Don’t Scale Prospecting Until You Clean Your Total Addressable Market (TAM) In Your CRM
Before scaling your prospecting efforts, there’s a critical step you shouldn’t overlook. Ensuring your team operates at peak efficiency can make all the difference.
Here is what we’ll cover this week:
- Don’t Scale Prospecting Until You Clean Your Total Addressable Market
- The Hedonic Treadmill of Operating Expenses
- Rethink Your Sales Equation by Lowering CAC and Boosting LTV
Don’t Scale Prospecting Until You Clean Your Total Addressable Market
Let’s talk about something critical before you think about scaling your prospecting efforts: cleaning up your Total Addressable Market (TAM) database.
This insight comes from a fantastic podcast episode on Nathan Latka‘s podcast, Get Latka, where he interviews SaaS founders and shares best practices.
One guest, Kyle Norton, CRO of Owner.com, nailed it with his advice: “Don’t let your BDRs do lead research.” This is crucial. If your Business Development Representatives (BDRs) are pausing their day to figure out which accounts to target, gathering firmographic data, and enriching contact information, they’re switching between very different tasks. This kind of context switching—from gathering data to engaging with prospects—makes them wildly inefficient.
Kyle further emphasized that you need a fully formed TAM database in your CRM before you hire any sales professionals or let them loose on prospecting efforts.
Your BDRs should know exactly who they’re contacting, why they’re contacting them, and have the best messaging practices developed for them. This way, they can focus on execution, staying on the right side of their brain all day, rather than flipping back and forth.
Remember, efficiency is key.
Six well-organized sellers will outperform ten to twelve disorganized ones any day.
So, before scaling, ensure your BDRs are set up for success with a clean and ready-to-go TAM database. It’s all about maximizing efficiency and getting the best yields per seller.
The Hedonic Treadmill of Operating Expenses
The concept of the Hedonic Treadmill, which I recently explored in Andrew Wilkinson’s book “Never Enough,” explains how material things don’t ultimately change our level of happiness. We adapt to new pleasures quickly, and they become our new baseline.
The same pattern exists in businesses, particularly in departments like marketing and engineering.
Initially, budgets are bootstrapped, but as the company finds success, spending increases on paid media, live events, and branding agencies. These operational expenses become the new normal, and without diligent review, they keep rising year after year.
This escalating budget puts pressure on sales to perform, and ironically, as a founder, you may find yourself less happy despite the success.
You’re constantly feeding a growing beast that demands more resources, more clients, and higher prices.
One solution to this is zero-based budgeting. I learned about it in 2018, and it has been a game-changer since then.
Every quarter, I review and cut unnecessary expenses, from extra tool licenses to underutilized team members and recurring costs that started as one-time expenses. This practice helps relieve stress on the sales team and improves overall organizational happiness.
By being mindful of creeping costs and regularly resetting your budget, you can step off the hedonic treadmill and stop this cycle from dragging down your happiness.
Visit Get Levrg to Instantly Cut Your Operating Costs
Rethink Your Sales Equation by Lowering CAC and Boosting LTV
Winning by Design recently published an insightful article on a fantastic concept in sales: the go-to-market model by average contract value. This article aims to help founders and sales leaders determine the best sales motion based on the size of their deals.
Traditionally, if you sell a low-cost product, like a $9-a-month software, you’d need a self-serve or product-led growth model.
As your contract values increase, you can afford a more robust sales force. This makes sense but is based on legacy models like Aaron Ross’s Predictable Revenue.
Here’s the twist: globalization is changing the game. Companies are offshoring revenue operations, SDR functions, and more, leading to greater efficiencies. This means your account executives can focus on high-value tasks, while support functions are handled offshore.
This shift allows companies to offer personalized, high-touch service even for smaller deals. The cost of customer acquisition drops significantly, and the payback period shortens. Essentially, you need fewer account executives because they can handle more tasks, thanks to offshore services.
So, even if you’re selling smaller ticket items, you can still provide top-notch service without inflating costs. If you’re not exploring these global opportunities, you’re falling behind. Your competitors are likely already leveraging this model, giving them a significant edge.
Rethink your go-to-market strategy in today’s globalized world. It’s time to maximize efficiency and stay competitive.
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