There’s no shortage of bad news - the Eurozone crisis, global uncertainty in financial markets, declining customer confidence and risk-averse buying behaviour on the part of our potential prospects. We would be foolish to expect a dramatic upturn any time soon. So how should we respond? I wanted (with his permission) to share Hugh Macfarlane’s thoughts on the matter - and to wholeheartedly endorse his recommendations.
As Hugh - founder of Mathmarketing and author of "The Leaky Funnel" (one of my must read books) points out, 2012 is at best a period of further uncertainty. So what should we be doing as Sales and Marketing leaders? Here are the six strategies that Hugh thinks you might want to contemplate over the Christmas break.
Massively shift costs out of your combined Sales and Marketing engine. Businesses who still rely on Sales to generate their own opportunities are retaining costs that may prove a luxury during the next decade. Considering investing now to change your processes to have Marketing generate a higher proportion of the opportunities which close. This means Marketing needs to be on the hook for closure rates, not leads. In our alignment study in 2007 we found the benchmark to be 24% of revenue from marketing-generated leads, but perhaps we need to set our sights on a much greater proportion in the future. This means you need process redesign, that you need Sales and Marketing to buy in to those new processes, and you need to do it fast.
Aggressively focus Sales’ efforts onto only those deals which can close. Sales people love relationships, are eternally optimistic, and they hang on to opportunities long after they are dead. Consider building better indicators into your funnel management systems and processes, and use those indicators to prise the sticky fingers of optimistic sales people off deals that won’t close soon, and hand them back to Marketing to nurture. Most businesses buy into the need for marketing automation as a nurturing tactic, but few are deliberately leaking their stalled opportunities out of their funnel and handing them off to well-built automated marketing programs which balance low touch with high scrutiny. We need the low touch for cost management but we also need the high scrutiny to know which leads are again ripe for handover back to the sales force.
Increase visibility into your engine, and use it to stop low-yield programs. Consider recoding your opportunity management systems so that you can record name source, trigger campaign (the campaign(s) which brought the opportunity to the fore), BDM, lag (time to progress) and leakage (failure to progress) for each stage in the buyers’ journey. These insights will help you to cancel campaigns that yield leads that don’t close (e.g. trade shows), and opportunities that are stalled. An opportunity that has been in your funnel for a long time is not necessarily stalled; consider an opportunity that took an interminable long time in the early stages but somehow managed to progress through the last two fairly quickly – that’s not necessarily the one to rip out of your funnel. Visibility needs to be precise.
Forget about branding. It doesn’t matter what the market thinks about you, if they don’t. Consider massively reweighting your efforts from branding towards demand generation. Focus on reasons why businesses should be changing what they do at all, rather than the merits of your approach over others. Leave that to the sales people and focus marketing’s efforts towards getting your sales people in front of more prospects to have that conversation.
Churn low performers and lift the skills of others. You already know that the difference between a high performer and a low one is not a blip but a chasm, so lose the low performers and invest heavily in training for those you plan to keep. This is as true for Marketing professionals as it is for Sales. In uncertain times throwing greater salary packages around won’t increase retention of your stars, but continuous investment in professional growth will.
Outsource marketing. Smaller companies already do this, but usually because they do not have the time or skills to build great marketers, nor the environment to keep them entertained. Larger firms may consider retaining only their domain experts (market or product experts) and outsourcing the specialist area of demand generation to experts who can do this better, and can handle the lumpiness of that activity.
So there you have it: six sobering recommendations. Putting them into practice might require that you face up to some brutal realities, and challenge established processes - but what are the consequences of hoping that “business as usual” will somehow let you muddle through?
There's an inevitable consequence: Come the end of this, the strong companies will emerge stronger, and the weak will have gone to the wall. The choices you make are likely to determine the outcome for your own organisation.
For more of Hugh’s incisive thinking on B2B sales and marketing issues, follow him on twitter or visit www.mathmarketing.com. You might also like to take 10 minutes to benchmark your current sales and marketing practices against today's best in class. The results could help you to refine your priorities for 2012.