Are You Selling Like A Scientist?

Figure 1: Are You Selling Like A Scientist?

We waited with anticipation, like so many millions, for the announcement of one of the greatest discoveries of this century (perhaps any century). 

A distinguished scientist took centre stage and said a few scientific sentences. He concluded with the following words: 

‘…they combine to give us a significance of 5 standard deviations…’ 

The audience broke into applause. That is how – The Higgs Boson (or God Particle) was announced to the world. You can see the video on YouTube. 

Great science, but poor communication. But then it is a mistake that is made by many sales teams and buyers too. 

Do You Keep It Simple?

The question for sellers is: 

Are you driving for complexity when your customers really want things kept simple? We all do it for our own area of expertise – adding complexity and creating confusion in the following ways:

• Complicating the customers stated needs by proposing extras and add-ons that the customer didn’t ask for – we fail to measure exactly how much the customer needs the extras.
• Getting into too much detail too fast and using technical language that most customers don’t understand – we fail to check that the buyer knows what key terms mean.
• Failing to provide simple explanations, including visual representation, customer case studies – we make the dangerous assumption that the customer gets it. 
• Focusing on features and feature related benefits, rather than exactly what the customer wants to achieve. 
• Failing to find out how much the customer knows and understands and tailoring the solution and how it is communicate accordingly – we fail to test the level of sophistication of the customer and pre-qualify customers appropriately. 

Selling too low down in the organization where the focus is on the features of the product, or solution being bought, as opposed to the results that are to be achieved.

Vendors are not perhaps the best placed to judge what level of complexity, or sophistication their customers need or want. All too often vendors are product, or technology led. 

Buyers Can Over-Complicate Too

A key question for sales people – are your prospects driving for complexity when they should be keeping it simple? 

High involvement buying process and cross functional buying teams – have the potential to drive complexity up as opposed to down. 

Buyers typically want more for less. That can lead to demands for the latest technology, the full list of features and a wish list of requirements. 

Making assumptions about what the end user wants can be costly. Ask the end user, you may be surprised at the results. For example in a major CRM project end users were shown the key features and asked to rate them from 1 to 10. Now you would expect in this gadget obsessed era people would have said that they wanted all the features and more besides, but they didn’t. Indeed, some of the key features (e.g. social networking) were consistently rated at just 2, or 3 out of 10.

It is the sellers job to ensure that the buyer does not over-complicate things.

Complexity Eats Competitive Advantage

The reality is that competitive advantage is rarely feature driven, it certainly is not complexity driven.

Keeping it simple should give the seller an edge. It means clearly demonstrating to the buyer the results that the solution will deliver. All else is secondary.

The most effective means of doing this is by means of credible customer success stories to which the buyer can relate to. What customer stories are you using to engage potential buyers?

Sell To Laggards, Not Innovators

A key mistake made by many sellers is to treat customers and prospects as early adopters and innovators. This flies in the face of the reality that most people are laggards when it comes to embracing complexity and technology.

In any respect most organizations don’t want early adopters and innovators making vitally important business decisions around technology, the risks are often too great.

So, the lesson for buyers as well as sellers is to treat end users as laggards, rather than innovators. That means putting a priority on reducing complexity.

Features Drive Complexity

Sellers try to outdo each other on features. But more features means more complexity and that isn’t necessarily a good thing. Complexity can:

• Cloud the results that the customer wants to achieve
• Increase buying, technical and other forms of risk
• Slow adoption or implementation
• Drive cost (direct and indirect) and increase the total cost of ownership.

The key question is: ‘Just how much complexity does the customer want, or can the customer cope with?’

We are often reminded that 80:20 rule applies to technology – that 20% of the functionality of any new technology is used 80% of the time, and the balance is rarely used. Yet the temptation is to sell the 100% of features. That is a temptation to be resisted.

The ‘S’ In Selling Stands For Simplify

Making the complex simply is the job of the salesperson. That means managing the level of complexity and adjusting it to the profile of the customer.

