Sunday, May 26, 2013

Kill the Friction Gremlins to Accelerate Buying Decisions

In a recent survey by CSO Insights, almost three out of four respondents (73%) said that their average sales cycle for new customers requires four or more months to complete. B2B marketing and sales professionals know that reducing the length of the buying/sales cycle will produce substantial benefits, but this is not an easy task. The only truly effective way to accelerate the buying process is to reduce the friction that slows prospects

When it comes to accelerating the buying process, B2B marketing and sales resemble the sport of curling. Curling is a little like shuffleboard, but it's played on ice and involves sliding a large polished granite stone toward a target painted on the ice. The playing surface is prepared by spraying water droplets (called "pebble") on the ice. Because of the friction between the stone and the pebble, the moving stone will turn or "curl" to one side or the other.

After one team member "throws" the stone toward the target, two other team members accompany the stone as it moves down the ice and guide it toward the target. The catch is, these players aren't
allowed to actually touch the moving stone. Instead, they use brooms to sweep the ice in front of the stone. Sweeping temporarily melts the pebble and reduces the friction between the stone and the ice, and this changes both the speed and the direction of the stone. Therefore, sweepers affect where the stone stops, but they do so indirectly.

In B2B demand generation terms, friction is anything that slows a potential buyer's progression through the buying process. Like the sweepers in a curling match, one your primary jobs as a marketer or a salesperson is to reduce friction. You would like to be able to directly lead your prospects through the buying process, but in today's B2B buying environment, attempting to push prospects through the buying process on your schedule just doesn't work - at least not very often.

The friction gremlins live everywhere in the buying process, and some of the causes of friction are beyond your control. For example, a change in the prospect's business or financial condition, or a change in the composition of the prospect's senior management team can delay or stall the buying process.

The good news is, you can address many causes of friction with the right marketing content and selling skills. Most causes of friction fall into one of two categories - friction that relates directly to your solution or the problem or challenge it addresses, or friction that accompanies any significant organizational change.

Friction Related to Your Solution

This type of friction usually results from a lack of information. To keep moving through the buying process, potential buyers need the right information at the right time, and if they don't get that information, the buying process can stall. For example, a potential buyer's progression can be slowed or stopped if he or she:
  • Doesn't understand or appreciate the costs or negative ramifications of the status quo
  • Doesn't fully understand how your solution will improve the status quo
  • Perceives that the purchase of your solution will entail substantial risks
  • Doesn't have an accurate picture of the ROI that your solution will produce
Change-Related Friction

Change-related friction is usually caused by internal prospect issues, and most of those issues have little to do with the selling company or its products or services. Every prospect organization will have a unique mix of change management issues, but there are four causes of change-related friction that arise in most organizations. The buying process is likely to stall if the principal buyer:
  • Doesn't understand how the proposed change will affect the existing organizational "system" (people, processes, and technology)
  • Hasn't identified who must be involved in the decision to change
  • Believes (or other stakeholders believe) that the problem or need driving the consideration of change can be addressed using internal resources
  • Hasn't identified the issues or concerns that must be addressed to get buy-in from all necessary stakeholders
How to Reduce Friction

Both marketing and sales are responsible for reducing friction in the buying process, but marketing's share of the job has grown because of changes in buyer behavior. With business buyers delaying interactions with salespeople until later in the buying process, marketing content must be a primary tool for reducing solution-related friction. In fact, marketing content is often the only effective tool for dealing with the solution-related friction that arises in the early stages of the buying process.

Because change-related friction is unique to each prospect, sales must assume a large part of the responsibility for reducing it. Even here, however, marketing content can play an important role. For example, a white paper or ebook that describes how to build a business case for your type of solution can help your potential buyer identify all of the stakeholders who must be involved in the decision to change. A white paper or ebook can also be used to discuss why an internal "home-grown" solution isn't the best alternative for most companies.

You can't completely eliminate friction from the buying process, but the best way to speed up buying decisions is to kill as many friction gremlins as possible.

Photo Credit:  pop culture geek via Flickr cc

Sunday, May 19, 2013

Why Sales Winners Win (And What It Means for Marketers)

Last month, the RAIN Group, a respected sales training and consulting firm, published a research report titled What Sales Winners Do Differently. The report is based on a study of more than 700 individual B2B purchases in industries with complex sales. RAIN asked the buyers involved in each purchase to rank both the winners (the sellers who won the deal) and the second-place finishers based on 42 sales-related factors.

