Everything suggests that 2012 is going to be a very difficult year. Economies around the world are slashing growth projections, unemployment is rising and buyers are behaving in an ever more risk-averse fashion. Against this challenging climate, can you afford to be wasting a single ounce of sales or marketing effort?
Yet that is exactly what a significant number of companies appear to be doing right now. They are wasting sales and marketing resources on campaigns that are failing to fully engage their intended audience, and on pursuing opportunities that are never destined to close. And that’s without taking into account all the expensively created materials that collectively do very little to influence the prospect’s buying decision process.
You might think that your organisation is immune from this - and if you are, you are one of the truly fortunate few. But before you settle on this comfortable conclusion, I’d like to suggest that you ask a few critical questions:
1: How many apparently promising opportunities ended up going nowhere?
According to the latest data from CSO Insights, on average fewer than 50% of all forecasted deals end up in a sales win. A growing percentage of apparently well-qualified deals are ending up in a decision to “do nothing”. The amount of effort wasted on pursuing opportunities that end up going nowhere is staggering.
Now I know that the prospect’s circumstances can change. But that only explains a minority of such situations. Far too often, deals turn out to be poorly qualified in the first place, or the sales campaign was poorly executed, or key clues about the prospect’s buying behaviour were missed.
There’s usually a big gap between your top and bottom performers in this regard, and I’m not going to suggest that you can turn pig’s ears into silk handkerchiefs overnight. But you can learn from the winning habits of your top performers, and apply the lessons to create a high-performance sales process that is tuned to your particular markets.
Start by identifying your ideal customer profiles and understanding the typical motivations of the key stakeholders in the buying process. Invest in win-loss analysis to determine the patterns of success. Insist on a disciplined and consistent approach to opportunity qualification, and ensure that your sales process aligns with your prospect’s buying process.
The effort will be worth it. CSO Insights calculate that the minority of organisations that have successfully implemented these forms of dynamic sales outperform their peers by around 20% in a number of critical performance measures. Do the math. What would a 20% improvement in performance do to your chances of hitting your revenue number next year?
2: How much of your marketing activity actually influenced revenue?
If you’re still measuring the success of your marketing activity in terms of the number of leads generated, think again now. You have to focus your marketing metrics on outcomes, rather than activities. And by outcomes, I mean how many leads were accepted and actioned by sales, how many qualified opportunities ended up in the sales forecast, and how many deals and how much revenue ended up being closed as a result.
If your marketing team is focused, measured and rewarded on volume, rather than value-added, they will inevitably make some profoundly wasteful decisions. They are likely to generate “leads” that the sales force will not want to follow up, and to invest in campaigns, collateral and sales tools that end up having no material effect on buying behaviour.
Start by insisting that sales and marketing agree and document what a “sales ready lead” looks like. Make sure that both organisations understand the issues, trends and trigger events that initiate the buying decision process and feel fully comfortable addressing them. Identify the key bottlenecks in the buying decision process and created targeted tools that serve the sole purpose of helping the prospect more forwards to the next stage with your organisation.
If you can’t measure the end-to-end contribution of your marketing activities to revenue with your current CRM and/or marketing automation systems, divert funds that you would have invested in campaigns to get your underlying measurement and tracking systems right. You can’t afford to continue wasting money on campaigns that fail to influence revenue.
3: Do your sales and marketing teams share the same success measures?
“Improving sales and marketing alignment” has apparently been a top three objective for CEOs over the past several years, which makes me wonder why so many organisations still show so much room for improvement. Investing in systems can help, but focusing on goals, metrics and reward systems really concentrates attention.
How are your sales and marketing teams targeted and rewarded today? How many of the metrics reflect shared goals? Do they cause every member of the marketing team to ask themselves the same question that every member of the sales team ought to ask themself every day: “will what I am about to do contribute to driving profitable revenue?” If not, change the metrics.
How much waste could you eliminate?
Putting these initiatives in place - if they do not already exist - could have a dramatic effect in terms of eliminating waste and boosting revenues and profits, as well as encouraging every member of your sales and marketing teams to make smart decisions about where they should focus their time.
I’ll bet that they could make the difference between achieving your goals in a challenging climate or falling short. But if you haven’t started to get them underway in pretty short order you might not find out until it was too late to do anything about it.
One last suggestion
I know that every business is unique. But there are a number of winning sales and marketing behaviours that represent best practice in high-value, complex B2B sales environments - particularly where a disruptive innovation is involved. If your business fits that profile, I’d like to suggest that you invest 10 minutes in benchmarking your organisation against today's top performing B2B companies.
This online benchmark incorporates some of the latest research from - amongst others - the Harvard Business Review, the Aberdeen Group, CSO Insights and Sirius Decisions. You can take the test here and receive immediate feedback on your score.
I'd be very surprised if the exercise did not help to suggest at least one initiative that could help to further improve your sales and marketing performance - most people are identifying many more. Please let me know how you get along.