Aug 052010
 
  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Pinterest
  • Add to favorites
  • Email
  • RSS

A slight detour for today’s post.  Let’s pay a brief visit to the land of B2C retail fitness, to see if any insights apply to B2B sales and marketing.

One regular “client” of my consulting practice is the Pilates and personal training business my wife Heather and I have owned for the past 3.5 years. I have no formal training in Pilates or personal training, and to be honest, until this year, my physique more closely resembled the guy in the classic “BEFORE” photo than the slimmer “AFTER” version.  For this reason and others, I’ve typically worked more behind the scenes in that business, handling finance, operations, and marketing, supporting our staff and Heather as they support their clients.

Heather wears several hats too, including the very important Head of Sales hat. This is a challenging and rewarding job for her. She helps people make and manage investments in their health. According to HealthyPeople.gov, a service of the U.S. Dept. of Health and Human Services, only about 23 percent of adults in the United States report regular physical activity for 20 minutes or longer 3 or more days per week. Heather’s trying to engage the subset of that population who:

  • live close enough to our studio in Seattle to make regular ongoing visits with their trainer
  • are able to invest in private instruction (we don’t offer group classes)
  • are willing to pay for an elective health service not covered or subsidized by insurance
  • are physically able to exercise
  • have the time, or are able to make the time, to attend training sessions
  • aren’t already working with a trainer at another facility
  • value our services, people, facilities, and the way we do business

So yes, Heather has a challenging and rewarding job.  Her business is highly relationship-driven. I know,  I  know, everyone’s business is relationship-driven, but hers really is. She’s learned, and taught me, a ton about how these relationships get started and grow. And as good as she has become at listening to prospects, educating them, and building their trust, the old adage is as true for her as it is for any sales person: you can’t win ‘em all. For any number of reasons, some within and some beyond her control, not everyone she meets will become a client.  But every potential client, whether she meets them or not, will ultimately make some kind of decision, conscious or otherwise.  That decision may be about whether to become a client, or it may be about whether to visit the website, pick up the phone, or ask a current or past client about their experience.  And this brings us back to the theme of this post: every lead converts.

To explore what I mean by this, let’s apply the sentence in the broadest sense possible.

For simplicity, let’s define “every lead” as every person that engages Heather’s business. Not just the people who call her to ask about studio services or rates, or come in for an introductory session, or consider a membership package, but everyone.  Any person who ever:

  • walks by the studio and takes a flyer from the box outside
  • drives by and notices nothing more than the window graphics or other branding elements
  • visits the studio’s web site
  • visits a third party review site (e.g. Yelp)
  • observes or engages in a social media conversation about the business
  • meets a current or previous client at a business function, or a kids’ soccer game
  • meets a current or previous prospect at a [insert business or social event here]

Simplified Conversion Model

And now let’s define “convert” just as broadly. Not just the conversion of qualified prospects into clients, or of leads into qualified prospects, or even of traffic (foot, phone, or web) into leads. Let’s define conversion as any change in a person’s opinion of her business — no matter how strong or subtle, how temporary or permanent, or how grounded in fact or fiction — based on currently available information available.

And now, let’s go one step further and give a B2B-sounding name to this entire cycle of people gathering information and developing their opinions. Let’s call it: the considered purchase process.

Back here in the B2B world, we are trained to be efficient, mechanical, and sometimes even a bit mercenary about demand generation. And the military-industrial language we use to describe our trade – e.g., driving conversion, filling the pipeline, growing revenue (exponentially), launching multi-channel integrated campaigns, etc. – reflects the intense expectations of management that we take the beach deliver results.

But as we focus our energy on the relative few who ultimately decide to buy, it’s helpful to remember that every person’s opinion of our company changes as they interact with us. We may be leaving money or value on the table when we ignore those who don’t take our prescribed next step.  Or worse, we may be creating headwinds for future sales efforts by handling these people in a careless way. Every lead converts, in either a good way or a not-good way. And unless you’re selling to a market of infinite size where no one ever bothers to share their impressions of your business, each one of those conversions matters.

Doing the things that get more leads to favorably convert, more of the time, helps us build healthier pipelines and more predictable revenue growth.