The major objectives of the study were to determine what sales winners were doing better or more frequently than the second-place finishers and what the second-place finishers need to change to increase their odds of winning.

What Sales Winners Do Differently contains many valuable insights, and I recommend that you take the time to read the entire report. I found three of the study's findings to be particularly interesting.

New Ideas and Fresh Perspectives Win

According to the buyers surveyed for the study, the most important factor that separates sales winners from second-place finishers is that the winners excel at providing potential buyers new ideas and fresh perspectives on important business issues. When potential buyers perceive that a seller is bringing something new to the table, the seller has a huge advantage. To produce this advantage, however, the insights provided by sellers must be new and fresh as well as valuable. The study found that providing insights that are useful and valuable, but not new, is not a significant factor separating sales winners from second-place finishers.

Sales Winners Excel at Communicating Value

The third most significant factor separating sales winners from second-place finishers is that sales winners do a superior job of communicating the value of their solution to potential buyers. There are three critical aspects of this task.
  • Sales winners persuasively demonstrate that their solution will produce an attractive return on investment for the potential buyer.
  • Sales winners effectively minimize the potential buyer's perception of risk.
  • Sales winners convince potential buyers that their solution is the best choice among the available options because it delivers superior overall value.
Buyers in the study identified demonstrating superior overall value as the most important thing second-place finishers need to change to increase their odds of winning.

Solution Sales Still Lives

The authors of What Sales Winners Do Differently argue that their research findings differ substantially from some of the research results described in The Challenger Sale. In particular, the RAIN study authors contend that their research supports the view that solution sales is still a vital component of sales success, although they acknowledge that solution sales is no longer sufficient for success and that the concept needs to be changed in significant ways. To support their view, the authors note that "collaborated with me" was the second most important factor separating sales winners from second-place finishers, according to the buyers they surveyed.

In my opinion, the recommendations found in What Sales Winners Do Differently and those included in The Challenger Sale are more similar than contradictory, but that's a topic for another post.

What Sales Winners Do Differently obviously deals with the factors that drive sales success, but it also has a lot to say to marketers. As discussed above, sales winners win in large part because they excel at providing prospects new and valuable insights about important business issues and because they do a superior job of communicating the value of their solutions.

Today, marketing content must perform these same functions. Because business buyers are self-educating and postponing personal interactions with salespeople, your marketing content must act as your "surrogate sales rep" early in the buying process. In many cases, your first opportunity to provide new and valuable insights and communicate how your solutions create value will be via marketing content. If your content performs these jobs well, your odds of staying in the game will be greatly improved.

Sunday, May 12, 2013

Four Key Ingredients in the Marketing/Sales Integration Recipe

In November of last year, I published a post here titled It's Time to Integrate Marketing and Sales. It's now the second most popular post at this blog, and it also created quite a stir at LinkedIn. In the Sales and Marketing Alignment group alone, the post had prompted 99 comments as of yesterday.

I was pleasantly surprised by the number of comments that supported the basic idea of integrating marketing and sales. The comments also revealed, however, that there are widely different views about what the "integration" of marketing and sales really means. To maximize the potential of integrating marketing and sales, company leaders must have a clear and detailed picture of what the end result should look like.

In my view, there are four key ingredients in the recipe for marketing and sales integration.

A Unified Go-to-Market Strategy and Plan

An integrated marketing/sales function must be based on a comprehensive go-to-market strategy and plan that has been jointly developed by marketing and sales. For integration purposes, the most important components of the go-to-market strategy/plan are:
  • The value propositions that describe how your products and/or services create value for customers
  • A definition (description) of the kinds of organizations that constitute your company's target market (an ideal customer profile)
  • Profiles (personas) of the types of individuals who make or influence the decision to purchase the kinds of products or services that your company offers
  • A description of the messages and content resources that will be used to communicate your value propositions to potential buyers
  • A description of the lead stages that your company will use to categorize prospects and the criteria you company will use to qualify prospects. This will include a definition of what constitutes a "sales-ready" lead.
Integrated Demand Generation Processes

An integrated marketing/sales function is also based on a set of demand generation processes that collectively span the entire revenue generation cycle. Some of these processes will be performed exclusively by marketing, and others exclusively by sales. However, several critical demand generation processes, such as lead nurturing and lead qualification, will require the involvement of both marketing and sales. What's important here is the recognition that marketing processes and sales processes are components of a single revenue generation system and that they are often connected and interdependent.

