Posted by Bob Apollo on Tue, Jun 15, 2010
Is your sales and marketing aligned? If not, you are running the risk of falling behind. Sometimes the signs of a lack of alignment are obvious. Marketing spends money generating leads the sales force never follow up whilst sales people "reinvent the wheel" because they don't want to use the sales tools marketing has created. The Aberdeen Group concluded that the average sales person spends 40-60 hours a month re-creating sales-ready, customer-relevant material they think marketing could and should have produced better in the first place.
It's strange to observe that these remain such common experiences when CSO Insights’ 2010 Sales Performance Optimization survey of more than 2800 sales leaders identified “achieving better sales and marketing alignment” as one of the most important revenue-driving initiatives for the year ahead.
alignment brings benefits
The Harvard Business Review has confirmed the often dramatic benefits enjoyed by well-aligned organisations - they observe that “When Sales and Marketing work well together, companies see substantial improvement in important performance metrics: Sales cycles are shorter, market entry costs go down, and the cost of sales is lower”. Hugh Mcfarlane of Mathmarketing found much the same. He surveyed 1,400 people in 84 countries around the world, and found that well-aligned organisations grew 5.4% faster, closed 38% more proposals and lost 36% fewer customers than their inadequately-aligned rivals.
The evidence seems to be clear - when sales and marketing organisations get aligned, great things happen. So it ought to be a question of how, not if. Most of my recent work with clients has been on sales and alignment issues. I'm pleased to be able to report that we've seen some pretty dramatic benefits along the lines quoted above or better, albeit with a smaller sample size.
the foundations of effective alignment
What's the formula for success? Naturally the precise approach will vary from one company to the next, but I'm confident that there are at least 7 common factors. Sales and marketing organisations that are well-aligned:
- Have agreed "ideal prospect profiles"
- Involve sales in active market research
- Craft "messages that matter" to their prospects
- Manage an integrated revenue cycle
- Share a common language
- Establish shared metrics
- Enjoy executive commitment
download the white paper
I've encapsulated what I've learned about these factors in a new white paper, entitled "are you aligned - or falling behind?". You can download it here. It includes a 20-point questionnaire that I think you'll find illuminating. No registration is required, but I'd love to hear your comments - let me know what you think.
Posted by Bob Apollo on Fri, May 07, 2010
As we emerge from the downturn, it’s clear that we’re going to have to find new and better ways of reaching and satisfying our customers. The May 2010 edition of the McKinsey Quarterly reports that “the way businesses buy from and sell to each other is changing”.
No great surprise there. The article explores three trends that McKinsey’s analysts heard from senior sales executives. Now the nature of McKinsey’s sample is such that the results reflect the experience of some of the world’s largest and best established companies – but my own observations suggest that a growing number of successful up-and-coming organisations are already embracing their recommendations.
The “end of the road warrior”?
One prediction in particular caught my attention. Under the heading “the end of the road warrior”, McKinsey pointed out that many sales organisations have built new, lower cost channels to serve smaller customers. But siloed approaches in which low-value deals are served through a low-touch channel and high-value deals are served through a high-touch direct sales operation are proving - with good reason – to be unnecessarily rigid and increasingly ineffective.
Part of the reason – as McKinsey point out – is that many of the stakeholders and decision makers involved in the buying process have become more relaxed about where and how they get the information they need to support their decision-making.
Time for a blended approach...
For high-value products with complex and lengthy buying cycles, it’s clear that “one-size-fits-all” go-to-market models are hopelessly inadequate to serve today’s buying behaviours. But it’s equally apparent that rigid demarcation lines that force buyers down specific sales paths according to the value and perceived complexity of their transaction aren’t satisfactory either.
Surely it’s time for a blended approach – one that enables prospects to get the information they need in order to advance their buying process through the medium that they feel most comfortable with. Rigidly distinctions between inside and outside sales, or direct, indirect and web-based channels aren’t going to help. Today’s most progressive sales and marketing organisations are thinking “outside in” around how best to facilitate each prospect’s buying decision making process rather than “inside out” around how it might be most internally convenient for them to organise.
Establishing multiple touch points...
