Why you need modern outbound sales for K12 B2B and how to approach it

While outbound sales has evolved over the years, it’s still incredibly important to build a successful edtech company. Four things to keep in mind when doing outbound sales.

In general, the higher the annual contract value (ACV), the larger the deal size, the better outbound works.

Over the years, I’ve spoken with many edtech founders about go-to-market and many of them have expressed a reluctance to do outbound selling. They cite long sales cycles, high costs, and low success rates among the reasons they don’t want to do it. After all, selling to schools and districts is challenging in the best of circumstances, so why put up with all the pains in building an outbound sales function? They argue for just focusing on driving more inbound. As a long-time edtech operator turned early-stage investor, I believe outbound is still an essential function for K12 edtech startups and that a modern approach to outbound selling can be a highly successful way to scale your sales.

First, what’s the difference between inbound and outbound?

Outbound sales refers to a selling dynamic where the seller actively initiates the sales conversation. Inbound sales, on the other hand, uses methods to get prospects to initiate a sales conversation. Outbound activities include cold calling, emailing, referral marketing, events, and more, while inbound activities include search engine optimization (SEO), content marketing, online ads, social media, and other lures that draw prospects to engage with the startup. Outbound works to establish contact with prospects who may or may not be interested in the solution the startup provides, while inbound serves prospects who are signaling that they may be looking for what you have to offer. In my experience, conversion rates on inbound are almost always higher than conversion rates for outbound because inbound prospects are more likely to be “in the market” for what your startup has to offer.

Why do outbound then?

We just established that conversion rates on inbound activities are better than outbound activities, so why not just do more inbound? The challenge is that startups can’t really control the amount of inbound they get, they can only influence it. It takes time to nurture leads into inbound opportunities.

In the early days of a startup, you should focus on what works and do more of it. If you have inbound leads, inundate them with sales and customer success love. If you have inbound leads, then focus on driving more inbound in the early days. If you don’t have leads, you may have to start with outbound anyways. That’s the reality for many K12 B2B founders, especially if they sell to C-Suite leaders in K12 school districts and/or have reached a certain level of scale and are trying to grow quickly. Even if you have some inbound, to grow your startup to the next level, you’ll need proactive, outbound growth because organic growth via inbound reaches a saturation point. For most startups, the majority of K12 buyers who have a problem aren’t actively looking for a product to solve that problem. That makes scaling inbound extremely challenging as your startup grows larger. Most startups in our portfolio generate less than 30% of their leads from inbound as they scale.

That being said, outbound is hard and it’s been getting harder in recent years. According to Jeremy Donovan of Insight Partners, in the early days of SaaS, the ratio of the number of outbound touches to units sold was somewhere between 200:1 and 400:1. This metric resonated with me because my last operating company measured this and our ratio was 300:1. To us, this meant that every 300 outbound call attempts on average yielded one new sale (These numbers are from the early 2010s; we sold the company to private equity in 2015.). Today, according to Donovan, a typical outbound sales organization makes 1,000 to 1,400 touches per sale. Sales has gotten “nosier” as there are more and more K12 startups selling products and school districts have cracked down on spam after being inundated with sales offers and phishing scams that lead to ransomware attacks.

Clearly, it’s become more challenging to do outbound selling. So how can entrepreneurs create leverage for outbound sales in a modern, efficient way? Here are four things you can do now to modernize your outbound and make it more efficient.

1. Get really clear on your Ideal Customer Profile (ICP) and relentlessly focus on those prospects.
   
   Start by segmenting your market and get specific about your perfect customer. Insights can come from what you understand about the characteristics of your most successful customers. What type of school or district are they? What’s the persona of the buyer/user at the perfect customer? Evaluate the different segments you serve and the attractiveness of each segment. Once you’ve identified the most attractive segment and your value hypothesis for that segment, focus there and your outbound response rates should improve.
2. Once you validate some initial product/market fit, create a strong playbook.
   
   You don’t need an outbound growth team until after you’ve found product/market fit. As a founder, you must do the first 10 or so sales yourself. Focus on product first, but once you find at least one segment that loves your product, you can start creating the playbook. For outbound team members likes SDRs and AEs, I love the idea of starting with persona training rather than product training. Make sure the team you’re building deeply understands the persona of the buyers you’re trying to reach. Connect your solution to the pain points of the buyer you’re serving. Key things for a playbook include ideal customer profile (ICP), key indicators for a successful customer, storylines from your most successful customers, and campaigns (content sequences for outbound).
3. Build a multichannel approach to warm up prospects.
   
   The goal of any efficient, modern outbound sales organization is to never do cold outbound unless it’s a last resort. Cold outbound is the lowest productivity activity. Warmed up outbound is much more effective. A strong multichannel approach includes email marketing, content marketing (e.g., case studies, white papers, interactive B2B marketing via surveys and quizzes and more), phone calls, social selling (e.g., LinkedIn), community management, referral marketing, and events (e.g., conferences, lunch and learns).
   
   Another key component is combining these channels to add value in each outbound touch via campaign sequences. It’s important to always have a reason to reach out — make a compelling offer or have a light call to action. Intent data, which provide insights into who is engaging with your outbound channel efforts, will help you prioritize your targeted outreach. Platforms like Hubspot, Marketo, and Pardot help you manage your multichannel approach and shine light on who is engaging with your channels. Product led growth (PLG) startups have access to intent data via sign ups and usage of free versions of their products. Product usage data are an excellent way to warm up prospects for outbound campaigns if you have it.
4. Be helpful, become a trusted advisor to customers, and make it personal.
   
   The goal for 2024 is to have people receive fewer emails and for each email to be more relevant, more engaging, and thus, more valuable. One way to do this is to develop valuable content that buyers want to consume. For example, one of our portfolio companies recently developed a useful buyer’s guide that helps their ideal personas evaluate the range of options they have, how to select a solution that’s best for them, and then how to access funding to pay for it. For your top-tier prospects, personalize emails that make them feel like the email was created just for them. We can all tell when an email has been crafted with a group of recipients in mind and when the sender has made it so personal that it can only be meant for the recipient. Sending fewer emails is being enforced by the email clients starting February 1, 2024 as Google and Yahoo! are imposing stringent requirements to curb unwanted mass emails, especially from sellers using sales engagement platforms.

At its core, sales is about solving people’s problems. Remember that most of your prospects are looking to solve a problem, not looking for a specific product. Prospects want to know that you’re highly credible, understand them and their domain deeply, and can help solve their problems. A modern outbound sales organization is built around targeted outreach to prospects that fit the ideal customer profile(s) you’ve identified and designed to provide trusted advisory support to those prospects. Ideally, these prospects find you before you find them, but that’s certainly not always possible. Building a thoughtful, modern outbound sales organization might be a “necessary evil” as one operator described it to me, but it’s still the best way to scale your sales organization, especially if you sell large ACVs to C-Suite decision-makers within K12 schools and districts.

P.S. In a follow up post, I’ll share some of the learnings from conversations with a half dozen top K12 revenue leaders I spoke with about modern outbound selling. Stay tuned.