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Everything We Thought We Knew about B-to-B is Wrong Video

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In December, I had the opportunity to be the Keynote speaker at the Bowery Capital CMO Summit in NYC.  The event featured a number of high profile CMO’s speaking with an audience of mostly early stage startups (under 20 employees).

My presentation was based on the recent Forbes blog post Everything We Thought We Knew about B-to-B Marketing in Wrong.  The audience also included some local media, a reporter from CMO.com wrote a summary of the speech.

 

Why Sales Might Have a Hard Time With The Buyer Journey

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My initiation into the world of sales happened at the height of the “Glen Garry Glen Ross” days.  It was the time of “blue suits” and “fast talkers”, and not a piece of sales automation or tracking technology anywhere to be found.

We’d roam our territories searching for conversations hoping it would lead to something more.  At the end of the day, we’d return to the office and put our “numbers” up on the board; # of conversations, # of leads, and closed deals ($).  The white board was our “sales dashboard” highlighting performance against goals for the month, and year-to-date.  Our view, and control over our success, was determined day-to-day.

Over the last 25 years, sales has been enabled with a broad set of new technologies, from sales force automation to CRM to cloud based mobile sales tools. All aimed at helping the sales organization better track, measure, and achieve quota. And with each advancement in technology, sales has gained the feeling that it has more control over the process, and outcome.

The buyer’s journey is marketing’s “shiny new penny”.  Over the last couple of years, numerous consulting firms have produced research trying to map the journey with varying estimates on how late in the journey customers are now engaging sales.

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Before you go off preaching this newfound perspective on how buyers are now in control to a sales organization, who might just have a counter viewpoint, there are some things you need to know:

  1. This is not necessarily “new” news – educated buyers have been engaging late in the process for years, and in some cases, bypassing the sales reps all together ordering direct.  What’s different now is that we have better tools to track their behavior.
  2. It can be threatening – sales folks “cover” buyers, be it a prospect or an existing customers.  Their job is to start a conversation and to continue the discussions to, hopefully, a successful outcome.  They can’t be everywhere, or everything to everyone, but to suggest that they are not providing buyers with the right information at the right time, or that they may not be “covering” them will cause a defensive or hostel reaction.  Be tactful in the way you present the findings.
  3. Buyers channel surf – don’t assume that buyers are only online in the early stages of the buyers journey, and likewise, that they are only talking with sales in the late stages of the process.  Unlike the past, when we could estimate where customers were in the sales process by watching how they engaged with content and channels, buyers now use all channels, and all information sources, at all stages of the journey.
  4. Good sales people already get it – good sales people are very intuitive by nature.  They already have a feel for how buyers research and purchase products.  They also know how to use the best content and/or tools to help buyers advance their learning and to move the process.  As a result, they will want to know how you can help them.
  5. Have a Plan – especially for the sales people I just mentioned.  The question that you should expect to get after sharing the information is; “So what now?  Given this new insight how should we change our sales and marketing approach.” Make sure you have an answer.

My gut reaction was that the buyer’s journey would pose a significant change for sales, I now realize that it’s a much bigger challenge for marketing.  Given the amount of time spend online in the research phase, buyers already have a good feel for the “business value” of your product or service by the time they engage sales. It’s why they have put your organization in the “consideration set.”

The challenge, according to recent research, is that buyers are unable to differentiate your product or service from the 3-5 other companies they are also considering.  To create separation, you must be able to illustrate and communication “personal value”.

And that has not been a strength of marketing, but it’s a core competency of good sales people.  Use this opportunity to partner with sales to developed content that resonates with buyers on emotion level deeper into their journey.   Sales may be losing control over the buying process, but they know how to connect on a personal level with individual making the purchase decision, use that to your advantage.

5 “Bigs” to Make Marketing Matter

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Do you think the senior executive team is excited about the big lead generation campaign you just launched?  Nope.  How about the number of “Likes” on your corporate Facebook page?  Think again.  Marketing doesn’t matter in many organizations, because it thinks, operates, and worst of all, reports “small.”

Executives sitting in the “C-suite” got there by thinking big, managing big, and reporting “big”.  Marketers commit hari-kari with this group by reporting tactical level activities – “minutia,” that garners no ones attention.  Do you think the head of sales is reporting the number of sales calls reps make a day?  No.  If you want to get their attention, you have to make marketing more important to them.  Here are five ways to go “Big.”