We need to establish multiple touch points that can satisfy our prospects and facilitate their buying processes. Sometimes our prospect’s needs might be best served through face-to-face interaction, at other times through a remote conversation, and at still other times through their ability to “self serve” the information they need.
Our decisions need to be guided by a deep understanding of how – given the dynamics of today’s buying environment – our prospects prefer to receive the information they need during each phase of their buying process in order to facilitate a decision to move forward with us to the next stage. And, of course, we need to be guided by an appreciation of the costs to us and the value to our prospects of each mode of each interaction. The goal must be to provide the greatest utility to our prospects in the way that makes the best use of our resources.
Aligning compensation with desired behaviour...
It’s likely that many people could contribute to a successful sale in this new blended model. And knowing - for sales people in particular – that compensation strongly influences behaviour, it’s important to think through the implications of a fair compensation model that motivates winning behaviour.
Just as the first past the post voting model seems to have failed the British electorate, simple compensation models that encourage traditional “it’s my deal” behaviours are likely to be counter-productive. Successful organisations seem to be incorporating incentives that reward collaboration and a shared contribution to sale success.
So – is the era of the road warrior really at an end?
Yes and no. We are certainly observing a decline in traditional go-it-alone, sales heroics based, road warrior behaviours – but we’re also observing great success in organisations that have successfully created a blended model in which face-to-face interaction is retained where it delivers value to both the prospect and the vendor, and is complemented by alternative methods of interaction where they better support the buying process.
Effective use of technology is clearly a critical factor – to support both remote and self-service interactions. And there’s no doubt about the attraction of reducing travel costs and avoiding the suffocating and unpredictable grip of Icelandic volcanoes. Complex, high-value sales will still depend on the power of personal interaction. But that power will be amplified and focused through the intelligent use of multiple touch points.
Posted by Bob Apollo on Thu, Dec 17, 2009
The past year has proved challenging for some sales and marketing organisations, but others have seized the opportunity to rethink their plans, out-execute their competitors and win market share. Our own observations, backed up by the latest research from the likes of McKinsey, Stanford, the HBR, CSO Insights and others, have identified 5 strategies that seem to be particularly relevant as we enter 2010.
These strategies are already enabling top-performing teams to eliminate wasted effort, increase revenue predictability, and improve the return on their sales and marketing investments. We're pleased to share them with you here, in the hope they might prove relevant to your own situation:
How do these strategies align with your own priorities for 2010? We'd love to hear from you. By the way, we've captured some of the key implications in a 15-point checklist which you can download here.
Let me know how you get along...
Posted by Bob Apollo on Mon, Oct 19, 2009
Win-loss reports can provide remarkably valuable insights into the mind of your prospects and the ways in which they make their buying decisions.
But you should never, ever, leave sales to conduct the interviews. If you've ever been on the receiving end of the results, you'll know why - but for those of you who haven't...
- When you loose, it was because your price was too high or your product lacked key functionality.
- When you win, it was all down to the strategy and skills of the salesperson.
Either way, you'll never learn what the prospect really thought, because prospects lie to sales people - they can't help it - or they reflect on their post-purchase priorities rather than the things that influenced their decision if, what and how to buy.
It's also likely that the most attention is paid to the closing stages of the sales process - rather than the often more illuminating questions of what triggered the prospect's search for a solution in the first place, what they thought they were looking for, and who they turned to for advice.
It's nigh-on inevitable that nothing new or of any value will be learned from a sales-led win/loss exercise. That's not to say, of course, that the exercise of understanding your prospect's buying process isn't critical - just that there has to be a better way.
First, conduct the win-loss analysis as a structured conversation - not a questionnaire - that encourages the prospect to recall what caused them to start searching for solutions in the first place.
Second, seek to understand how the prospect approached the problem solving process - who was involved, and who did they turn to for advice?
Third, having identified potential solutions, how did they go about getting their organisation to accept the need for change - or if the deal ended in "no decision", what were the barriers to change?
Finally, think seriously about having an external facilitator conduct the conversations. It prevents the prospect's answers being filtered by any preconceptions or vested interests, and almost always results in more truthful - and therefore useful - answers.
Posted by Bob Apollo on Mon, Jul 06, 2009
How confident are you that you truly, deeply understand who your best prospects are, what really matters to them, and how and why they choose to buy?
