Posted by Bob Apollo on Thu, Jul 15, 2010
It’s an old story, but one that I still hear far too often. Salespeople complaining that marketing never generates any decent leads. Marketing getting frustrated that sales never follows up on the leads they have created. And, amusing though the idea might at first appear, we can’t excuse it by claiming that “Sales is from Mars and Marketing is from Venus”.
I should probably have put the word “leads” in quote marks. It’s not unusual for part of the problem to stem from a failure to agree what a sales ready lead looks like, or to get confused between an enquiry, a lead and an opportunity, or even (bizarre as it may seem) to regard those three categories as being in some way interchangeable.
Creating a contract between sales and marketing
But the real root cause predates even the enquiry-lead-opportunity definition problem: it arises from the failure to agree and define what an “ideal prospect” looks like. Without a consensus about the characteristics of a well-qualified prospect, marketing are likely to continue investing resources targeting people who are never likely to buy - and sales will be unable to sign up to a contract with marketing that basically says “find opportunities that look like this, and we will commit to pursue them”.
What does an ideal prospect look like?
I’ve conducted a number of ideal prospect profile exercises with clients - I have come to regard them as the essential foundation for making smart sales and marketing investment decisions - and here’s what I’ve learned:
- Demographics alone aren’t enough. The classic dimensions of market segmentation - industry, geography, company size, etc., form the foundation of an ideal prospect profile, but they are by themselves insufficient
- The devil is in the detail. When you evaluate recent sales successes, you can usually uncover more subtle characteristics that have a more important predictive effect. Things like existing systems in use often have a profound impact on the chances of sales success
- Don’t ignore behavioural factors. Years ago, when I was working at HP, we uncovered something that had far greater impact than any demographic factor: companies that were highly decentralised (like HP) tended to prefer to buy from HP. Companies that were highly centralised (like IBM was at the time) strongly preferred to buy from IBM
- Look for patterns. A more recent predictive factor has emerged from my work with SaaS based offerings: for reasons that are fairly simple to understand, companies that have already signed up for one SaaS based solution are far more likely to buy additional ones. The pioneering work has already been done
A few simple recommendations...
Here’s what I’d recommend to any organisation that wants to leverage the concept of “ideal prospect profiles” to dramatically increase sales and marketing effectiveness:
- Establish ideal prospect profiles for each of your significant product or service offerings as a collaborative exercise between sales and marketing. Be sure to combine demographic, environmental and behavioural characteristics
- Make a determined effort to progressively enhance your target account prospecting database by capturing the characteristics of your “ideal prospects”. Include this learning in the information you collect in web form submissions, etc.
- Help prospects to self-qualify by explaining how your solution is particularly relevant to organisations that exhibit the characteristics of your “ideal prospect profile”. Ensure that your case studies and reference materials support this
- Encourage sales and marketing to enter into a contract based on the commonly agreed characteristics of an “ideal prospect” that ensures that if marketing uncovers a suitable candidate, sales commits to follow them up
- Implement a continuous qualification process that helps marketing and sales to judge - in an evidence based way - just how good a prospect any given enquiry, lead or opportunity is likely to be
Trust me, it will be worth the effort...
Get this right - and continue to refine it - and from all my observations, you’ll spend your marketing money far more wisely and apply your sales resources far more effectively. And both departments will enjoy working together.
Posted by Bob Apollo on Sat, Jun 05, 2010
I came across Simon Sinek's work through a blog post by Augie Ray of Forrester. Sinek is the author of Start With Why. In the following video, he explains why great leaders, and great companies, don't start with what they do, but with why they do it.
To take just one convincing example, he observes that (unlike so many of our current generation of politicians) Martin Luther King won his followers over not by having a plan, but by having a dream.
Sinek goes on to suggest, in a powerful and compelling way, that great organisations succeed by doing business and attracting followers (buyers, employees, influencers, etc.) who believe what they believe.