Integrated Technology Systems

To maximize the results from marketing/sales integration, marketers and sales professionals must be working from the same data relating to prospects and customers. Therefore, it's important to integrate the information systems and technology tools used by marketing and sales. The most significant integration will typically involve the company's marketing automation/lead management software and its customer relationship management software.

Unified Leadership and Management

A fully integrated marketing/sales function will be led by a single C-level executive. The title of this executive may be Chief Customer Officer, Chief Revenue Officer, Vice President of Sales and Marketing, or something similar. Whatever title is used, the important point is that one senior executive is responsible for leading all of the company's revenue-generating activities.

Those are my key ingredients for a full integration of marketing and sales. What would you add to or remove from this list?

I'd also like to hear your views about whether fully integrating marketing and sales is always the best course of action. What circumstances make integration critical to success, and what circumstances make another approach the best solution? Please comment to share your views.

Sunday, May 5, 2013

Marketing Metrics Must Predict as Well as Describe

In a recent post at Marketo's B2B Marketing and Sales Blog, Jon Miller identified six categories of marketing metrics to avoid. Jon's primary criticism of these metrics is that they relate very little to the financial outcomes (revenue growth and profitability) that are of the greatest interest to CEOs, CFOs, and other senior company leaders. When marketers use these kinds of metrics, it doesn't help their credibility in the C-suite.

Here are the six categories Jon identified:
  • Vanity metrics - These are "feel good" measures such as press release impressions, Facebook "Likes," and names gathered at trade shows.
  • Measuring what is easy - These are metrics that take the place of revenue and profit measures because they're easier to capture.
  • Focusing on quantity, not quality - A good example is measuring the quantity of leads generated, but not their quality.
  • Tracking activity not results - Senior company leaders care about results, not activities.
  • Efficiency instead of effectiveness - Effectiveness metrics do a better job of convincing company leaders that marketing delivers real business value.
  • Cost metrics - Jon contends that these are the worst kinds of metrics to use because they frame marketing as a cost center, rather than a revenue generator.
I agree with Jon that marketers should usually emphasize revenue and profit metrics when communicating with CEOs and CFOs. However, it's often necessary to use other types of metrics to provide a complete picture of marketing performance. This is particularly true when you need to communicate to senior company leaders why and how current marketing activities and programs will drive future revenue growth.

One limitation of financial measures is that they are lagging indicators. They measure the financial consequences of past marketing activities, but they can't measure how today's marketing activities will affect future financial performance. You can, of course, use financial projections, but unless those projections are supported by sound and convincing evidence, their accuracy and value will be questioned.

In many cases, therefore, the most meaningful marketing metrics will be non-financial measures that are leading indicators of future financial results. When marketers use these kinds of metrics, they must be prepared to demonstrate that the metrics they've selected are truly leading indicators of future financial performance. In other words, you must be able to "connect the dots" between the metrics you're using and the financial results that senior leaders care about.

For example, a company blog rarely produces revenues directly for a B2B company. Not many people will read your blog and immediately call you to make a purchase. However, a blog can be an effective tool for attracting the attention of potential buyers and generating leads for your business.

The most obvious metric to use with a blog is "number of readers," but that metric will not be compelling to senior company leaders if it's used in isolation. To make this metric meaningful, you need to demonstrate that increasing the number of blog readers will contribute to future revenue growth. More specifically, what you need to do is "connect" blog readership to revenues by providing your senior leaders answers to the following questions:
  • How many blog readers register to obtain access to other content resources?
  • How many of these identified leads are affiliated with organizations in your target market?
  • How many of these identified leads become sales-ready leads?
  • How many of the sales-ready leads become legitimate sales opportunities?
  • How many of these sales opportunities result in a closed sale?
  • How much revenue is produced by these sales?
When you answer these questions, you can link blogging to revenues and demonstrate the value of your blogging program to senior leaders.

Including non-financial leading indicators in your marketing measurement system is particularly critical if your company offers complex products and has a long revenue generation cycle. In these circumstances, many marketing programs will contribute to revenues that won't show up on the income statement for several weeks or months. Leading indicator metrics provide the mechanism for demonstrating the value of marketing programs that take time to bear fruit.