Here are some tips that will help you to make a make a virtue out of simplicity in selling:

• Your solution is more complex than you think it is. Complexity is in the eye of the beholder – as seller we all too often underestimate the level of perceived complexity of our solutions.
• Engage more effectively with the customer in understanding needs and exploring solutions.
• Meet the customer where he or she is at by measuring the customers level of sophistication/complexity/maturity.
• Simplify the decision, break it down into its component parts and explain it more clearly and more slowly.
• Let people play with your solution, providing trials, phased implementation, etc.
• Stop using technical terms, buzz words and acronyms.
• Provide a solution that grows with the customer in terms of level of complexity, but start simple.
• Simplify the solution for the buying team – break it down into its components, strip it back and focus on the 80:20 rule.
• Analyze needs by buying team member end user usage scenarios.
• Align your solution with the people and processes and systems of the organization.

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By the way if you are looking for a simpler way of explaining the Higgs Boson click here for a clever video. Even better read the top 5 points you need to know.

References 

John O' Gorman: Are You Selling Like A Scientist? Retrieved January 30, 2014 from http://buyer.sellerinsights.com/2012/07/24/are-you-selling-like-a-scientist/

Dragan Simeunović
Senior Sales Consultant

Turning Your Sales Process Into A Sales Magnet

It is time to re-think the purpose of your sales process – its role in your success, as well as its value for your customers.  Managers need to stop thinking of their sales process as set of steps that should be followed. The next generation of sales process is about customer engagement, as much as it is about sales consistency.  That is key to its contribution to sales team success.

Does Your Sales Process Enhance Your Success?

How much does your sales process contribute to your sales success?  That is a challenging question for any sales manager.  An even more difficult question to answer is ‘How does your sales process contribute to your customer’s success?’

Most managers don’t see their sales process contributing significantly to winning sales.  They seem to be happy to settle for a sales process that delivers increased:

Visibility – Predictability - Control
Uniformity - Consistency - Standardization
Efficiency - Productivity - Automation

These factors are important, but can a sales process do more to help win sales?

When most people talk about sales process there is little mention of the customer or prospect, or even the sales person.  Little wonder that how the sales process contributes to increased sales is not clear.

Who Does Your Sales Process Really Serve?

Salespeople often complain that it is difficult to get their customers and prospects to open up fully and engage.  They view with horror the rise of competitive tendering processes – where suppliers are kept at ‘arms-length’.

Salespeople resent being treated like just another salesperson who can be diverted to procurement, or left on hold. But most sellers have not given their customers a reason to want to engage more deeply and their sales processes don’tappear to help.

The question is: What does your sales process do for your customers and prospects?  Just exactly how does it benefit them?  The answer in many cases is little, if at all.  This simply has not been a factor in how sales processes have been created.  But your customers want more from your sales process.   So too do your sales people.

Organizations need to re-think their sales process if they want their customers to open up and engage in a more creative and meaningful dialogue about their problems and how they can be solved.

How Does Your Process Help Customers?

Yes, it is hard to get excited about process.  But that is exactly what is required.  Your sales process has to excite your customers, as well as your sales people. It is at the very core of how they interact with customers, the level of engagement, the quality of conversations and the depth of relationships.

Your sales process is how you want to engage with your customers. The set of steps or touch points by which you gain the trust of, impress and even excite the customer.   At its core are high quality conversations.

The basic principle is this:  the sales process that adds value for the customer generates revenue for the business.  The greater the value the greater the revenue.  So the question is how much value does your sales process create for the customer?

The effectiveness of the sales process should be measured in terms of:

• The quality of customer conversations
• The level of engagement from customers
• The creativity involved in solving customer problems
• The depth of customer relationships.

These are all proxies for increased sales success – that is why they are an important measure of your sales process.  You will find a test that will help you gauge your sales process at the end of this insight.

It Is Time To Expect More From Your Sales Process

It is time to expect more from your sales process.  Here are 10 ways in which your sales process should contribute more:

1. Sales process has to be about more than selling your product – it has to focus on solving the customer’s problems.  There should be no pressure on the customer and no hidden agenda on the part of the salesperson.  That is key to ensuring a high level of trust.

2. A vital ingredient of any high impact sales process is that it focuses on the customer’s vision of success.  Helping the customer to achieve increased clarity and confidence regarding their desired outcome is key.

3. It should make the buyer’s journey easier and help them to buy.  So it has to take account of where the buyer is at in the buying process – for example whether they are actively shopping for solutions, or simply becoming aware of the problem.  It has to address the growing need for any purchase decision to be justified internally and the requirement for a business case, or a set of numbers.  It also has to help the buyer to meet the challenges of aligning stakeholders and managing risks.

