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 Tue, Apr 20, 2010
Let’s face it, in almost every b2b sales organisation, there’s far too much valuable selling time going to waste. It’s being wasted on pursuing poorly qualified opportunities that are never likely to buy from you - and even in well-qualified opportunities, it’s all too often wasted on activities which are going to have no impact on your prospect’s buying process - or your chances of winning.
Think for a moment about your sales pipeline. How many opportunities are required at the top of the funnel in order to close one sale? However well your team is performing, the end to end conversion rate is almost certainly at a level that no operations manager could accept in a manufacturing plant. And if they did, they wouldn’t be keeping their job for much longer.
The analogy is a useful one, because although I understand very well that there’s a world of difference between building a standardised product and selling a complex solution, some of the ways in which we measure manufacturing performance have useful parallels in the sales environment.
Manufacturing companies have a real focus on getting things right first time. They go out of their way to engineer scrap and rework out of the process, through measures like rigorous raw material quality standards, templates, standardised machine setups, and so on. And if a component is going to fail, they want it to be rejected early, before a great deal of value has been added to it.
It’s not so different from running a sales pipeline. We want to be working well qualified opportunities and to prevent unwinnable deals from entering the pipeline in the first place. And if we’re going to lose, we want to lose early, before a great deal of wasted effort has been invested. If only we could have the level of visibility of what’s really happening from stage to stage that the leading manufacturers have of the products that are flowing along their production lines...
Then there’s the issue of time. Plant managers watch stage times like a hawk. If work in progress is taking longer than expected to move from one stage to the next, or showing unnaturally high failure rates, they will often stop the line in order to fix the underlying problem. Imagine how much more effectively we could manage sales pipelines if we better were aware of deals that were getting “stuck” at a particular stage without moving forward...
So what can we learn from the manufacturing experience? Firstly, even the sale of complex solutions will benefit from having a well defined sales process that draws upon the winning habits of your top performers, together with the best practices that can be observed in other high-performing sales organisations. CSO Insights concluded that companies with a defined, dynamic sales process outperformed their peers by a third or more in factors like the percentage of reps making quota.
Next, we need to instrument the pipeline so that we can measure deal velocity and stage to stage conversation rates, and see how performance is affected by factors like the product, salesperson and lead source involved. We need to take steps to diagnose and deal with the root causes of poor performance. And we need to trigger an alarm when a deal falls outside desirable performance standards.
And finally, we need to use the information to systematically identify the bottlenecks and constraints that are slowing sales or restricting our win rates, set high standards, and perpetuate winning habits. You might want to start with your CRM system. Does it truly embrace and encourage best practice, and is it providing you (and your sales people) the data you need? And if not, is the problem really with the software, or how it is being used and managed? It might be time to re-engineer your sales production line.
By the way, if you are interested in other techniques that can make the leap from manufacturing to selling, you might want to learn more about the Theory of Constraints and Lean Six Sigma.
Posted by Bob Apollo on Wed, Mar 03, 2010
According to CSO Insights’ recently published annual sales performance optimisation study, the number of sales people making quota and the percentage of sales organisations achieving their revenue targets both declined faster in 2009 than at any time during the past 16 years.
Sales organisations are reporting extended sales cycles, declining win rates, and that a growing number of apparently promising opportunities are ending in “no decision”. At the same time, they observe that their prospect’s budgets appear to be shrinking, that more players are involved in the decision making process, and that their buyers are exhibiting increasingly risk-averse behaviour.
Product hype and sales pressure are losing strategies...
Faced with an increasingly pragmatic mainstream market, claiming better/faster/cheaper product capabilities isn’t going to have much of an impact – it’s become all too easy for competitors to claim “me too” functionality, and anyway, most buyers are looking for solutions they can have confidence in rather than features they might not understand.
It’s becoming equally clear that “selling and marketing harder” isn’t going to improve matters unless a dramatically different approach is taken. Buyers have become immune to hyped-up marketing claims and manipulative sales techniques. Prospects are still keen to learn, but have come to hate being pitched to. We’re all going to have to learn to sell and market smarter.
Re-architecting the sales and marketing process...
Faced with the realities of today’s markets, I’d go so far as to suggest that for many organisations nothing short of a radical re-architecting of their sales and marketing process is going to suffice – based around a profound understanding of today’s prospect priorities and buying processes.
I want to put forward three simple ideas that seem to be delivering dramatic results for the growing number of companies that have embraced them. They all depend upon an important change in mindset, since they revolve around facilitating the buying process - rather than driving the sales process.
1: Evangelise a better future...
The first step is to envision a better future for your customers and prospects, and to articulate the role that your organisation is going to play in helping them achieve it. For maximum impact, this vision needs to be crafted outside-in (around what your solutions can help your customers to accomplish) rather than inside-out (around what you do – much less compelling!).
It’s often said that there is a narrow line between vision and hallucination, but companies who prove to be powerful evangelists with a clear and compelling vision invariably emerge as thought leaders in their markets - and are able to generate a magnetic inbound attraction for potential prospects (and other key members of the BuyerSphere) who want to learn more.
So - what is your vision of a better future for your customers, and what is your role going to be in helping them achieve it? And how are you evangelising this vision to them?
2: Elevate the need for your solution...
