Scaling Outbound Ep 250

Summary Notes


In a detailed discussion about scaling outbound marketing, the host sheds light on misconceptions about the scalability of organic outreach compared to paid advertising. He argues that outbound methods, such as cold calls and emails, can be more reliable and cost-effective when expanded strategically. By sharing his own business's metrics, he demonstrates how hiring more people to perform these tasks can substantially increase sales at a lower acquisition cost. He emphasizes the importance of understanding the numbers, selecting the right channels, and ensuring that the profit margin justifies the expansion. The host concludes by highlighting the stability and consistency of outbound marketing as a growth strategy, contrasting it with the potential volatility of paid advertising campaigns.

Summary Notes

Introduction to Scaling Outbound Strategies

  • Speaker A introduces the topic of scaling outbound marketing strategies.
  • Speaker B sets the stage by discussing the broader context of customer acquisition and retention.
  • Speaker A challenges the common belief that outbound marketing is not scalable compared to paid advertising.
  • The discussion is prompted by a question from an audience member at a mastermind event.

"What's going everyone in this video, what I want to do is talk to you about how you can scale outbound." "Welcome to the game where we talk about how to get more customers, how to make more per customer and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe."

The quotes establish the focus of the video on outbound marketing strategies and the overarching theme of customer acquisition and retention.

Misconceptions About Outbound Marketing

  • Speaker A addresses the misconception that outbound marketing is not a scalable system.
  • The speaker shares a past belief that paid advertising was superior to organic outreach.
  • A real-life example from a mastermind event highlights the misconception.

"One of the issues that I see that's being really prevalent in kind of like the marketing communities is talking about how organic or outreach is not a scalable acquisition system and you should only use pay, paid."

Speaker A's quote emphasizes the prevalent misunderstanding within marketing communities regarding the scalability of outbound marketing.

Scalability of Outbound Marketing

  • Speaker A explains the scalability of outbound marketing through delegation and expansion.
  • The speaker suggests that outbound marketing can be more scalable and reliable than paid advertising.
  • The conversation with the audience member at the mastermind event serves as a catalyst for this discussion.

"And I also now am over time, continuing to believe that Appa might actually be more scalable, more consistent, more reliable than even paid."

The quote reflects Speaker A's evolving belief in the potential scalability and reliability of outbound marketing over paid advertising.

Outbound Marketing Platforms and Channels

  • Speaker A lists various platforms for conducting outbound marketing.
  • The speaker emphasizes the variety of channels available, such as phone, email, and chat.
  • Outbound marketing is presented as versatile across different platforms.

"You can also do outbound on different platforms as well. You could do cold calls, you can do cold emails, you can do direct messages on Instagram or Facebook or whatever, right?"

This quote illustrates the range of platforms that can be utilized for outbound marketing, highlighting its adaptability.

Calculating ROI in Outbound Marketing

  • Speaker A discusses the quantifiability of outbound marketing's return on investment (ROI).
  • The speaker intends to demonstrate the math and metrics behind scaling outbound marketing.
  • Real-life numbers from Speaker A's business are used to illustrate the process.

"So what I want to do is walk you through kind of how the scaling works and then how you can calculate ROI the same way as metrics driven as you can for paid."

The quote indicates Speaker A's objective to explain the scalability of outbound marketing and how ROI can be calculated with precision.

Real-life Example of Outbound Marketing

  • Speaker A provides a real-life example of their business's outbound marketing strategy.
  • The strategy involves making a specific number of cold calls per day and tracking the results.
  • The speaker outlines the weekly effort and expected outcomes from this approach.

"Right now, we're doing, because this is something that we started implementing just recently because I wanted to scale our acquisition systems. And so we are using phone primarily and we do 100 cold calls per day."

Speaker A's quote gives a concrete example of how their business is actively scaling its outbound marketing efforts through cold calling.

Sales Process and Metrics

  • Outbound sales process yields one closed sale per week from follow-ups.
  • Metrics show that out of 10 initial contacts, 7 show up for a follow-up appointment.
  • The cost of this outbound process is $1,600 per month for a part-time employee.

"From those ten, we'll get seven to show up for that next appointment. And then from there, from the follow up, we usually close one sale."