4. It is a coaching process.  That is to say it is not just about telling the customer what he she needs or telling them why your company and its solution is great.  Rather it is a consultative process where the customer is engaged in the process of analyzing needs and exploring solutions.  This is important because when the customer is involved in co-creating the solution their level of ownership and commitment is at its greatest.

5. It should be transformative – It is not just about sharing information – that is not enough.  Today’s buyers have access to a vast array of information sources and can often end up in ‘analysis-paralysis’.  The advisor or sales person should be able to offer insights and wisdom, not just information.

6. Your customer-engaging sales process should be a creative problem solving process – one that re-frames the buyer’s problems or opportunities.  The process of interaction with the salesperson should result in new insights, new thinking and even break-throughs for the customer.  That is the ultimate test.

7. It leverages the seller’s experience, wisdom and creativity.   Most sellers (and their organizations) have accumulated significant knowledge and wisdom.  The sales process should be the means by which the customer gets to access and benefit from that knowledge.

8. It should be packaged in a way that ensures that the benefits of engaging in it are clear.  If you want the customer or prospect to commit their time then you need to communicate what they will get out of it. Here are some other considerations in packaging your process:

• Brand the process – how can you put a TM on the end of it?
• Create a visual representation of the process – what does it look like?
• Create some intellectual property around it – how can you integrate proprietary insights, research or tools into the process?
• Put science behind it – what reports, research or analysis can you leverage (either your own or that published by 3rd parties)?
• How to tangibilize the process – e.g. including physical reports and outputs?
• Clear outputs – what are the deliverables or outputs for the customer?
• Put a value on it – what will the process deliver in terms of time saved, opportunities identified, etc?

9. It should leave nothing to chance in terms of your customer’s experience.  That means managing all the touch points – the website, the call, the meeting and so on – to create a consistent high quality customer interaction.

10. It should seamlessly integrate sales and service, or delivery, continuing after the sale has been made to cover the end-to-end process of customer engagement.  It spans the full customer lifecycle with a view to capturing an increased share of the customer’s total spend, or wallet.

Are You Selling People, A Product or A Process?

If you are selling a service then the process around its sale and delivery is especially important.  But an important question for any business to ask is ‘Are you selling people, a product or a process?’  Too often it is people, or product, with little attention given to the process that underpins it all.

The principles of process can be applied to any business – here are some examples:

• A company selling IT support to Data Centres then your unique value-adding process could be around how you audit compliance, energy, reliability and performance.

• A company selling Warehouse Management Solutions could have a unique value-adding process around how it sets goals for and tracks progress in terms of order accuracy levels, inventory levels and other KPIs

• A Wealth Management Practice could have a unique valued-adding process around helping clients to create a financial plan and vision and bring it to life.

• A recruiting company could have a unique value-adding process around helping to ensure the fit of candidates with client positions through role definition and behavioural profiling.

Putting a unique customer engaging and value creating process at the core of your business could add greatly to, not just its sales success, but also its value proposition.  The process itself could be what your customers pay for next year – that would be a real indicator of its value.

Ideally your sales process should be a clear point of differentiation between you and your competitors.  This is particularly important in commoditized markets. 

Test:  How ‘customer-engaging’ is your sales process?

The first generation of sales process was about greater visibility, predictability and control.  The next generation must focus on engaging the customer more deeply.  That is at the core of sales success in modern age.

Here is a test of just how customer-engaging or value–creating your sales process is.   See if you agree with the statements listed below.

1. Our sales process adds real value for the customer – it ensures that the customer gets a lot out of engaging with us.

2. Our sales process helps the customer to bring new creativity to solving their problems.

3. Our sales process brings about new thinking on the part of the customer – it results in new insights and break-throughs.

4. Our sales process creates a high-trust environment in which the customer really opens up and engages with us.

5. Our sales process is centred on helping the customer to clarify and create their vision of success.

6. Our process results in meaningful high-impact conversations with the customer.

7. Our sales process packages up the accumulated knowledge and wisdom of our organization (or the salesperson) and makes it accessible to customers.