  • Big Bets – if you want marketing to be valued you have to understand, and link, to what the organization values.  It’s that simple.  If it’s market share, connect marketing objectives and activities to acquisition or/and account penetration.  If it’s profit, understand the drivers and align your teams’ efforts appropriately.
  • Big Strategy – once you understand how to link marketing to the business objectives your job is then to connect those big bets to day-to-day marketing activities.  Your smarts will be needed to take the marketing requirements from the product and sales organizations (which may be very tactical) and link them to the overall marketing strategy that aligns to the “big bets.”  Warning – this will require math, perhaps lots of it.
  • Big Plays – to execute, organize your marketing objectives as defined by your internal stakeholders into 2 or 3 “big plays.”  If market share is a key growth objective, a big play should focus on an area that has the greatest opportunity to do that…a specific market, product and customer.  All marketing activities/campaigns should be nested around that “play.’  Messaging is critical here because it is the “big play” wrapper that creates consistency in the communication across execution –think “Smarter Planet.” IBM discovered years ago that the best performing campaigns stayed in market the longest, and had the highest level of integrated tactics.  It takes focus and discipline to do, but if you can get there it will make your life easier by allowing you to organize everything under a big play umbrella, and if things don’t fit…then maybe you don’t do it.
  • Big Results – the first rule here is to understand that measurement and reporting are different.  Measure everything, but only report “process” or “results” metrics.  Executives care about “outputs,” not “inputs.” Inputs are activities, outputs are results, know the difference.
  • Big Balls – ya gotta have ‘em.  You are going to have to get comfortable with, and embrace risk.  If you do this right, you will be placing bets, that at the time, you will not know how, or if, they are going to pay off.  Years ago, I worked with a CEO that committed to double the size of the business in three years.  The CMO calculating sales cycles realized to support that growth marketing needed to double the number of leads that year.  She had no idea how she was going to do it, but it caught the attention of the senior management team, focused her team, and it happened. But as she learned, you don’t try to go it alone. Reach out to others with your plan, get their buy-in and support.  Level set expectations on timing and performance, it may require a significant investment in time and money for the “big bets” to pay off.  Set big goals, but be realistic in getting there.

The time for going “big” is now.  In Forrester’s recent B2B CMO’s Must Evolve or Move On report, 97% of marketing leaders who were survey agree with the statement that “Marketing must do things that is has never doScreen Shot 2013-09-22 at 5.09.56 PMne before to be successful.”

The other interesting, and important nugget from the research is that marketing is playing a bigger role in influencing corporate strategy, and other functions.  Make sure you’re capturing this opportunity at your organization by thinking, and by being — “Big”.

How Marketing Impacts Sales Performance

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You know the question is coming, because it comes every year.  You know who is going to ask it, because they ask it every year.  It’s just a matter of when, perhaps at the end of a difficult quarter, or during a mid-year review meeting.  As budgets are being discussed it comes; “What are we getting from our marketing dollars?”

It’s a fair question to ask, and given the size of some marketing budgets, marketers should be asking the same question.  To answer the sales executive (usually the one asking the question) you must first recognize what they are really asking, which is; “what is the value of marketing to them?”  Specifically, they want to know the impact marketing is having on sales performance, beyond leads.

A few years ago, we did some interesting research for a medical equipment manufacturer.  Their analysis showed that they were missing opportunities but they couldn’t agree on why – was it a sales or marketing issue?

To uncover the answer we interviewed hundreds of buyers (customers and prospects) in order to rate the performance of the company compared to three competitors, at four stages of the pipeline, product awareness (unaided), consideration, proposal and win.  We then constructed a quantitative model to reflect the impact of changes in performance. Two years later, we were given a unique opportunity to measure the impact of recommendations and investments.

The research yielded three key insights on the importance of marketing and how it was impacting their sales success:

1. Increasing Opportunities  – without marketing support sales cannot move consideration rates.  The company’s unaided product awareness rate was 62%, compared to 88% for the market share leader.  The consideration rate was even worse at 46% compared to 86% for the leading competitor.