Invest 18 minutes in watching this video, and then reflect on whether, at the heart of how you communicate, you are leading with "why" - or with what... and whether you are driven by a cause, or a belief, that you and your organisation are passionate about.
Posted by Bob Apollo on Wed, Apr 28, 2010
Your customers, and your prospects, have opinions - and they are fascinated by the opinions of their peer groups and others they have come to trust for advice. They no longer have to rely simply upon the views of people and organisations they already know – our networked world has made it easy for them to seek and share opinions on a global scale.
The term “word of mouth” marketing is something of a quaint misnomer. One-to-one verbal communication is only one of its' manifestations. The phrase is now commonly (and, I think, appropriately) used to describe customer-to-customer communications across a variety of media that share a common characteristic – the participants have no direct personal economic interest in the information they are exchanging, simply a desire to share what they have learned for the common good.
Time to shove “push marketing” to one side...
As the April 2010 issue of the McKinsey Quarterly points out, customers have become increasingly sceptical about traditional “push” marketing techniques and prefer to make their purchasing decisions based on information that is independently sourced, rather than what the vendor or their sales person tells them. Whilst the McKinsey article has a primarily B2C perspective, the principles are equally - perhaps even more - relevant to the B2C environment.
Word-of-mouth particularly critical in new markets...
One conclusion, in particular, really resonates - and the implications could be profound for B2B marketers. McKinsey identified a significant difference in the power of word-of-mouth between mature and new markets. Although advertising and previous product usage continued to be the primary drivers of consideration in mature markets, word-of-mouth was the most important factor at every stage of consideration in new markets.
Let’s consider the implications for a moment – if you are involved in a new, innovative or disruptive technology, or if you are competing in new markets where you have to create, clarify or elevate your prospect’s needs before you can satisfy them, the quality of the word-of-mouth that surrounds your company and your products and services may now be the biggest single influence on whether you get considered, whether you get evaluated, and whether you get chosen.
Amplifying word-of-mouth equity...
And note that it’s the quality of the word-of-mouth, more than the quantity that affects the power of the communication. McKinsey’s research showed that a high-impact recommendation from a trusted source conveying a relevant message is up to 50 times more likely to trigger a purchase than a low-impact recommendation.
The authors go on to identify three components of word-of-mouth equity: what is being said, who is saying it, and where they are saying it. Let’s consider each of these briefly:
- What is being said is the foundation of effective word-of-mouth marketing: we need to find and focus on the elements that most influence buying decisions
- Next comes who is saying it: as McKinsey point out, the receiver must trust the sender and believe that they have relevant experience for their comments to be valid
- Finally, where they are saying it, because the environment within which the comments are being circulated has a considerable impact on the power of the messages
Applying this to the B2B environment...
We can clearly learn from these B2C experiences and best practices. So how do they change the agenda for those of us who are focused on the B2B environment? Here’s how I’d recommend you might amplify your word-of-mouth:
- Be clear about your prospect’s primary considerations when they start searching for solutions. Conversations with both your installed base and recent new customers – and specifically those in your “sweet spot” – can help. What were the things that were most important to them as they researched the market? What were the trigger events that caused them to start looking?
- Identify the trusted sources that your current customers and prospects rely on for insight and advice. Are there particular organisations or individuals that stand out? How important are analysts, journalists, trade bodies, or their other existing suppliers?
- What about their networks – formal and informal, online and offline? Are they members of relevant trade or professional organisations? How has their network landscape changed, and how do they expect it might continue to change?
You’ll find that you customers and prospects appreciate being asked. They might well be intrigued as to why you are asking. And I can guarantee that you will lean much that is of value.
Why this is worth it...
There’s a key reason to believe that mastering word-of-mouth can establish compelling competitive advantage: the ability for any vendor to outperform their peers in traditional marketing is limited, because the gains from superior performance in a broadly-mastered discipline are slim. But with so few companies truly mastering word-of-mouth marketing, the opportunities to dramatically outperform your competitors by mastering this new discipline are truly profound.