You may have identified a prospect need – but unless the need is urgent, you are unlikely to translate this into a decision to buy. This is one of the major reasons why apparently promising opportunities end in a decision to “do nothing”. Interesting needs are often enough to get your solution considered, important needs can drive formal evaluations, but in today’s business environment only urgent needs drive a decision to buy.
Sales people who fail to distinguish between interesting, important and urgent needs invariably end up wasting their time on too many low-quality opportunities – but sales people who are unable to elevate interesting and important needs to urgent ones will end up with too many “no decisions”. Sales trainers talk of the need to identify a compelling event, but in order to create a compelling reason to buy sales people need to get the prospect to associate a significant cost penalty with maintaining the status quo.
So - how would you categorise your prospect’s typical needs as interesting, important or urgent? And what are you doing to elevate the consequences of inaction?
3: Eliminate barriers to buying...
B2B buying decisions typically evolve through a number of key phases, separated by checkpoints that determine the progress that the prospect is making in their decision making process. Most follow a sequence that looks something like this:
Status quo- Recognising the need for change
- Economic consequences identified?
- Investigating possible options
- Exploring potential solutions
- Decision criteria defined?
- Evaluating formal proposals
- Preferred vendor selected?
- Justifying selection decision
- Implementing solution
The buying process can get stuck in any of the phases – and the checkpoints usually prove to be the bottlenecks. Rather than – as conventional thinking might suggest – trying to drive the sales forward, if the vendor has articulated a compelling vision and the sales person has identified an urgent need, they would be better advised to think in terms of identifying and eliminating the barriers to buying.
When this buyer-centric perspective is applied, it’s usually possible to identify a handful of the most common sticking points, and to create revenue roadblock removing programmes to systematically address them.
So – what are the most common barriers to buying in your prospect’s decision making process? And what are you doing in order to systematically eliminate them?
You can download an extended pdf version of this article here...
Posted by Bob Apollo on Thu, Feb 04, 2010
CSO Insights recently released their annual Sales Performance Optimisation study – and the results make for sobering reading. Their global survey of more than 2,800 companies revealed dramatic declines in average sale performance.
According to CSO Insights, the percentage of reps making quota fell from 58.8% to 51.8%, and overall revenue attainment vs. plan dropped from 85.9% to 77.9%. At the same time, lead generation budgets were being frozen or reduced in more than two-thirds of the companies surveyed, training budgets fell, and investments in sales enablement technologies were curtailed.
You can't cut your way to success...
As CSO Insights point out, most firms increased sales quotas from 2008-2009 – and then tried to “cut their way to success” by reducing budgets – a strategy that has manifestly failed. 85% of the firms surveyed have now raised sales quotas again for 2010, without significantly changing their behaviour. You’ve got to wonder whether they are about to have a Groundhog Day experience.
Albert Einstein defined insanity as “doing the same thing over and over again and expecting different results”. Now, I’m not arguing that organisations thoughtlessly throw money at the problem – but I believe the only way that companies are going to dig themselves out of this hole is to get smart and have a ground-up rethink of the sales and marketing process from the buyer’s perspective and eliminate anything that isn’t creating customer value.
Eliminating wasted effort...
It’s not as if there isn’t a lot of well-meaning but wasted effort that could be redirected. The American Marketing Association, in a series of studies, concluded that between 80-90% of all sales collateral played no useful role in the buying process. Frequent failures to get marketing and sales organisations to agree what constitutes a “sales ready lead” cause similarly dramatic wastes of money and effort. Investing huge amounts of effort on deals that at the end of the day decide to do nothing is a third example. You can probably think of many others.
I’m going to suggest that it’s time to take an evidence-based approach that clearly defines the characteristics of your most valuable prospects, identifies their most pressing challenges and aligns them with your most powerful capabilities. But perhaps most important, it’s time to align the sales and marketing process around a deep and profound understanding of how and why your potential customers choose to buy.
Step into your prospects' shoes...
How would they describe their problems or challenges? What triggers their search for a solution? Who do they trust when they are looking for advice? What are the key steps they follow in their buying journey, how can you determine what stage they have reached, and what can you do to persuade them to move forward with you? Equally important, what might be holding them back, and what can you do to remove any barriers that might lie in their way?
Armed with these insights, you can focus your efforts on connecting with the right sort of prospects, and on doing the things that are most valuable to them in their buying process. You can concentrate on the issues that really matter to them, and be in a better position to qualify out prospects that are not right for you (or you for them) far earlier in the cycle, and redirect your efforts towards more profitable activity.
Have intelligent conversations...
You can also equip your sales people to have intelligent conversations with informed prospects, to ask diagnostic questions that reveal the true cause of the prospect’s pain rather than simply treating the symptoms, and to help the prospect solve problems, simplify complexity and manage change.
Technology can help - there are a growing number of promising collaboration, social media, networking and new generation CRM solutions that can help facilitate your prospects buying processes. Training can help to equip your sales people to have intelligent, provocative conversations that stimulate prospects to take a fresh perspective. An integrated approach to campaigns, media and sales can also contribute.
Change your perspective...
But first, you have to get the mindset right. It’s not about selling harder, or trying to do more with less without changing what you do. It’s about making it easier for your best prospects to buy from you. If you can get that right, you can break free from the depressing decline in sales productivity. Because you can be sure that your less-smart, less-agile competitors won’t have grasped the seismic change that is happening around them.