8. Our sales process is effective at positioning the salesperson as an expert, consultant and trusted advisor.

9. Our sales process helps the customer to confidently make a decision as well as to build a clear and compelling justification for the purchase.

10.  Our sales process is aimed at addressing customer fears and concerns, including, risks, uncertainties, conflicting requirements, trade-offs, and so on.

Check Your Score

Count up you answers to arrive at the score for your sales process, giving each answer a value as below:

Absolutely Agree = 5

Agree = 4

Neutral = 3

Disagree = 2

Absolutely Disagree = 1

When you have calculated your total score, use the following as a guide:

40-50: Your sales process actively engages the customer. It is a competitive weapon and directly contributes to your sales success.

30-40: Whether your customers really open up and engage depends on the style of the salesperson, rather than the design of your sales process. That means engagement does not always happen and sales shocks and surprises can result..

0-30:  Your sales process does not really help you sell and offers little to the customer by way of value, problem solving or relationship-building.  Indeed it may be limiting your sales success. 

References   

Ray Collis: Turning Your Sales Process Into A Sales Magnet. Retrieved January 22, 2014 from http://buyer.sellerinsights.com/2013/12/17/turning-your-sales-process-into-a-sales-magnet/8/

Blaž Mertelj
Managing Director & Senior Consultant

  

Don't let complexity kill your sales model

For decades, scale economies ran like clockwork in the world of sales. Companies in business-to-business (B2B) markets consistently grew their revenues faster than their sales and marketing expenses. But over the past decade or so, that trend has stalled and in some cases reversed. The sales models for many large companies have become more complex and less efficient, putting pressure on profit margins. 

How big is the problem? Bain & Company analyzed the 2003-2011 income statements of roughly 200 large US-based companies in healthcare, technology and financial services. Just over half of those companies had increasing sales and marketing expenses as a percentage of revenues over that period or failed to demonstrate the benefits of scale that one would expect from their growing size. 

A few factors account for this reversal. Business customers increasingly want their vendors to have real expertise in their specific industry or function, such as finance or marketing. They expect vendors to help solve business problems, not just sell widgets. In turn, B2B vendors have expanded their product lines, and many have added solutions that knit together disparate products or services into an integrated offering. 

Achieving growth targets profitably requires a scalable, high-return model. That means knowing where and how to invest in sales resources. As B2B providers restructure their sales model for these new realities, four actions can help them keep on track with greater certainty and pace. 

1. Identify customer sweet spots and define the appropriate offering, then put arepeatable process in place to expand to other segments. Suppliers can identify the sweet spots for investment by using two criteria: segments with the most attractive lifetime economics and those where a company’s distinctive offerings win consistently.

Infor, a US-based firm that sells software solutions mostly to small businesses, identified roughly 2,000 micro-verticals, such as brewers and hospitals, where it had more specific and relevant offerings than competitors. By identifying standard building blocks of functionality that can be readily adapted for different geographies or micro-verticals, Infor has created a repeatable process.

2. Get the right people in front of the customer at the right time. It’s critical to get right the mix and sequence of industry or functional sales specialists. Too few could jeopardize a sale because an expert may not be available to cover an area the customer considers crucial. Too many may make the cost of the sales effort uneconomic relative to the revenues accrued.

Investment in specialists thus can be “perishable” as a solution moves through its life cycle. Deploy specialists early in the cycle to gain a foothold, and expand to build expertise ahead of the competition. Once sales increase, make sure the customer relationship executive learns the basics from the specialists, in order to independently generate and qualify leads. When sales have ramped up sufficiently, reserve use of specialists only for the biggest, most complex deals, and redeploy them to other potential high-growth areas.

AutoTrader, a US media and software solutions provider to automotive dealers, decided to untangle its myriad go-to-market organizations after making four acquisitions in two years. To boost productivity, AutoTrader realigned specialist roles for some mature products and began to move administrative functions from the generalist account managers to the inside service team so they could generate leads across a broader portfolio. At the same time, the company added specialist roles for complementary products in the software portfolio, such as a customer relationship management product. Early results are promising: The cross-selling pipeline is growing, and account planning across generalists and specialists is working well.

3. Design compensation to promote behaviors that support your business goals. It’s critical that everyone in the sales organization focuses on attaining defined, well-communicated business goals and growth targets. Incentives should motivate individuals to reach those goals rather than falling back on traditional measures such as “last year plus 10%.”