Are you deliberately factoring word-of-mouth into your B2B marketing programmes? I’d welcome the chance to learn from your experiences – and I’d be happy to share what I’ve learned. You can contact me here.
Posted by Bob Apollo on Mon, Apr 26, 2010
According to the latest research from Gartner, marketing spend amongst high-tech and technology providers is on the rise again in 2010 – after a year in which more than half of these vendors cut their marketing budgets.
But the resurrection of high-tech marketing budgets doesn’t, it seems, mark a return to a pre- recession marketing mix. According to Gartner research vice president Laura McLellan, “Marketing has to continue to look at being more efficient and cost effective” and she noted that many marketing groups were “searching for better ways to measure and show the value of marketing”.
The "new normal"
Well, hurrah to that. But what is this likely to mean in practice? Gartner predicted a “new normal” in which IT buyers rethink their spending approach and identified key priorities for many IT vendors in 2010 as sales programs to support both the direct and indirect sales forces together with increased investment in positioning and external communications.
These targeted investments are certainly consistent with some of the best practice I’ve been observing in high-tech companies that are managing to ride the rebound, rebuild their pipelines and get their sales and marketing engines running effectively again.
They reflect the two essential initiatives that we’ve been working with clients on: the clarity of their market focus and the effectiveness of their sales process.
Clarity of market focus
Clarity of market focus requires that organisations define their ideal customer profiles as well as understanding the hierarchy of needs that drive buying behaviour – but perhaps most importantly it requires a deep understanding of the sphere of influence that surrounds these prospects. Much of the increased investment in positioning and external communications will, I predict, be focused on reaching out to and through this BuyerSphere.
Effectiveness of the sales process
It’s no longer accurate (or fashionable) to describe sales being from Mars and marketing from Venus. The traditional tensions between the two functions are completely unproductive in the “new normal”, and it’s striking how organisations that have successfully aligned sales and marketing around a common focus on the customer are doing better by every important measure of performance. Gartner’s recommended focus on programs to support the sales process (and thereby facilitate the buying process) is a reflection of the growing trend towards collaborative behaviour.
Where’s your marketing money going in 2010?
How do your marketing spend priorities align with Gartner’s findings? Have you identified a “new normal” in the buying behaviours of your target markets? And have your sales and marketing teams learned to play nicely together?
Posted by Bob Apollo on Thu, Apr 22, 2010
Are you involved in selling high-value, complex products or services to a business audience? I recently suggested that most of your sales efforts are likely to be wasted - you can read the article here. But there’s no reason to let marketing off the hook.
John Wanamaker, the US department store pioneer, is often quoted as saying “Half the money I spend on advertising is wasted; the trouble is I don't know which half”. And naturally the problem is not just associated with advertising – the challenge affects every form of marketing.
Of course, today’s marketing media offer the promise of much better targeting and near-instant feedback on who you have reached and how they have responded. But technology by itself isn’t enough to eliminate the waste that is still associated with many marketing investments even today.
Marshall McLuhan believed that the medium was the message, and there’s no doubt that the media through which any message is delivered affects its form and impact - probably far more than he anticipated when he coined the phrase back in 1964.
But it’s still critically important to get the message right as well as delivering it effectively – and that involves mastering the basics of a compelling value proposition that addresses the urgent needs of an ideal customer profile. Misalign any of these three elements, and you’ll still end up wasting a great deal of your marketing effort.
And although the feedback new media provides can help you refine your targeting, it’s no excuse for laziness and there remains no substitute for creating a great brief from the get-go. So let’s spend a moment considering each of these three components.
Addressing urgent needs
Until there is a need, there can be no solution. And without a solution, there can be no sale. But there is an important hierarchy of needs, and whilst interesting needs might get you considered, and important needs might get you evaluated, only urgent needs will get you bought.
Does this imply that you should only focus on urgent needs in your campaign? Well, no – but if you choose to address interesting or important needs as well (and there’s often a good reason to, because of some of the subtleties of the human decision making process), to avoid wasted effort you had better make sure that you have created collateral and sales tools that can help these “opportunities with potential” to acknowledge that they have urgent needs.
