Who is Responsible for "Challenger" Lead Generation?

The principles described in The Challenger Sale continue to provoke a great deal of discussion among B2B marketing and sales professionals. In this important book, Matthew Dixon and Brent Adamson argue that what business buyers really want from their potential vendors - and by extension their sales reps - are fresh insights about how to improve their business. Dixon and Adamson are affiliated with the Corporate Executive Board, and CEB has make challenger selling a focal point of its sales advisory practice.

I've written about The Challenger Sale in previous posts (here, and here, for example), so I won't go into detail again. Essentially, Dixon and Adamson contend that high-performing sales reps challenge the thinking of prospective customers, make the costs of the status quo visible, and teach prospects how to think about problems and opportunities in new ways.

Earlier this month, Matthew Dixon and Nick Toman wrote a post for The Sales Challenger blog in response to some critics who have contended that challenger selling confuses the roles of sales and marketing. These critics say that communicating insights about new capabilities and benefits is the primary job of marketing.

Dixon and Toman point to new CEB research regarding how sales reps are engaging potential customers. According to this research, average salespeople:

• Believe lead generation is the company's responsibility
• Assess opportunities based on the clarity of customer needs
• Use social media indiscriminately

In contrast, the research found that high-performing sales reps:

• Conduct non-traditional due diligence
• Personally own lead generation
• Lead with insights
• Use social media as a channel to deliver insight

Dixon and Toman write, "Put differently, the average rep fills orders by reacting to existing demand; stars sell where customers learn (not just where they buy), shaping demand and teaching customers into the sales funnel. The best sales reps, it turns out, are just as good at marketing as they are at selling."

Dixon and Toman don't appear to believe that sales reps should be completely responsible for lead generation. They point out that the heart of challenger selling is disruptive insights, and they acknowledge that depending on salespeople alone to develop such insights is a "fool's errand." According to the authors, it's marketing's responsibility to "arm" sales reps with the required disruptive insights.

So in a sense, Dixon and Toman are contending that marketing is responsible for identifying and developing the insights, but that sale reps are the primary channel for delivering those insights to potential customers.

With all respect, I disagree.

The reality today, whether we like it or not, is that business buyers are self-educating and avoiding conversations with salespeople until late in the buying process. Other research by CEB has found that the buying process is nearly 60% complete when prospects engage with suppliers, and I've seen similar results from research conducted by SiriusDecisions and others.

As powerful as challenger selling techniques are, they can't be effective if prospects won't talk or meet with you.

More than ever before, effective B2B demand generation requires the combined efforts of both marketing and sales. The real essence of the challenger message is that selling organizations must provide new and valuable insights to potential customers. In today's environment, both sales reps and marketers need to be armed with those insights, and they both must be involved in communicating those insights to potential buyers.

Three Things To Do Before Hiring More Sales Reps

When B2B companies need to increase sales, managers will usually consider hiring more sales reps. This thinking is understandable because many B2B companies have long relied almost exclusively on their salespeople to find and win new business. Today, however, simply putting "more feet on the street" isn't likely to produce the volume of new sales that managers are looking for, and even if it does, the cost of those new sales is likely to be unacceptably high.

I've written before about why B2B companies should no longer rely exclusively on salespeople to generate new sales leads. Business buyers have fundamentally changed how they make buying decisions, and these changes require a new approach to B2B demand generation.

So, before you invest in more sales reps, there are three other steps you should take.

Step 1:  Improve Lead Acquisition Marketing

If your marketing programs aren't producing at least 40% - 50% of your qualified sales leads, it's likely that you aren't investing enough in lead acquisition marketing or your marketing programs aren't as effective as they need to be. Marketing must play a larger role in generating new sales leads because in the current environment, business buyers are less receptive to traditional sales prospecting techniques, making such  techniques far less effective and efficient.

For most B2B companies, effective lead acquisition marketing should include a mix of inbound and outbound marketing programs. In both cases, persistence is an important key to success. In today's environment, marketers must assume that multiple contacts will be required to entice a potential buyer to respond.

Step 2:  Implement a Sound Lead Management Process

Research continues to show that most new sales leads are not ready or willing to engage with a salesperson. We also know, however, that most "qualified but not ready to buy" prospects will eventually buy from someone. Once a new lead is acquired (meaning that the prospect has identified himself/herself and indicated some level of interest in your product or service), the big challenge for B2B companies is to build the relationship with the prospect until he or she is ready to make a buying decision.