The organization had a strong sales culture.  So to demonstrate the need to increase marketing activity, and not just sales coverage, we included “relationship with the sales team” as a key consideration drive, along with typical drivers such as; price, brand, and service.

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The research showed that the relationship with the sales team was not an important consideration driver.  In fact, the data revealed that reps could do very little to change buyers’ perceptions relating to products and service.  It also revealed a new buyer that was not being reached by the sales force.

The company increased the marketing budget and reallocated funds from events into digital marketing.  They ramped up webcast, videos and built a microsite specifically for this new buyer.  As a result, Awareness rose 17 percentage points to 79%, and Consideration, originally at 46% rose to 62%.  The model showed that an incremental 1% change in consideration rates yielded 20 new opportunities, and almost four new wins with a value of almost $2M.

2. Sales Coverage increased marketing activity can create the perception of greater sales coverage.  Buyers were asked how often they saw a sales person within a 90 day period.  They mentioned seeing the company reps on average of 0.8 times, basically once a quarter, while reporting rep visits from the leading competitor at 2.5 times, almost once a month.  Two years later, buyers stated seeing the company’s reps 2.4 times per quarter, on par with competitors.  As a result of the ramped up marketing efforts, buyers perceived an increase in visits despite the fact that the number of reps in the segment remained the same over the two year period.

3. Sales Enablement marketing can identify shifts in buying behavior.  The company’s performance had increased in all stages of the funnel except for one, existing accounts Reps had mentioned that customers had become more “price sensitive” and competitors were undercutting them.  The company was the product leader in the industry and the senior management team still believed that technology innovation was the key consideration driver.

The follow up research found that the sales force was indeed right.  Buyers had shifted their priorities.  With changes in reimbursement, healthcare reform, and an effective competitor campaign against overbuying technology, buyers had indeed changed, much faster than anyone suspected.

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As a result, sales material and value proposition had to be updated quickly.  Instead of espousing the virtues of innovation, it now needed to help buyers justify the investment.  Leading to a shift from “bells and whistles” to “ROI models and product configurators.”

So, how do you communicate the impact marketing has on sales performance?   Tell the sales folks that marketing can identify new buyers and influencers, increase the number of opportunities reps see, improve a buyers perception of sales coverage, and enable them with the right value proposition at the right time to win the deal.  Of course, you’ll need the data to prove it.

In this case, the increased marketing investment and activities yielded $50 million in new sales over the two-year period…just as the model predicted.

Microsoft Kinects with Audience…Finally

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Original post date 11/29/11

With the Christmas shopping season fully upon us, Microsoft’s Kinect motion-sensing game device is expected to be at the top of the gift list for many consumers. Last year, Microsoft sold 1 million Kinect devices for its Xbox 360 in 10 days, and in a recent poll it was at the top of the wish list for children 13 and older. But what you might not expect is that some of those orders are going to be coming from businesses.

Early this month, Microsoft launched Kinect for Windows SDK with a brilliant, new ad called “Kinect Effect.

The Kinect Effect TV Ad

Microsoft is pushing Kinect hardware for Windows SDK for business applications.  As staff writer Jason Kennedy from PCWorld states: “SDK will make it possible for programmers and dreamers from the world over to tinker with the system and make it do things Microsoft hadn’t thought of, and push the development of NUI [natural user interfaces] to the next level.”

What is noteworthy about the Kinect Effect ad is what it took for Microsoft to make it. Six years ago, in an interview with CMO magazine, Microsoft CEO Steve Ballmer confessed to a problem long known by many consumers of Microsoft products:

During Microsoft’s climb to the top of the software industry, rapid-fire product cycles often happened without much front-end input from the folks in marketing. Engineers would develop new software, pack it with bells and whistles, decide on an acceptable number of bugs and toss it over to marketing for a press release and a launch event.”

At the time, Microsoft had set out to change that course through an expansive and expensive relationship marketing initiative. Internally, it aligned marketing with product groups, created a “mea culpa” marketing campaign to reach out to past customers, and targeted loyalists hoping to turn them into advocates.

But because of its past transgressions, and a perception that many of its products were “necessaries” with little to pique the desire of consumers, Microsoft struggled with finding an ignition point, or something to connect customers with the brand and ignite their passions.