One food company, for instance, struggled to raise prices in part because salespeople were measured strictly by their sales volume, with a bonus for their tenure. By changing the performance metric to give equal weight to volume and maximizing price, the company moved prices from slightly below market to nearly 2% above in just two years. That move alone yielded a $50 million increase in pre-tax earnings.

4. Equip the back office to allow sales representatives to spend more time selling.The back office can take on most of the lead qualification, proposal development, pricing approval, contract management and billing management—adding back 20% to 30% productivity to a sales representative’s day. Making sure billing errors get fixed, for instance, consumes a lot of time for some reps who want to protect their customers’ loyalty. With a concerted effort, a company can apply serious process improvement to the billing unit, hire select skilled analysts and look to attain a zero-defect operation.

Some complexity in B2B markets is inevitable, but not to the extent that it stalls growth. Cutting through complexity requires a simpler, disciplined sales model that can work in one segment after another.

Read the full report: Is complexity killing your sales model?

References  

Dianne Ledingham, Mark Kovac, Michael Heric and François Montaville: Is complexity killing your sales model? Retrieved January 15, 2014 from http://www.bain.com/publications/articles/dont-let-complexity-kill-your-sales-model-forbes.aspx

Image: http://www.wired.com/images_blogs/photos/uncategorized/2008/04/15/complexity.jpg

Dragan Simeunović
Senior Sales Consultant

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The Trend That is Changing Sales

                                                       Figure 1: Have your sales people achieved annual quota last year? 

Over the past several decades the structure of sales organizations have remained largely the same. They have been primarily based on outside field salespeople who make face-to-face sales calls with prospective customers and current clients. In turn, the field salespeople would be supported by inside sales representatives who helped them complete their daily tasks. 

Today, the traditional sales organization structure is undergoing a significant change. Many sales organizations are transitioning from a field sales model to an inside sales model, where the inside salespeople work independently from the field and are directly responsible for closing business. In order to understand the magnitude of this trend, in-depth interviews and extensive surveys were conducted with over one-hundred vice presidents of sales at leading high technology companies and business services providers. The resulting research provided detailed insights about the evolution of sales organizations along with the following key finding:

Over the past two years, forty-six percent of study participants reported a shift from a field sales model to an inside sales model. Twenty-one percent reported a shift from inside sales to a field sales model. More than twice as many study participants reported moving to an inside sales model.

There are three key factors that determine when a sales organization will utilize a field or inside sales model. They are the sales organization’s stage of development, the complexity of the products that are sold, and to a lesser extent, the sales leader’s perception of inside and outside sales model effectiveness. 

Sales Organization Development Stage 

Every sales organization can be classified into a "Build," "Compete," "Maintain," “Extend,” or "Cull" stage based upon its development. The Build stage is when the sales organization is first establishing itself.  If successful, it will proceed to a high-growth Compete stage and then to Maintain stage that is contingent upon predictable success. As the sales organization ages, it will enter either the Extend stage and enjoy longevity or the Cull stage, where it declines and is forced to reduce its size. The ratio of outside or inside salespeople changes as the organization moves from the Build to Compete to Maintain development stages. 

The challenges sales organizations face is dependent upon the stage of their development. The top sales challenge in the Build stage is creating sufficient sales coverage to push the product into the market. The Compete stage challenge revolves around quickly scaling the sales organization so it can compete effectively against larger established competitors. The focus shifts to maximizing sales productivity by lowering the cost of sale and increasing the average sales price in the Maintain stage. The Extend stage challenge is to attain widespread customer adoption so their solution becomes the de facto standard. The Cull stage challenge is to revitalize a demoralized and marginalized sales force. These challenges directly influence the sales organization’s structure and whether a field or inside sales model will be deployed. 

Sales Cycle Complexity 

The complexity of the sales cycle determines the evolution of the sales organization and at what point outside field or inside-based sales models will be implemented. Sales cycle types can be classified by complexity as Enterprise, Platform Cloud-based or Point-specific. Each of these sales cycles vary in complexity depending upon the number of individuals and departments involved in the selection process, the size of purchase, and sophisticated nature of the solution offered. 