A lead management process encompasses all of the marketing and sales activities that you use with prospects "from curiosity to close." The objective of a lead management process is to prevent valuable leads from "falling through the cracks" and out of the marketing/sales funnel. While a comprehensive lead management process includes many components, the three core elements are:

• A lead nurturing program that provides prospects relevant, primarily non-promotional information in multiple formats and through multiple channels. The primary objectives of a lead nurturing program are to support prospects throughout the buying process, establish and enhance your credibility, and maintain "mindshare" with prospects until they are ready to have a serious sales conversation.
• A lead qualification system that defines appropriate buying process stages and provides a mechanism for estimating where each prospect is in the buying process.
• A selling process that's designed to identify legitimate sales opportunities and convert those opportunities into closed deals.

Step 3:  Add a Lead Development Representative

Rather than adding more outside sales reps, hire one or more lead development representatives to support your demand generation efforts. Lead development representatives have two primary responsibilities:

• They provide the "human touch" components of your lead nurturing program. In this role, their objective is to use multiple conversations to build rapport with prospects in ways that automated, content-based lead nurturing cannot accomplish.
• They play a major role in the lead qualification process, and they can be primarily responsible for determining when a prospect meets the criteria to be considered a sales-ready lead. When that occurs, the LDR may also be responsible for arranging the first meeting between a prospect and your sales rep.

Lead development reps can perform these functions more efficiently that regular sales reps, and they enable your sales reps to devote more of their time to working with fully qualified prospects who are in the later stages of the buying process.

Hiring more sales reps may be necessary to achieve your growth objectives, but take these three steps first to ensure that you're getting the most out of your existing sales force.

Why Marketing Myopia Is Still A Problem

In 1960, Theodore Levitt wrote a landmark article for the Harvard Business Review titled “Marketing Myopia.” When it was republished in 2004, HBR editors said the article, “introduced the most influential marketing idea of the past half century.”

Levitt’s central argument was that companies will cease to grow if they define their business too narrowly – in terms of specific products or services rather than in terms of customer needs. In a quintessential passage from the article, Levitt explained the decline of railroads in terms that have become part of the business lexicon:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones), but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business.”

The “disease” that Levitt wrote about is still with us, but now, some marketers are also afflicted with another kind of myopia. This new strain of marketing myopia is characterized by an almost exclusive focus on marketing communications and the technologies that support them. As practiced in many companies today, marketing means marketing communications and not much more.

Marketing communications are certainly important, but marketing also has other responsibilities that are essential for business success.

For more than four decades, the term marketing mix has been used to describe the operational aspects of the marketing function. The term became popular in the 1960’s after Neil H. Borden published an article in the Journal of Advertising Research titled “The Concept of the Marketing Mix.” Borden’s marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that we know today as the 4 P’s of marketing – product, price, place, and promotion

The point of this brief history lesson is that marketing has long had a mandate that is broader than marketing communications (promotion). Companies can suffer when marketing ignores these broader responsibilities because, of all the major business functions, marketing is (or should be) the best suited to relate a company to its external competitive environment.

So, if you’re a marketer, give these ideas some thought:

·        Marketing is about communicating your company’s value propositions, but it must also be about determining what those value propositions will be.

·        Marketing is about communicating the important features and attributes of your company’s products or services, but it must also be about determining what features and attributes your products/services need in order to be attractive to buyers.

·       Marketing is about communicating your company’s price-value equation, but it must also be about determining what your company’s pricing strategy will be.

Marketing communications will always be a critical part of the marketing function. But marketers need to keep the other aspects of marketing in mind in order to avoid a bad case of marketing myopia.

Closing the Credibility Gap in B2B Marketing

The dictionary definition of credibility is the quality or power of inspiring belief. Credibility with prospects and customers is critical to the success of any business. Credibility creates trust, and it is one of the attributes that elevates a B2B company from "potential vendor" to "trusted advisor."

It's now clear that marketing content plays a leading role in B2B demand generation. In many cases, a prospect's first impression of your company will be based on the content you publish. To be effective, marketing content must be relevant and credible to the intended audience.

The relevance of marketing content is primarily determined by what the content communicates. Does it discuss issues that are important to the intended audience? The credibility of a content resource is primarily determined by how the resource communicates the message.

All B2B marketers face a credibility challenge, at least to some extent. The reality is that business buyers have a built-in inclination to distrust marketing content. The credibility gap was clearly shown in recent research by DemandGen Report. In the 2012 Content Preferences Survey, participants were asked to identify the kind of content they gave more credence to.

• 52% of respondents said peer reviews/user generated content.
• 33% said content that is authored by a third-party publication or analyst and sponsored by a vendor.
• 12% said co-branded content.
• Only 4% chose content that is branded directly from a vendor.