May 192010
 
  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Pinterest
  • Add to favorites
  • Email
  • RSS

Early in my career, I worked in sales at Concur Technologies (now called simply “Concur“) and had the opportunity to learn from some great sales leaders. I specifically remember a 1/2 day training session led by Tim Fitzgerald, who was then VP of North American Sales at Concur.

With all due respect to Miller Heiman, Dale Carnegie, and others of their ilk, I have to say I received more practical, directly applicable knowledge out of those 4 hours with Tim than I learned in any seminar course I ever attended.

Over the span of my career, as I’ve participated in numerous sales presentations from both the buy and sell sides, I’ve often been reminded about how there’s no substitute for the fundamentals. And in sales, like in sports, fundamentals are unfortunately most noticeable when they are not being followed.

I was reminded of this topic today when I answered this question on Focus.com: “What are your tips for the optimal sales presentation?”  Here is the answer I gave, which is perhaps 5% drawn from the original Fitzgerald course content, and 100% confirmed by my experiences over the ensuing 13 years.

1. Arrive 20-30 minutes early. Use the time to overcome the inevitable conference room / projector / IT issues. And if none of those issue exist, get a pre-brief from your vendor-side contact on how to best run the meeting. And if you don’t get time with your contact, use the time to mentally prepare / relax / meditate before you enter the ring. In sales, most of your money is made by executing well at key moments, like presentations. Give yourself the opportunity to execute well.

2. Manage the clock. Re-confirm when the meeting starts that you still have the time allotted with all the key people that you thought you did. 5 out of 10 times, a key decision maker / influencer has a “hard stop” 15-30 minutes earlier than you expected. If you can accomplish your objectives in this compressed window of time, you can be more productive in your next meeting (assuming you get another one).

3. Manage your crew. Make sure anyone who may be supporting you in the meeting knows exactly what they are there to do/say and what they should NOT do/say. If anyone on your team is dialing into the meeting, they should:

(a) be in a quiet place

(b) be using a good phone

(c) not be distracted by anything else, and

(d) not have any chat windows or other screen pops come up during the meeting (Web conference scenario only).

I had a hands-down market-leading software vendor selling to my company a couple of years ago. The sales person was unfortunately not adept at managing his resources, and what should have been an easy win for him became a drawn out affair because his demo failed and his team was not prepared for the meeting. When our CEO came into the meeting, the disorganization was obvious, and there was no opportunity for the sales rep to show why his company was the clear market leader. Instead, a lot of doubt was created that I, as the vendor advocate, had to manage through over the next several weeks.

These are just a few of the little things that, if left unmanaged, can completely derail a sales presentation, and detract from the actual business of selling.

Jan 162010
 
  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Pinterest
  • Add to favorites
  • Email
  • RSS

Over the past year, I’ve had the good fortune to speak with 80+ B2B marketers at leading U.S. companies. I’ve taken extensive notes during each of these discussions and have learned some interesting things. Here’s a few highlights:

1) In nearly all of those conversations, the topic of marketing automation and lead nurturing has come up.

2) About 50% of the marketers I’ve spoken with have already purchased a marketing automation solution. (This figure is not a proxy for overall market adoption of these solutions. The population I spoke with is generally in the “early adopter” category.)

3) Most of these marketers are, by their own admission, using only a portion of the robust capabilities available in these solutions. Essentially, these companies are using MA software to automate email blasts to current customers and prospects.

4) None of the marketers I’ve spoken to have implemented the lead scoring functionality available in these solutions. The reasons for this are several. Some have found that they have not identified or hired the right person to drive the lead scoring effort, because a specific skill set is required to do scoring right. Others have cited challenges in obtaining buy-in from the sales team – whose support and collaboration is essential to building an effective lead scoring model. And still others have said “sales is going to call all the leads anyway, so we don’t see a need to score them.”

5) Despite the limited scope of their existing deployments, all the marketers I’ve spoken to are still very committed to the category of marketing automation. They are just in first gear at the moment and planning their ramp-up strategies.