Enterprise sales typically are large capital expenditure purchases that involve long sales cycles. Multiple departments of a company and all levels of the organization (C-level executive, mid-level management, and lower-level personnel) are needed to approve the solution’s functionality and its purchase. A point-specific sales cycle is usually targeted to solve the business problems of single department within an organization and the purchase decision is made by a small number of decision-makers usually at the lower-level of the organization. The Platform Cloud-based sale provides a turnkey business solution for the customer over the internet and is sold directly to the business users of an organization. There is a preferential field and inside sales model strategy for each of the sales cycle types.  For example, a field sales model is preferred for enterprise sales cycles and an inside sales model is preferred for Platform Cloud-based sales cycles. 

Sales Leaders Perception of Field and Inside Sales Models 

While the goal of this study was to gather quantifiable metrics based on surveys and interviews with sales leaders, there is another aspect of sales model decision making that cannot be ignored. Ninety-eight percent of study participants responded that the characteristics between inside and outside salespeople are significantly or somewhat different.

Most sales leaders believe that outside salespeople have superior sales skills and the most accomplished sales professionals are in the field as evidenced by the sales leader comments below. This in turn can influence their decision and whether they implement a field or inside sales model. 

“Field Sales is more strategic, meeting with C-level executives and developing strategic business innovation to help them grow their business versus inside which is more quantity and not as in depth majority of the time.”

“Inside Sales is a transactional engagement and the focus is on opening opportunities.  Outside teams are solution and relationship based.”

“Outside sales requires far more emotional intelligence, situational awareness and planning. Our inside sales, while equally demanding, requires persistence, research, and back end work.”

Furthermore, many sales leaders have a personal bias toward deploying outside salespeople over inside sales. In some cases, this inclination was based on their own experience from many years ago when they were in field sales. However, this historical disposition is being offset by the changing nature of how customers buy today. Customers are smarter and information is not only easier to find, but available in greater detail than ever before. In addition, technology has become a way of life and completely disrupted the buying process. Via the Internet, customers can research products, prices, and opinions. 

This situation is driving more sales leaders to consider and then deploy an inside sales model. For example, study participants were asked to rank the influential factors that are responsible for the migration from field to inside sales. Sixty percent responded that it was due to the increasing pressure on business performance and profitability. Fifty-four percent said it was due to technology advancements. Forty-seven percent felt that buyers more readily accept the remote selling process and thirty-four percent believed it is because of societal changes such as a mobile workforce and personal online purchasing habits.  

Study participants also cited the following advantages of an inside sales model compared to field sales model. Eighty-four percent believe it is easier to onboard new salespeople and share best practices. Seventy-nine percent responded that inside sales allows the organization to scale faster. Increased call activity and selling volume was cited by seventy-eight percent of responders. Seventy-six percent acknowledge that inside sales provides a better strategy to penetrate small businesses and mid-markets. 

Today, there is a changing perception among sales leaders about the strategic role inside sales performs. This change is due to the benefits that sales leaders believe the inside model provides in terms of scaling activity, growing the organization, and attacking specific markets.

Please click here if you would like to receive the full 29 page report on the latest sales organization strategies and key sales performance metrics.

  

References   

Stewe W. Martin: The Trend That is Changing Sales - Harvard Business Review. Retrieved January 6, 2014 from http://heavyhittersales.typepad.com/heavy_hitter_sales_sales_/2013/11/the-trend-that-is-changing-sales-harvard-business-review.html

Blaž Mertelj
Managing Director & Senior Consultant

  

How Hard Is It To Get Cold Email Replies?

                                                                               Figure 1: Is Email dead or dying?

I tend to get overly excited when I ever I get a positive response from a prospect to a cold email.

I feel as if I cracked some code to gain that momentary share of attention bandwidth and now I’m “in”. From the likely dozens to hundreds of emails that individual received, they chose to take the time to respond to mine. 

I realize sometimes its PSL (pure sh*t luck) or simple name recognition but I’d like to attribute some of my success to being thoughtful and deliberate in the approach. Keeping the email simple, relevant and familiar seems to be the key to getting that initial engagement.

In thinking about the metrics behind “cracking the cold email code”; I started wondering what are the odds of my email being seen, let alone opened, let alone responded to no matter how creative and thoughtful I was.