Ideal customer profile
It’s no longer enough to rely on demographics alone (size, geography, industry, etc.) to define your target audience. Today’s best B2B marketers are also looking out for the trigger events that spark buying processes, and identifying with the behaviours and motivations of their likely champions within prospect organisations – as well as mapping the spheres of influence that inform prospect's decision making.
To avoid wasted effort, it's worth thoughtfully crafting buyer profiles (or “persona”) for these potential champions as well as the organisations they work for - and investing in influencing the people and organisations these champions are likely to turn to for advice as well as the prospects themselves.
Compelling Value Proposition
But even with intelligent targeting of needs and audience, much effort still gets wasted in the absence of a compelling value proposition. In addition to targeting your most valuable prospects, your value proposition must align your most powerful capabilities to their most urgent needs, differentiate your offering from the competition, elevate the need to act, mitigate the risk of change, provide proof to back up your claims, and make a well-chosen offer and call to action. If any of these elements are weak or missing, your value proposition is diminished – and much of your effort wasted.
Marketing is a Process, Not an Event
My final recommendation is that you consider marketing as a process, not an event. When you are selling complex, high-value offerings to a B2B audience, you can’t hope to cram all your messages into one communication. But if you haven’t anticipated what the whole story is, or where, how and when it is going to play out, your good work will still be wasted. John Wanamaker would surely not approve...
By the way, we've recently published a 2-page checklist that captures some of the lesson's we've learned from today's most scalable businesses - you can download it here.
Posted by Bob Apollo on Fri, Jan 22, 2010
Gartner have just revealed the results of their annual survey of CIO priorities. It makes fascinating reading when compared to last year’s report. IT spending for the coming year will increase by an average of 1.3% - but that is compared to a dramatic decline of 8.1% in 2009. 2010 IT budgets are back to the levels of 2005 – half a decade’s growth in budget has been wiped out.
From managing resources to managing results...
According to Mark McDonald, Gartner Group VP and head of research for Gartner Executive programs, the role of IT is changing from merely managing resources to taking responsibility for managing results, while the technology focus is shifting from heavy owner-operated solutions to “lighter weight” hosted services.
Business process improvement remains the #1 business priority, followed by reducing costs and improving workforce effectiveness (promoted from last year’s #4 to #3). But the real change in priorities comes on the technology side. Last year, enterprise CRM was the #2 technology priority. In 2010, it does not even make the top 10.
Reshaping the role of IT...
Gartner anticipates that CIOs will change their focus from driving cost-based efficiencies to achieving productivity gains, using collaborative and innovative solutions that leverage services-based and social media technologies, including virtualisation, cloud computing and web 2.0. They see them providing the platform for information and process-intensive solutions that will ultimately reshape the role of IT.
Salesforce.com is one of the more obvious beneficiaries of this change - but there are many others. I suspect that few of us are going to bemoan the passing of traditional “big iron” IT projects that inevitably cost too much, take too long and deliver too little. But what benefits might a more agile, adaptable IT infrastructure bring – and what do we need to do to position ourselves to exploit the potential for improving sales and marketing performance?
From automation to enablement...
I suggest that a great deal of the answer lies in what processes we choose to IT-enable. We need to stop thinking about automating often badly-aligned “sales” and “marketing” processes and seize the opportunity to facilitate our prospect’s buying processes and embrace the dramatic changes that the net and web 2.0 have already made to buyer behaviour.
If we are to take advantage, we’re going to have to do better at connecting with our most valuable prospects and customers, identifying their most pressing problems and understanding how and why they choose to buy. If we can leverage the dramatic change in technology to change how we think about the role of sales and marketing, we’ll create the scope for achieving dramatic gains.
But if all we do is to apply this wave of innovative technology to traditional approaches to the sales and marketing process, we’ll probably still end up spending less money, but on doing the wrong things...