As a result of these conversations, I’ve been working on a visual aide to succinctly explain why I believe it’s critical that marketers and sales leaders commit to the lead scoring process as a part of any marketing automation project. I offer it up here as a contribution to the conversation.

Some explanatory “companion text” follows below the graphic.

 

Why We Nurture Leads

Companion Text:

  • The blue bars represent the universe of leads acquired through any marketing effort. Let’s put the number at 1000 leads. The red/pink shaded area represents the effort the Sales team will make trying to move those leads into the sales funnel.
  • The Y-axis represents a hypothetical lead score range of 1 to 100 (for what it’s worth, it’s not considered best practice to use a 100-point scale in lead scoring, but I’m simplifying here for the benefit of newcomers to marketing automation).
  • In the chart on the left, we look at the Lead Score (sales-readiness) of this 1000-lead universe in the timescale of one month after their lead capture date. In the chart on the right, we look at the Lead Score of the same population 9 months after their lead capture date.
  • According to Brian Carroll, author of Lead Generation for the Complex Sale, 70% of buyers you attract to your web site will eventually buy from someone. However, most of them are not ready to engage at the moment they appear in your CRM system (you are using a CRM system, right?). An important premise of Carroll’s argument is that the sales-readiness of these leads will increase, whether or not your company nurtures them. But only by nurturing do we have the opportunity to shape the preference of the buyers in that population of leads. And only by scoring do we have the opportunity to measure the relative levels of sales-readiness of one lead versus another.
  • But what about the argument that “sales calls all the leads, so why should we score them?” In my experience, Sales will always make an effort to call all of the leads. But it sometimes is worth repeating to ourselves that Sales is ultimately hired to one thing: sell. Not calling all of the leads is actually, really, truthfully, at the end of the day, a “venial sin” in the sales department. Not closing business is a “mortal sin.” [Or for those who prefer a more secular interpretation. Not calling all the leads will merely put the sales manager on his/her boss’ “Hurt Me” list. Not closing deals will put him/her on the “Kill Me” list.] So marketers should assume that the Sales team’s follow-up effort will result in a single touch (call, email, or voice mail) against 70% of the leads at best. Because when given a choice between calling a lead of unknown quality, and calling a prospect in the middle or bottom of the sales funnel, any successful sales person is going to do the logical thing and focus on closing business. [It’s also worth mentioning that another habit of successful sales people is to allocate 20% of their time to prospecting / pipeline development. But even the aggregate effect of that time allocation, if it’s happening across the sales team, will typically not be as effective in keeping leads warm, and certainly not as measurable, as a well-executed marketing automation program.]
  • The 1-month timescale (the chart on the left) illustrates the inefficiency of the “call ’em all” approach to lead development. Lots of calls are made and emails sent to prospects who are not yet ready to buy. The non-responsiveness of these pre-mature buyers is a contributing factor to the oft-heard judgement of the sales manager: “these leads are s#!+. We need the good leads!”
  • The 9-month timescale (the chart on the right) illustrates the benefit of a well-integrated lead nurturing program. If marketing and sales work together to define a solid lead scoring model, the effect is that sales will be spending more of their time speaking to more qualified buyers.
  • An ancillary (but very significant) benefit of this approach is that over time, marketing can actually spend less money buying impressions, clicks, and leads. This is because, over time, patterns emerge in the data to show what fish are biting, where they’re swimming, and how you can hook them.
  • Where should all that money go that you save on demand generation? Here’s a few ideas:

Six things you can do with the money you save implementing marketing automation:

  1. Tell your  CFO / CEO to hire more sales people so your company can drive more revenue. [Some marketers may accuse me of heresy for daring to suggest that they offer up any portion of the marketing budget to hire more sales people. I would just reply that the goal is to make money. And good stewardship of the marketing budget means maximizing the efficiency of spend not maximizing spend.]
  2. Spend more money on the lead sources you (now) know are *really* working.
  3. Invest in thought leadership driven content creation (webinars, white papers, social media contributions).
  4. Conduct research on your current, live, in-market prospects to better understand what makes them buy.
  5. Send yourself and/or your team to a MarketingSherpa or SiriusDecisions conference.
  6. Negotiate a raise for yourself (preferably bundled with a promotion).  :)