I decided I’d start with the general question of “how many b2b emails are sent on a daily basis”. Most of the data that I was able to personally find that felt “real” (e.g. backed by research) was dated…it seems like 2011 was the last year I could find consistent or comparable figures from multiple sources on email trends. I could find anecdotal stuff from one vendor or data from a survey etc; but trying to validate those figures from multiple sources proved challenging. Either I’m looking in the wrong places (likely), or these research firms simply chase the shiniest trend or the press just isn’t covering this as much so the content isn’t as well indexed. The good research on email was generally pre-mobile and pre-social; so maybe these firms just shifted their attention and focus.

Does that mean email is dead or dying? 

Not a chance; but like all things digital it’s obviously evolving. Even with the explosion of social sites, webapps and mobile – all these things require an email address for the most part as a form of digital currency proof of identity / user name. 

I did find one source of email trend data that at least had a history of providing information consistently. The Radicati Group out of Palo Alto, California describes themselves as the “Leading analyst firm covering Email, Social Media, Instant Messaging, Security, Wireless, Archiving, eDiscovery, DLP, Unified Communications and more” I’ve never heard of them previously (which means absolutely nothing in terms of their credibility) but there is a nice library of market research information available on their website; most of which is pay to access. I did read the executive briefing they made publicly available on the Email Market for 2013-2017 (link below) and wanted to pass along some interesting figures they share: 

• Counting both business and consumer users (unique individuals?); there are over 2.4 billion email users worldwide. There are about 7 billion people in the world; so that number feels “right”. They forecast that number will grow just 3% a year through 2017. I’m guessing internet accessibility in 3rd world countries supresses that growth.
• Counting both business and consumer accounts (unique addresses?), there are 3.9 billion accounts; growing to 4.9 billion by 2017 (growth rate 2x number of users); why the difference? Most people use more than one email address…reasonable. 
• Worldwide email traffic (business and consumer) is estimated at 182 BILLION EMAILS PER DAY; expected to grow to 207 BILLION EMAILS PER DAY in 2017. This is only a 3% increase YOY…but that is a serious huge number… Doing the math; that says the average user gets about 75 emails per day (182 billion emails divided by 2.4 billion users) – that math checks out. Separating the business and consumer is where it gets interesting. 
• Business alone counts for over 100 Billion of that 182; and they expect business emails to go up 7% per year while consumer emails to decline by 3% per year. I buy those numbers, we’re emailing friends and family less frequently due to social and texting – but the business world is still heavily reliant on “traditional” email for both internal and external dialog. I would even buy a much steeper decline on consumer / personal than they illustrate and sharper increase on business.

So…let’s go back to my original question that prompted this and figure these odds out; let’s say 65% of email users have a business email account. I’m taking some liberties there and probably too generous, but unemployment rate plus service / retail jobs that don’t have business email addresses…that means 1.55 billion business email users (65% of 2.4B) and with 100 billion business emails per day; that equates to about 64 business emails per day per professional (lower than I would have guessed).

Now we have to start thinking internal business emails vs. external business emails and associated open rates of each etc.. This made my head hurt…but playing with numbers from my gut; I said 40% of these emails were external (e.g. knuckleheads like me) and we probably are in the industry average 25% open rate and 5% click thru rate (I’m equating a click-thru with a reply).

So this leads to roughly 26 external business emails per day; about 6-7 of those are opened per day, and 1.3 click-thru’s or replies…so with my 1 reply received; I guess I was the lucky winner that day and cracked the code to get the attention this individual had for that 1 of 1.3 external email correspondences he /she had that day with external emails. 

Email Market 2013-2017 Executive Summary: http://www.radicati.com/wp/wp-content/uploads/2013/11/Email-Market-2013-2017-Executive-Summary.pdf

References

B2B Lead Nurture Engine: How Hard Is It To Get Cold Email Replies? Chasing the odds and cracking the code. Retrieved December 24, 2013 from http://nurtureengine.wordpress.com/2013/12/20/how-hard-is-it-to-get-cold-email-replies-chasing-the-odds-and-cracking-the-code/

Image: http://blog.salesloft.com/wp-content/uploads/2012/06/cold-emailing1.png

Blanka Cigler

Senior Consultant, Coach & Project Manager