Well, those days appear to be over. With the Kinect Effect, the tech titan proves that it can be relevant, even desirable, with a campaign that is expansive, inspiring and incredibly human. The campaign asks audiences to dream about how they might use Kinect by inspiring them with images of people playing air instruments, a doctor flipping through X-rays, and a student deconstructing DNA with only hand motions.

The expansiveness of the idea allows Microsoft to reach, and hopefully inspire, all three of its targeted audiences, including consumers/users, businesses and developers.  Any one group can have the dream, but all three are needed for it to become reality.

Perhaps the most significant point of the ad is that it’s proof that the relationship marketing effort was a success, Microsoft now understands the strategic importance of the “front end” as Ballmer calls it.  Five years ago the message of the commercial would of been about the “bells and whistles” of the Kinect device.  This ad is an elegant and visually stimulating vision of what Kinect can enable, the virtually unlimited imagination of dreamers.

If Microsoft can continue to build this connection with the customer while retail store openings roll-out into 2012, it could transition itself from the company that makes the “have to have” product to the company that is the “want to have” brand.

How to Get Your “Why Us” Story Straight

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If you did something 400 times you would think you would be able to get it right at least once.

Not always, as we learned after being called in to help a well-known company draft their corporate value proposition…after they had already attempted 400 versions unsuccessfully.  True story.

Outside of delivering consistent financial performance that meet expectations, creating an effective and impactful “Why Us” value proposition is the biggest challenge for most organizations.  That 30 second blurb that explains to a prospect or customer who you are, what you do, and how you are different.

Why is it so hard?  Companies are engaging with customers every day, and pitching their wares to new prospects just as often.  Then why is it so hard to come up with a compelling and agreed upon “Why Us” story?   Well, feel free to pick any one or more of the following reasons:

  1. Ownership – it’s everyone’s job…and no one’s job.  The organization debates who should create the story, and as a result, it doesn’t get done or…
  2. Versioning – the good news is the company has a story.  The bad news, there are many of them, none of them the same, and a new one is created for just about every new sales meeting.
  3. “Inward-out” – the story using internal jargon, it’s too long, reflects the company’s views, and not the needs of the customer or prospect.
  4. Non-differentiated – it focuses on the features of the product or services and not the benefits delivered to customers.  As a result, it sounds just like everyone else in the market.
  5. “Same Page Syndrome” – this is the most fascinating of all.  The folks responsible for putting together the story bring their own perspective on what the story should be.  Using their own experiences, their role, and their history with the company, they all bring a different view on what the company does and why it’s unique.  As a result, no one can get on the same page to describe the organization and its value…resulting in 400 rounds of edits and/or multiple versions.

Given this situation, how to do you get it right?

  • Ownership – this is a collaborate process but marcom/corporate communication should own it. They are in the best position to understand the brand value, audience needs, and are responsible for external communications.  Corporate starts the process and then cascades it down the organization to add more detail.  They own the final version and the governance process to lock down “version de jour.”
  • Go outside – start with doing external research looking at your target audience and industry competitors.  This will help you understand “tablestakes,” how to define value, and differentiate services.  It should also help eliminate the “internal speak.”  See below.

Evaluating the Market

  • Get on the same page – for many organizations, this is THE challenge.  Before attempting to draft anything, get ALL key stakeholders to agree to ONE of the following.  (Michael Treacy and Fred Wiersema conclude in their book The Discipline of Market Leaders that exemplar companies leverage one of three value proposition types: operational excellence, product leadership, and customer intimacy.)
    1. Operational Excellence—This value proposition type guides companies to provide products at the best price or greatest convenience. Operationally excellent companies construct a value statement that emphasizes low prices and hassle-free service.
    2. Product Leadership —This value proposition type encapsulates companies that offer consistently innovative products that push performance boundaries. Companies defined by product leadership communicate their commitment to provide customers with the best product or service.
    3. Customer Intimacy—This value proposition type directs companies to cultivate long-term relationships with members of their target audience. Customer-intimate companies specialize in satisfying the unique needs of individual customers and provide them with the best total solution.
  • Make it personal and relevant – David Akers, a marketing professor at the Haas School of Business, defines a value proposition in three parts: Functional benefits, Emotional Benefits, and Self-Expressive Benefits.   The functional benefits are related to the step above.  Emotional benefits are typically tied the role, and self-expressive benefits to the individual.  See below.