It's an increasingly important question, for two reasons: firstly, the latest studies confirm a trend which has been apparent for a number of years - that prospective B2B buyers are using the internet and their circle of connections to do much more research before they are ready to approach potential vendors. The balance of information power has unquestionably shifted in favour of the buyer.
Second, in the current economic climate, we're seeing B2B buyers shy away from anything that might be seen to be a potentially risky decision. If they cannot be convinced otherwise, a growing number are inclined to believe that the safest thing is to "decide to do nothing".
Faced with these two trends, vendors have to focus - on connecting with prospects who have issues they cannot afford not to deal with, and for which they have a demonstrably superior solution - and then they need to ensure that they emerge as the lowest risk of all available options - including that of simply preserving the status quo.
But careful qualification isn't enough - vendors also need to execute impeccably in facilitating the prospect's buying process - and to influence the way the prospect looks at the issue that caused them to start searching for a solution in the first place.
Persuading the prospect to think differently - to embrace a new perspective - is one of the key factors in creating a potentially winning environment. Sales people who successfully pull this off are able to achieve the much sought-after "trusted adviser" status. But timing is critical - they need to shape the prospect's view of the world before they formalise their needs and priorities.
That's where trigger-nometry is so important. The time during which a prospect evolves from being unaware or unconcerned to recognising they have an issue that they need to deal with is a critical stage in the whole process of buying.
Vendors need to understand and anticipate the trigger events that catalyse this transition. These trigger events can be external (things that happen in the market) or internal (things that happen within the prospect's organisation) but they represent the time during which the prospect's perspectives are at their most pliable.
Vendors who only get involved in deals after the prospect has crystallised their view of what they need, and what they should be looking for, start with an obvious disadvantage - whereas vendors who are visible at the time of the trigger event, or who can help create a trigger event, are in pole position to shape the buying agenda.
How can sales and marketing organisations improve their trigger-nometry? By observing the key forces that are shaping their target markets. By tracking key changes within their prospects. And by ensuring they have a relevant and potentially provocative perspective on how the prospect might respond to these issues.
Posted by Bob Apollo on Mon, Jun 22, 2009
It's clear that in the current economic climate, avoiding wasted sales and marketing effort (and budget) is a subject that is dear to many hearts, as organisations react to the challenge of trying to do more with the same or fewer resources.
Tough economic times are a powerful catalyst for selling and marketing smarter, and for doing a better job of anticipating and satisfying customer needs. Having a company-wide focus on elevating customer value and eliminating wasted effort is a great start.
With that in mind, here are my conclusions as to the 8 most common sources of wasted sales and marketing effort. Each will form the subject of a future article, when I'll share some more ideas about how to systematically eliminate them.
1: LACK OF AWARENESS: According to some, this has the potential to be the greatest waste of all, since it means that vendors may fail to be considered in deals they could have won, and prospects may fail to identify an optimal solution.
Lack of awareness cuts both ways: it results in vendors being unaware of potential prospects or their issues, and in prospects being unaware of vendors who may have the answer to their problems.
2: OVER PRODUCTION: Over-production is the result of vendors initiating more marketing and sales activities (generating large numbers of unqualified leads, for example) than their organisations are able to properly follow-up.
For anything (like an enquiry from an active prospect) that has a "best before" date, over-production can make it difficult to accurately qualify prospect activity, which has a direct impact on the third waste:
3. POOR QUALIFICATION: Accurate, timely qualification of prospects is critical to the effective use of sales and marketing resources. Like awareness, poor qualification cuts both ways: it renders vendors unable to distinguish between "good" and "bad" deals or to respond accordingly.
The effects of poor qualification are profound. Vendors many end up failing to allocate sufficient resource to otherwise winnable deals, while they waste valuable energy pursuing bad deals that should have been discarded far earlier in the sales cycle.
4: VALUELESS ACTIVITY: This waste involves any action on the part of the vendor that fails to create meaningful customer value or - just as important - to facilitate the prospect's buying process.
These valueless activities can include irrelevant marketing programmes, actions or campaigns, inappropriate sales tools, or sales actions that do nothing to advance the sales cycle. A recent study suggested that in some organisations as much as 90% of the materials produced by marketing were never taken up by either the salesforce or prospects.