This quote outlines the conversion rate from initial contacts to follow-up appointments and ultimately to a closed sale, which is a key performance indicator in the sales process.

Cost Analysis and Comparison

  • The outbound sales process costs $400 per acquisition.
  • Compared to paid advertising costs of $2,000 to $2,500 per sale, outbound is significantly cheaper.
  • The speaker is considering how to scale this process effectively.

"Is $400. Now, to put this in perspective, I usually pay $2000 to $2,500 per sale using paid advertising."

This quote compares the cost-effectiveness of outbound sales to paid advertising, highlighting the potential savings and prompting consideration of scaling the outbound process.

Scaling the Outbound Sales Process

  • Scaling involves increasing the number of part-time employees from 1 to 20.
  • This could potentially lead to 80 sales a month at a cost of $32,000.
  • The speaker is evaluating the impact of scaling on business operations and costs.

"Well, right now we're getting one person to do this, but what's to stop me from having 20 people doing this, right?"

The quote discusses the possibility of scaling the outbound sales team to increase sales volume and improve business outcomes.

Marketing Costs and Team Contributions

  • The speaker's current marketing costs include a team of creatives, graphic designers, videographers, copywriters, and more.
  • These costs are in addition to ad spend.
  • The speaker is contemplating how to acquire more names for the outbound sales process.

"Not to mention that this process also includes, like, if you take my marketing costs not just from my advertising, but the actual team, I've got creatives. I've got graphic designers. I've got videographers. I've got copywriters. I've got funnel people. I've got traffic."

This quote provides insight into the comprehensive costs associated with the speaker's current marketing efforts, which go beyond just ad spend.

Operations and Lead Generation

  • Operations involve training new employees on the sales script and conversation techniques.
  • The challenge lies in sourcing lists of names for outbound sales efforts.
  • The speaker is seeking solutions for the operational aspect of scaling and lead generation.

"But the next one's like, well, how do I get these names? How do I get these lists of names?"

This quote identifies the need for a strategy to obtain contact lists, which is a critical component for expanding the outbound sales process.

Importance of Channel Selection in Scaling

  • The medium through which outreach is conducted is significant for scaling sales.
  • Traditional methods like phone calls remain effective for scaling, utilizing tools and scraped lists.
  • Cold emailing can yield a response rate of approximately 1-2% from a large volume of emails.

"The channel that you're using matters, right? And so if I were scaling phones, which is probably one of the most time tested ways of scaling, then it means you can scrape lists off of the Internet, et cetera, whatever, and then just feed them into a dialer."

This quote emphasizes the relevance of choosing the right channel for scaling sales, with phone calls being a classic and reliable method that involves scraping contact lists and using dialers.

"If I was doing cold email, there's a zillion different tools for cold email that you feed in 500 plus emails a day. And from 500 emails, you might get five to ten responses that are meaningful."

The speaker highlights the process and expected response rates for cold emailing, suggesting that sending a large volume of emails is necessary to generate a handful of meaningful responses.

The Warmth of Outbound Leads

  • Outbound leads may be warmer than cold traffic due to the timing of their interest or need.
  • The concept of "buyers in power" indicates a more engaged prospect who responds to outbound efforts.
  • Understanding the metrics and numbers is crucial for successful cold outreach.

"And what's interesting about outbound that I have found is that, believe it or not, these people are actually warmer than cold traffic, which I find interesting."

The speaker finds it noteworthy that outbound leads, contrary to expectations, can be more receptive than cold traffic, implying that they may be experiencing a moment of need or interest.

"Whereas if you're responding to this, at this point, it's probably of more importance to you."

This quote explains why those who respond to outbound efforts are likely doing so out of a significant interest or need, making them potentially warmer leads.

Scaling Outbound Sales

  • Scaling outbound sales involves multiplying the number of contacts (lists) by the amount of outreach activity.
  • The speaker discusses the necessity of reaching a minimum number of contacts per day to achieve meaningful results.
  • Utilizing social media messengers as a channel involves contacting existing connections and engaging with qualified groups.

"And so scaling outbound really comes down to just multiplying two things. You have to get the lists, you have to get the names. Wherever the ponds are times activity, which is the effort, the 100 a day times people."