  • Test, Refine and Validate– start with the sales organization, and then with a few of your customers.  This process is not only about capturing the value of your organization through the ears and eyes of your customers, but it’s also a change management challenge.  The process can still break down unless the organization “buys-in” to adopting the final output.  Customer validation will help “lock it down.”

Lastly, be disciplined – once defined, stick to it for at least a year.  Marketing’s role is to clearly communicate the value (organization, product, etc.) to targeted audiences, sales is to convert it into revenue.  As a result, sales may take some liberties with the story.  But keep in mind, just because someone comes up with a clever new “Why Us Today” story in the heat of a pitch, doesn’t mean you change your messaging.  Stay on point, you don’t want to do this 400 times…trust me.

Why Sex Sells

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Original posted on Forbes July 25, 2011

Years ago some colleagues of mine built what we thought at the time was the “holy grail” of business marketing:  A sophisticated analytical tool that could tell a marketer where to invest, why, and what the return would be in sales productivity.   It could also tell them where to cut dollars, why and what the impact would be on the business.

It was an incredible feat of analytical modeling and technology.  Built for one of the most respected and well known companies in the world, so the CMO could answer with absolute certainty the CEO’s question: “What am I getting for my marketing spend?” We thought that it was our ticket to the big time and the rocket to ride to explosive growth, but that was not the case.

It turned out to be the only one we sold.   And that always baffled me.  Anyone who saw the tool was awed by its power and insight, but they didn’t buy.

Over the years, I picked up some clues as to why others would not buy:

  • The head of a major west coast based IT company warned us that our business intelligence tool and analytic model might limit his managers’ ability to make decisions based on their experience … “gut feel.”
  • The CMO of a global software company was concerned that our meticulously designed marketing processes, with stage gates and Gantt charts might limit his team’s creativity.
  • The head of marketing finance at a major Financial Service company told me that every year they run their marketing optimization model and it tells them that they overspend on TV, and under spend in print. But at the end of the year if there was additional budget leftover the CMO puts it in TV.

I’ve now been able to put the pieces together.  I came from a marketing science world and have since learned to appreciate and understand the value of the art of marketing.

Data and analytics can tell you where customers are, what they look like, what they’re interested in, but science alone can’t make customers buy.  It can’t make customers advocate for a brand, and it can’t make the hair stand up on the back of their necks.

Insightful, creative and relevant ideas that trigger human emotions can –  and do – sell.   For as much as I wanted to believe that buyers were rational creatures behaving in predictable patterns, I now understand that they are not.

Marketing, as much as we want it to be, is not an exact science.  Technology innovation has allowed us to better understand buyers, influencers and the performance of our activities.

But at the end of the day, business is personal.  We can’t remove the human element from the buyer or seller side.  Relationships and perceptions matter, how a product and/or a brand makes a customer feel is important, and it’s not easy to model or predict.

And with that, I found the answer: Although helpful and informative, good marketers don’t need to rely on sophisticated analytical tools to make decisions. Their experience, “gut,” and sometimes the hairs on their back of their neck do just fine.

Social CRM – Who Gets Credit for Closing the Deal?

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Originally posted on August 11, 2010

Social Relationship Management and Social CRM are terms that are now being thrown around for new technology platforms that are enabling multichannel execution.  Companies like Lithium Technologies have created platforms that allow companies to run hosted communities, listen across a variety of social media channels, and manage content to and from social networks in one integrate tool.

While marketing has steadily evolved from “one to many”, to “one to one“, Social CRM is now creating the opportunity for “many to one.”  For example, a customer tweets a question about a product (e.g. is it worth the money) on Twitter, a customer advocate brings that comment into the company’s online forum. Customers response to the question by sharing their experiences with the product, those comments (most likely only the positive ones) are then tweeted by the company to promote the product.

The promise of Web 2.0 has always been about customers selling to customers.  New Social CRM tools are now enabling that by consolidating platforms.  But this has the potential to raise issues over who gets credit for the sale.  If the true ROI on social media is revenue, which many research studies are now suggesting, then who should gets credit for a sale closed by a customer advocate?