How to Close the Credibility Gap

Credibility is important for all kinds of marketing content, but it's absolutely critical for content that is used to reach prospects who (a) are in the early stages of their buying process, and (b) are not familiar with your company. Content credibility is essential in this situation because many of these prospects will decide whether to begin or continue a relationship with your company based solely on the credibility of your content.

For these early-stage prospects, the most effective way to establish credibility is to use brand-agnostic content. Brand-agnostic content is content that does not directly or overtly promote your company or your products or services. To create engagement with early-stage prospects, the first requirement is to demonstrate that you are a reliable source of relevant, accurate, insightful, and (mostly) objective information. If your content overtly promotes your company or your products or services, many early-stage prospects will tune you out even if your content also provides valuable information.

Recent research shows just how widespread the dislike of promotional content is among business buyers. In the DemandGen Report survey mentioned earlier, 74% of respondents said that solution providers should "curb the sales messages" in their content resources. In a 2012 survey of technology buyers by UBM TechWeb, 77% of respondents said the biggest mistake technology vendors make is to include too much marketing "fluff" in their content resources.

When prospects enter the consideration/evaluation stage of their buying process, they will want and need to learn more about your company and about the specific features and capabilities of your products or services. That's where promotional content is both necessary and appropriate. Before that, however, promotional content may do more harm than good when it comes to creating engagement with potential customers.

Using brand-agnostic content will undoubtedly be counterintuitive for many B2B marketers. But in today's environment, the reality is that you can sell more by "selling" less.

Why Your Sales Reps Need Tablet-Ready Marketing Content

Unless you've been stranded on another planet for the past couple of years, you're already aware of the popularity of tablet computers like Apple's iPad. Tech research firm Gartner estimates that 119 million "media tablets" will be sold worldwide in 2012, a 98% increase over the 60 million units sold in 2011. Gartner predicts that worldwide sales will reach 369 million units in 2016.

The explosive growth of tablet (and smartphone) ownership has caused many companies to treat these devices as a marketing channel. Research firms like Forrester have been tracking the growth of "mobile marketing" for the past several years.

Most of the buzz about mobile marketing has involved B2C programs. What has gone less noticed is that tablet computers are quickly becoming an important sales enablement tool in many B2B companies. In a recent poll of its members by the Corporate Executive Board, 75% of respondents said they are already using tablet technology to support sales or plan to begin using tablets within the next 12 months.

Consider just a few examples:

• Earlier this year, InformationWeek reported that Level 3 Communications, a telecom and network services company, had just given iPads to its 1,300 North American salespeople and sales engineers.
• In early 2011, cbsnews.com reported that AstraZeneca and Novartis are among several pharmaceutical companies that have acquired iPads for some of their outside salespeople.
• In late 2010, Medtronic, Inc., a medical devices company, made news when it purchased 4,500 iPads for its sales and marketing team.

It's easy to understand why tablets are great sales tools. They enable sales reps to deliver interactive presentations, and with the right applications, they can allow salespeople to access CRM systems and other internal sales resources. Because of their size, weight, and design, tablets are easy to use for one-on-one presentations, and many tablets can be connected to projectors or big-screen TVs, so group presentations are easy to make.

Sales reps also love tablets because they make life easier. For example, before they received iPads, Medtronic's salespeople routinely carried about 25 pounds of printed product literature on sales calls. The iPads make most of the printed collateral unnecessary, and they weigh less than two pounds.

The benefits of using tablets to support sales efforts are obvious, but it's important to realize that they also create new challenges for marketers. To maximize the potential of tablet-based sales presentations, companies need to provide salespeople new kinds of marketing content. B2B marketers have long been responsible for supporting salespeople with marketing collateral documents such as company brochures, product brochures, and customer case studies. These collateral materials have traditionally been printed documents that sales reps would carry on sales calls.

With tablet computers, these traditional marketing collateral documents can be transformed into rich, interactive marketing content. For example, a product brochure can include links to schematic drawings or audio/visual files that show the product in use. A company brochure could contain a video message from the CEO or a brief interview with an industry analyst.

Developing this kind of rich, interactive content is primarily a marketing function, but marketers must work closely with front-line salespeople to ensure that the content will be relevant and compelling for prospects and easy for sales reps to use.

So far, the use of tablets for sales presentations has primarily involved large enterprises. Given the significant benefits, however, that's about to change. Therefore, if you're a marketer in a large or midsize B2B company, you should be thinking now about how you can develop tablet-friendly content and how you can put that content in the hands of your sales reps.