5. VALUELESS FUNCTIONALITY: A regrettably common waste amongst technology or product-driven companies. It includes any functionality that prospects see no significant value in, or serves to make the vendor's offering over-complex.
Like the other wastes identified here, valueless functionality is completely avoidable - but only if product development is completely driven by a superior understanding of who their best customers are and of the most critical (and therefore valuable) issues they are trying to solve.
6: UNBALANCED RESOURCES: This waste can be observed wherever bottlenecks or over-capacity are found across different elements of the business or at different times of the business cycle. For example, certain pre-sales resources may be overloaded while others are under-utilised - or back office teams completely maxed out at month or quarter end but under-used at other times.
This waste can be significantly reduced by carefully designing business processes so that they carry a more even workload - or by amending the incentives that cause frenzied end-of-period activity followed by quiet periods.
7: WAITING: This waste can be observed whenever the actions that a vendor takes - or, just as significantly, fails to take - have the effect of slowing or delaying the prospect's buying process.
You might think that vendors would be particularly sensitive about the consequences of the waste of waiting - yet many have habits, processes or procedures that keep the prospect waiting when they would otherwise be willing to move forwards.
8: UNFULFILLED POTENTIAL: The final waste, but the one that most commonly reflects cultural failings on the part of the employer. It is caused by the failure to fully harness your workforces' potential to identify and solve problems and to drive performance improvement.
It's widely recognised that a centralised "command and control" approach is incapable to creating the organisational agility required to cope with changing market conditions - yet many employers fail to systematically engage the talents of their workforce - or the insights of their partners.
So there you have it - the 8 most common causes of waste in B2B sales and marketing. Their cumulative effect is frightening, yet adopting a "lean mindset" can start to change things quickly - and provide the platform for continuous improvement.
Subsequent articles will address each of these wastes. But if you can't wait to find out more, or would simply like to share your opinions and experience, please drop me a line to bob.apollo@inflexion-point.com.
Posted by Bob Apollo on Sat, Mar 14, 2009
There's an excellent article in ModernSelling on the latest Miller Heiman findings about the things that set top performing organisations apart.
The results speak for themselves. These organisations have proven themselves to be consistently successful in 5 key areas:
- Average account billing
- Sales force quota attainment
- Number of qualified opportunities
- Customer retention
- Forecast accuracy
But how have they achieved this? They create the foundation for success by aligning the entire organisation (sales, marketing and the rest) around a profound understanding of who their best customers are, what matters to them, and how and why they buy.
Miller Heiman's conclusions align closely with what we are observing in the marketplace.
Creating Opportunities
At the top of the funnel, best in class organisations are able to maximise opportunity value by understanding who their best prospects are, by carefully qualifying opportunities, by understanding where their value to the customer lies, and by walking away from poorly qualified deals.
This is not a static process - and is even less so now. As the report points out, ideal customer profiles are likely to change in line with changing market conditions. New criteria are likely to evolve, and organisations have to ensure that marketing isn't focusing its messages on last years' (or even last quarter's) audiences or issues.
Advancing Opportunities
Miller Heiman recommend that vendors carefully assess whether the prospect seems likely to enter in to a relationship that will provide long term value for both the buyer and seller. If not, even the current deal will prove harder to win, and less likely to be profitable.
Having a strong value perspective is important at a tactical level, as well. Our own observations suggest that at every step along the way, vendors need to be able to answer the question "how does this sales action create value for the buyer, and advance their buying process"? If you can't answer the question or measure the outcome, you need to seriously question the tactic.
A significant part of creating value for the prospect is their feeling that they are learning something to their advantage - but few like to be lectured. We all know that the best sales people do this through anecdotes - and we are strong believers in coaching the entire sales team on the power of selling through storytelling.
Closing the Sale
It's clear that decision making has become even more risk averse, and that ever more people are involved in the decision making process. It's always been important to identify and reach as many of the decision-makers as possible - but even then some may be unknown or unreachable.
We've found that two things can make a difference: first, elevating the consequences of inaction to the organisation - and using that to reach the other parties who may be affected, and second, recognising that you need to equip your champion to help secure approval for your proposal with their decision-making colleagues.
How does your current sales process compare to the best-in-class? Take our free sales process healthcheck.