B2B Prospecting: Volume, Value, or Hybrid - Which Approach and When?

"How many companies will you target, and how many leads can you get for us?"

"What will be the size of your database?"

"How many dials will you make every day?"

Do these questions sound familiar? Almost every individual heading sales or product marketing for a B2B tech company might have asked similar questions to their lead generation team.

In the last five years of our journey, the Insignytics team conversed with sales leaders and founders in over 300 small to mid-size B2B tech companies on their prospecting needs.

We have come across two types of tech companies:

1. Type 1: Innovative tech solutions, services, and products companies for whom the uniqueness is in their (how) expertise and skillset to address the unaddressed
2. Type 2: Standard, straight-forward services, solutions, product implementation companies, for whom the uniqueness is in their (what) ability to provide manpower, and support

Our team reflected on these questions contextually. We found that there is more to this and unraveled two more categories within each type of the company, based on their understanding of their GTM:

1. Category 1: Those who have figured out their go-to-market outreach, i.e., they know whom to target, what to pitch, how to go about it, and where and when to do so
2. Category 2: Those who are figuring out their go-to-market and are pretty unsure of it or want to be sure before investing in one direction

There are two outreach approaches that any type and category company can take:

1. Approach 1 - Volume-based outreach
2. Approach 2 - Value (Niche) based outreach

Volume-based Outreach Approach - As the name suggests, it works on the volume of a database of all possible accounts and audiences targeted as per the go-to market. This approach works with an assumption that a certain % of the overall volume of audience we target is likely to have an active requirement for what we are looking to sell. So those actively looking to buy will respond back, and the sales team will nurture and eventually convert them into business.

Presumptuously, this approach is likely to result in a constant flow of leads for the companies that have commoditized offering and have a well-set GTM, i.e., type 1 and category 2 companies.

In our experience, we have seen that quite a few Type 2, i.e., innovative tech companies adopt a commoditized selling approach with a hubris of a GTM.

The volume-based approach kills growth prospects for an innovative company, who, for the lack of understanding of sales and GTM, or the fear to admit so, adopts a volume-based approach. We've seen, this kills not only the company's growth prospects but also the industry.

Another thing we observed about volume-based outreach is that it happens in bursts. Once the database is consumed, the teams are looking for new database and new territories. This approach seldom builds sales outreach as an asset to keep getting leads from it.

How Volume Based Outreach Approach Killed CDP Industry

A classic example is the Customer Data Platform (CDP) or Marketing Data Platform space. Marketing analytics companies, marketing automation companies and also the data capturing (cookie) companies, and many others jumped the CDP market space. They looked to acquire a high-value B2B enterprise sales share. Since many of the companies in this space had a genesis in operating low-end consumer-centric commoditized, primarily free tools or variable-based commercials, they promised the cheapest solution to volumes of B2B prospects when they started selling CDP stories. This approach robbed the whole industry of the value that the CDP would bring to the table in the long run. It simply is killing the industry. CDP is an innovative tech offering for a complex problem, and it should be outreached with a value-driven (niche) approach.

Value-Based Outreach Approach - Value-based outreach refers to "being one thing to a few who matter the most." In other words, this approach chooses to address a particular, urgent, and critical problem for a selected group of accounts and audiences within. The overall addressable market segment might look tiny compared to the database we see in volume-based outreach approaches.

The value-based approach works on penetrating through 100% of the addressable market throughout outreach. This is in sharp contrast with the volume-based approach, where we are likely to get only a certain % of the overall addressable market.

The value-based approach focuses on creating initial value for its addressable market without much commitment from the prospect. When each target account appreciates the value and is ready to ask for more, the selling begins.

In our experience, the value-based approach has worked effectively for innovative tech companies, i.e., Type 1, irrespective of their GTM stage, i.e., category 1 or category 2.

The most significant benefit we've experienced with value-based outreach is that it results in a sales asset that keeps generating leads over a period of time from within the niche that is being targeted. Unlike volume-based outreach, which happens in bursts, value-based (niche) outreach is continuous. For example, there is always a conversation going on with a key stakeholder in a target account.

So which approach delivers results, for whom, and at what stage?

While we've answered this question in a couple of bits before this section, at this stage, it is worth to look at what hasn't worked well for us in the past. So, in our experience, the commoditized tech companies attempting to niche route without transforming their messaging, sales support, and sales cycles have seen not much come out of it.

We also observed that the type 1 companies had taken value-based (niche) outreach, mostly because they were driving a branding, image-building objective behind this GTM approach outreach.

In Summary

When it comes to making a choice on outreach approach, we believe that there is no right or wrong choice. For us it's been about making one quickly and executing a GTM experiment to experience the outcomes first hand, learn and make changes in the next course of action. We believe that sales and go-to-market outreaches are ongoing experiments. While volume-based outreach is like brute force and might have an instant result, value-based outreach is artistic and takes its own time. We have successfully run multiple niche outreaches for our clients, and they work effectively to compete with a volume-based approach. Similarly, a volume-based outreach can be performed on a niche identified with conversational selling to achieve the benefits of long-term sales goals. If the company is in the stage of finding its niche, it's better to engage in a niche-based approach. Alternately, if a conviction is achieved on go-to-market and immediate client acquisition is the key objective, volume-based outreach is likely to work effectively.