Outbound Lead Generation Team Sizing: Market Coverage
This is the second post in a two part series on outbound lead generation team sizing. In the first post I explained that there are two approaches that should be used to determine the appropriate size of your outbound lead generation team. The first approach is to size your team based on the capacity required to hit your pipeline and bookings goals using your sales activity funnel.
The second approach will tell you how big of a team you’ll need to effectively cover your market. This approach is especially useful for understanding how you might scale your team as revenues increase, and/or as you raise additional capital to fund growth.
Market Coverage-Based Approach
Before you launch an outbound lead generation team, you should identify your target market segment and have an understanding of the target buyer profiles within that target market segment. If you haven’t done this already, the OpenView Labs customer segmentation eBook is a great resource to help you get started. If you have already done the research and have selected a target market segment you should be able to estimate the number of target buyers in your target market segment.
You should also be able to estimate the number of conversations you expect to have with each target buyer based on your touch point model and/or outreach process. For example, if your outreach process calls for one conversation per quarter per target buyer then you’ll need four conversations per year per target buyer.
As noted by Trish Bertuzzi in the comments of my previous post, a number of variables may impact your touch point model, such as how saturated a particular market is with your competitor’s products, and how much of presence you already have in a particular market.
You can easily determine the total number of touches/conversations that will be required to effectively cover the total market segment by multiplying those three numbers. The table below demonstrates the calculations. Please feel free to leave a note in the comments if you’d like an Excel version of this template.
With the estimate for total number of conversations, you can then plug that number into your sales activity funnel to get to the number of calls divided by outbound lead gen rep capacity (Daily call target/ lead gen rep). That equation will give you the number of reps you’ll need to cover the market.
For example: If there are 1,250 companies in your target market segment, three target buyer profiles at each company, and your outbound process calls for a conversation with each target buyer once per quarter, that means your team will need to have 15,000 conversations per year to cover the entire segment.
If your call to conversation conversion rate is 12% and your reps can make 50 calls per day, then one rep will be able to have roughly 1,440 conversations per year. This means that to cover the entire market you’ll need about 10 lead generation reps, and each of which will effectively be able to manage about 120 accounts at any given time.
What’s important to keep in mind is that the market coverage-based approach and the pipeline-based approach may return different results for the team size. However, the two can be used to inform your decision, and set expectations for what a team of each size should be able to achieve in terms of market coverage and pipeline creation.