What is appointment setting?
Appointment setting is a segmented sales strategy where one person is responsible for generating interest with top-of-funnel leads but not going so far as to close the deal. This person’s goal is to set an appointment with interested buyers for another sales executive to close. It’s all based on the idea of division of labor—a way of taking advantage of the fact that prospecting for leads requires a different skill set than closing a deal.
So, you have one person generating b2b sales leads and setting appointments for another sales executive.
Although appointment setting as a strategy can be utilized within any organization, appointment setting is also the most common sales function to outsource. Let’s look at the reasons a company may outsourcing appointment setting:
What Are Some of the Main Use Cases for Hiring an Outside Firm for B2B Appointment Setting?
The primary use case is when businesses want to get a better return on investment (ROI) from their sales appointments. Setting b2b appointments takes time, money, and effort to be successful, and the more efficiently you can use this resource investment, the better off your business will be.
However, while this is by far the most common use case, it’s not the only use case where using an appointment setting business can benefit your company.
Other specific use cases can benefit your business in other ways rather than just improving your ROI.
The Alternative Use Case
The most popular alternative use case is what we call perfecting your product-market fit. This is particularly useful for companies getting ready for their initial product launch.
Early startup or pre-revenue companies are often positioned to benefit greatly from talking with their ideal customers. The more customers they talk to, the better they can understand their pains, hesitations, and other obstacles to purchasing solutions. You can almost think of this as appointment setting market research.
A B2B appointment setting firm can help here by enabling the startup to focus its employees on meeting the appointments rather than setting them up.
Another use case includes markets that can benefit from shortened cycle times. By letting the appointment setting company handle the prospecting and qualifying parts of the cycle, only bringing in your in-house closing representatives when you have leads who are actively ready to buy.
Who is a B2B Appointment Setting Company Right For?
Any company in the business-to-business space can benefit from outsourced appointment setting services. However, one thing to be aware of when looking into outsourced appointment-setting for small businesses is that you need a certain amount of revenue per closed deal to make financial sense.
As a general rule, if your company has an average contract value, or ACV, of under $5,000 you may struggle to generate a sufficient ROI to justify hiring an appointment setting company. On the other hand, companies with higher ACVs can often justify a greater investment on each sale.
Beyond Immediate ROI
It’s also important to remember that not every company in the business-to-business space is actually focused on generating an immediate ROI. A company working on finding the right product-market fit will be more focused on gathering information on what their potential customers are looking for than generating a short-term ROI. Their approach to appointment generation will reflect that.
The Power of Pricing
All business-to-business companies know that the larger the deal, the more time and effort is required to close the sale. These deals also enable a greater ROI, allowing more ability to spend money on an appointment setting firm.
Many companies have multiple stakeholders in different departments and divisions who may all be involved in the decision-making process. Using an appointment setting company allows you to let the company work its way through the various steps required to bring a potential deal to the table, so your executives can focus on closing rather than prospecting.
How Much Does B2B Appointment Setting Cost?
It’s important to understand that you will never ask that question and get a single number as an answer. The truth is that the costs for B2B appointment setting services vary widely depending on the specific services you may want and the circumstances involved.
The first consideration you are going to want to take into account is the payment structure. The essential breakdown is based on whether they are paid for results or for time invested. For example, in a results-based situation, appointment setting companies are compensated for each appointment they set.
Other companies work on a flat retainer where you pay them for the time invested regardless of the number of appointments they generate.
Each structure incentivizes different behaviors, with results-based companies generally providing more appointments while those which work on retainer generally generate higher quality ones.
What about Going Off-Shore?
One option for appointment setting for B2B companies is going to an offshore company to provide leads. With all else being equal, off-shore appointment setting firms will generally be significantly cheaper than domestic ones.
The catch, of course, is that the quality of service varies accordingly, as different firms offer different degrees of familiarity with the domestic market.
So What are the Numbers?
With that in mind, when working with results-based payment structures, the cost for a single appointment can range from several hundred for basic appointment setting to several thousand depending on the difficulty of generating that appointment.
Meanwhile, retainer-based services usually start at $5,000 per month and go up to $15,000 or more, depending on the size of the campaign. Using these numbers, it becomes relatively easy to determine what kind of results you need the campaign to generate to justify the investment.
To discuss your B2B appointment setting campaign, contact SalesRoads today.