The speaker describes the fundamental formula for scaling outbound sales as a combination of acquiring contact lists and consistent outreach activity.

"Now, this is where it's interesting. It's like, well, where do you get messenger people? Well, one, you could hit up all the followers you have or all the friends you have."

This quote suggests strategies for sourcing contacts for messenger-based outreach, starting with one's existing network of followers and friends.

Assessing the Viability of Scaling

  • The decision to scale is based on the relationship between the cost of acquisition and the profit per customer.
  • The speaker gives an example of calculating the viability of scaling by comparing the cost of acquisition to the gross profit.
  • The process of scaling involves determining if the return on investment justifies the cost and effort.

"And so in this instance, if you were doing that, and let's say you were getting one sale a week from someone, and this is, again, like I said, part time, if my cost of acquisition, mind you, I said, was $400, as long as my profit on a customer that is coming in, and that's gross profit, that means, like, after my cost of fulfillment is over $1,200, that's three x, then it is worth it, and it is a scalable system."

The speaker provides a practical example of how to evaluate whether an outbound sales strategy is worth scaling, by ensuring that the gross profit from a customer exceeds the cost of acquisition by a significant margin.

"So hopefully that makes sense for you, hopefully broke at least a little bit."

The speaker concludes by expressing hope that the explanation was clear and helpful in understanding the process of scaling outbound sales efforts.

Scalability and Cost of Acquisition

  • Discusses the scalability of using virtual assistants (VAs) for generating appointments and sales.
  • Emphasizes the low cost of hiring a VA ($500/month) and the high potential return on investment (ROI).
  • Provides an example calculation of cost per acquisition and ROI based on hypothetical sales figures.
  • Suggests that any industry can benefit from this approach, particularly with high-ticket items.
  • Highlights the importance of understanding and executing outbound strategies effectively.

This is where having some people, there's a lot of vas who will do this for significantly less. So let's say you're paying a VA $500 a month, for example, and let's say from that va, you're able to generate, I don't know, ten appointments a week.

This quote introduces the concept of hiring affordable VAs to generate business appointments, which is a key aspect of the scalability theme.

That means that your cost of acquisition is tiny, is minuscule, right? It's $60 ish, right? So the question is, and if you're selling something for $2,000 plus, which you should be, no matter what industry you're in, right?

The speaker provides a rough calculation to demonstrate the low cost of acquisition per sale when using a VA, emphasizing that high-ticket items can lead to an impressive ROI.

Outbound Marketing as an Arbitrage Opportunity

  • Defines outbound marketing as an arbitrage opportunity due to the high ROI it can generate.
  • Identifies the common reasons for failure in outbound marketing, such as lack of knowledge or insufficient activity.
  • Advises on recognizing profitable activities and scaling up the process to achieve desired sales numbers.
  • Compares the effectiveness of outbound marketing to paid ads in customer acquisition costs.

And so when you can find these kind of arbitrage opportunities, which this inherently is outbound, is an arbitrage opportunity.

The quote explains that outbound marketing is an opportunity to capitalize on the difference between the cost of acquisition and the revenue generated from sales.

Getting three to one is exciting. This is getting ten to one would be 600. So 30 to one returns. 32 to one returns. And that's something that you can truly print money on.

Here, the speaker is illustrating the potential returns from outbound marketing, suggesting that a 30 to one return is like "printing money."

Consistency and Reliability in Scaling

  • Stresses the importance of consistency and reliability in scaling a business through outbound marketing.
  • Compares the predictability of adding VAs and generating sales to the volatility of paid advertising.
  • Suggests that outbound marketing can provide a steady growth and a solid foundation for business expansion.
  • Mentions the potential for adding back-end support as the business scales.

If you were somebody who's only doing paid having the outbound kind of be a slow growth thing that just becomes this foundational base that every single month you add one more person, then you just know you get another four to eight sales every month and one more person another four to eight sales.

This quote highlights the consistent and incremental growth that can be achieved by adding one VA each month, leading to a predictable increase in sales.

That can be really difficult from a business from a cash flow perspective because it's uneven, whereas this is extremely reliable and consistent.

The speaker contrasts the reliability of outbound marketing with the unpredictability of paid advertising campaigns, emphasizing the benefits of consistent cash flow.

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