common KPIs at call centers.
Hit rate – definition
If you ask Wikipedia, a hit rate is:
"a metric or measure of business performance traditionally associated with sales. It is defined as the number of sales of a product divided by the number of (…) planned calls (…)."
The hit rate is like gold when you're in the business of selling stuff. The higher, the better, right? But hold up, don't just look at it in isolation. What's great for one type of customer may not work as well for others.
Let me give you an example. If you're selling men's underwear, you'll notice that guys are more likely to jump on your "men's underwear on subscription" offer than the ladies. Of course, that doesn't mean you should ditch the gals altogether. Just know that your hit rate might drop slightly when reaching out to female leads.
And trust me, if you try to sell dog food to people allergic to dogs, you'll see your hit rate crash and burn (but that's a whole different story).
Oh, and here's a fun fact – your hit rate can be a bit of a chameleon, changing throughout the day, week, month, or even the year! If you're selling newspaper subscriptions, you'll likely score more hits when folks return from work in the evening. And if it's garden furniture you're peddling, summertime will be your prime time.
Bottom line: Keep it real when setting your hit rate expectations. Consider the bigger picture, like age, gender, social status, education, geography, and the specific product you're selling. It's not a one-size-fits-all deal!
Now, you might wonder, what's the difference between a hit rate and a contact rate? Let me break it down for you.
What is the difference between using hit rate and contact rate as a KPI?
The hit rate gives you an impression of your "final result" – e.g., how much you sell or how many appointments you have been able to put into the calendars.
The contact rate only gives you an impression of how many leads you have reached from the entire pool of leads called. Therefore, you cannot use the contact rate to measure your goals.
If you, for example, measure your contact rate up against your hit rate, you will get a pretty good indication of either:
The quality of your leads (are you contacting the right people? Have you segmented them correctly?)
Your phoners' ability to sell your product (are your phoners skilled enough?)
Are you contacting them at the right time of the day? (e.g., look at the ratio between contact rate and hit rate during the day)
The conclusion is; the ratio between contact rate and hit rate can be advantageous to identify problems in your sales funnel, thereby being a key measure for improving your hit rate.
Is there a difference between the acceptable hit rate doing B2B versus B2C?
Regarding the acceptable hit rate, you might wonder if there's a distinction between B2B and B2C settings. Truth be told, there's no hard and fast rule here. It all boils down to the nature of your product or service and, of course, the quality of your leads.
Let's break it down a bit. B2B and B2C audiences have their quirks and preferences, right? But when it comes to hit rates, what really matters is how your potential customers respond to your pitch.
So, the secret sauce lies in understanding your target audience, whether they're businesses or individual consumers.
In a nutshell, the hit rate is like a chameleon, adapting to the specific context of your product or service and the characteristics of your leads. It's all about figuring out what works best for you and fine-tuning your approach accordingly.
What courses a hit rate to drop?
Well, there could be a bunch of reasons for that!
Most common explanations for a dropping hit rate:
You have hired new phoners that are inexperienced and need more training.
The demand for your product is dropping.
There are new competitive products in the market.
The quality of your leads is not what it used to be.
You have changed settings in your dialer system that may affect the hit rate.
What should you do when your hit rate is dropping?
Okay, so let's talk damage control when your hit rate starts dropping.
First things first – get to the root of the problem. Don't change your whole sales strategy without knowing what's really going on. Maybe the issue lies with some newbies in your sales team who need a bit more training and experience to hit those sales goals. It happens, and it's totally cool.
Next up, check out your sales team. Who's killing it and who's, well, not quite there yet? Pinpoint the ones who need a boost and give them a helping hand. A little support and training can go a long way.
If the problem is bigger than your sales squad, like dropping demand or fierce new competitors, it's time to roll up your sleeves and tweak your sales strategy.
Furthermore, assess the quality of your leads. If they fail to meet expectations, consider exploring new lead providers or implementing a thorough lead cleanup process. Removing unresponsive leads from your list can enhance productivity and focus on promising prospects.
While at it, consider breaking down your sales process into bite-sized steps to make it smoother.
Cleaning up your leads – and divide your sales process into steps
While not a magical step-by-step guide on cleaning up your lead pool, it's definitely a good starting point.
Identify those leads who will never pick up the phone. Run your leads up against blacklists, make a proper duplicate check, and remove all unqualified phone numbers for a start. This basic cleaning will improve your ratio between contact rate and hit rate.
Identify your leads and segment them into groups – e.g., segmented by businesses, geography, size, etc. You can use different integrational tools if you want to automate that part of the process. It can be a good idea to build separate campaigns for each group and match them with the right phoners.
Consider dividing your sales process into more steps so that some phoners will do the cold calling while others close the sales.
Evaluate your effort by diving into your data and adjusting your process to optimize it further.
There are plenty of other essential measures you can dive into and compare with your hit rate, such as contact time, the number of contact attempts, the time of day/week/month, the number of answering machines you reach, and much more.
Knowing which time of the day, week, or month you have the highest hit rate, you can use that information to plan your workflows better.
Perhaps your B2B leads are easier to turn into customers at a specific time of the month or year – e.g., when the liquidity is high? Or your B2C customers may be easier to get in touch with outside working hours? You'll find an answer to questions like that if you dig into your data.
The ratio between contact time and conversation outcome
A nifty trick for your sales strategy is to monitor the ratio between contact time and conversation outcome. It's a small but powerful measure that can do wonders. For example, if you notice that your chances of closing a sale double when you extend the conversation by just one more minute per call, why not let your phoners stay on the line a bit longer? Trust me, it's totally worth it in the long run!
Tendencies in contact rate
It's a common phenomenon – your contact rate tends to soar when you acquire fresh leads. However, over time, as you engage with more and more leads, the contact rate begins to decline. The increase in "bad leads" within your pool contributes to this trend.
When establishing your KPIs, it's crucial to take this into account. Be attentive to the fluctuations in the contact rate over time and consider the impact of "bad leads" on your overall performance. Stay vigilant and maintain your strategic focus to navigate these dynamics effectively.
Average handling time
Knowing the handling time of your phoners is absolutely crucial. You gotta figure out how much time each phoner needs to seal the deal successfully. In other words, does your data suggest any patterns where using a certain amount of time on each lead leads to more wins?
Don't fall into the trap of thinking that long conversations are always the magic ticket to success. Sometimes short conversations can do the trick just as well.
Let your phoners invest some time in proper research before making calls. Then, compare the results. You might find that research time can pay off in the long run, especially if your sales process has multiple steps.
Check out the difference between cold and warm calling. You'll notice that the average handling time for cold leads is usually way shorter than for warm leads.
So, bottom line – knowing your handling time game is key.
When selecting your KPIs, make sure to consider all relevant measures. Utilize your data to identify the key indicators that truly matter and narrow them down to a simple set of KPIs that offer a clear view of your progress and are easy to communicate.
Avoid the common mistake of using KPIs solely for communication purposes. It happens way too often when decisions are made without a proper understanding of the available data.
Know what your KPIs are based upon, respond when your data starts to shift, have a solid action plan in place and, most importantly, stick to your plan!