Customer references and testimonials have always been critical for closing deals. What happens when customer advocates volunteer their support for the brand and/or endorsement of a product?  Does marketing get credit for providing platforms for enabling customer advocates?  And what about the customer/s  who’s comments help push the prospect over the goal line…do they need to be rewarded, and if so?

One thing is certain: social media is blurring the line between sales and marketing interactions and dialogues.  Given that, we may have to rethink our traditional views of customer coverage and relationship management.  Perhaps in the future, marketing will be responsible for managing customers online relationships, and sales for the offline experience.

Someone call HR and give them the heads up. Territory planning, revenue crediting, roles and responsibilities might need a refresh soon.

The Top 10 Laziest Sales Tactics

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Original post date August 27, 2010

The amount of “lameness” on the part of some sales people (and some marketers) has now come to a point that I think a public flogging is in order. To those Michael Scott’s of the world (and I like Michael), know that we are on to you. The following tactics have never, and will never, produce a lead.

1. Filling out a company’s contact form on the website with ”contact me if you need…” Yep, I’ll get right on that.  (Click on the image below, it may take a moment to build).

Mike, for example, was able to jam an entire spam email onto our company contact me form, impressive.  Sure, I will take the time to read the entire message box and get back to you.

But wait, sensing that I might not take him seriously, he submits the form again 2 minutes later.

2. Sending an email blast with the generic intro of “Dear Sir.” Forget everything you’ve learned about 1 to 1 marketing, personalization, relevancy, this just might work.  Just get a list, and go.
3. Even better, the telemarketing of version of the “no effort” approach.  Cold calling and asking; “can you please tell me who handles…”  Instead of you doing your job, you’re now asking me to do it for you — beautiful.
4. Some telemarketers have taken it to a whole new level. Love the folks who leave a message without saying why they are calling, but then ask you to call them back. And my personal favorite — the rep who invented the “I’m returning your call…”   It’s like the guy you knew in college that spent hours figuring out how to cheat for a test, instead of using the time to study.
5. Advertising your services in the comment section of a blog.  Let’s take Jeff D, he didn’t even try to hide it in a link.  He went straight for the kill.
It’s not all bad because he does give me “props” at the end of the ad…”I like your information it is helpful to me.”  Mmm, is it helpful because it gives you an opportunity to display spam?   Apparently so, because Jeff D comes back 6 days later, this time pimping new services, Website design and development.  Notice I get no “props” this time.  Pretty tricky changing the name of the company, almost didn’t catch him.
To Jeff D, and all the other spammers, know that bloggers decide whether or not to post your comments.  The comments above never made it public, I saved them for my own personal enjoyment, and this blog post.   Also, know that Blogspot, as well as other platforms, now have enable spam filters.  Good luck on future postings.
6. Posting a discussion within a Linked-in group that isn’t a discussion, but rather, an advertisement for your company…it’s not a discussion; it’s spam, and it’s annoying.

 

Take Mr. Gupta for example, at Web Box Office. He’s advertising “Learn the secrets to success with attendee-funded webinars.” Sounds good, huh. Guess who’s paying for the webinar…you are, Mr. attendee, if you register.

7. Using the yellow pages as your prospect database. I’m not kidding, people are still using it. Just wait until they find out about the internet.

8. Offering something FREE, unless it is truly FREE.  Taking a credit card number so you can start billing a customer after a “free” trial is not free.  This is not selling, it’s scamming.   There are rules, some people call them laws, governing this practice.  See FreeCredit Report.com for an example of how not to do it.
9. Any email coming from Nigeria, or any other country, offering a fortune if you could just help them  by giving them your social security number, bank account number, etc.  To good to be true, something for nothing?  Any of this ringing a bell?  Ok, maybe I’m a little bitter because I’m still waiting for my $1M from the British Lottery Authority.
10.  Actually, couldn’t think of a 10th, but I’m sure there’s one or more out there.  I’d love to hear your experiences.  Add your “Top 10″ story in the comment section, but please easy on the spam.  Jeff D takes up a lot of my time.

I know that times are tough, but with the amount of information now available in the public domain, there is just no excuse for these tactics other than…just plain laziness.  C’mon guys, kick it up a notch!   If not, I’ll be out with the Top 10 sequel or maybe a FREE webinar.

Why Sales Channels and Marketing Campaigns Fail

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Original post date March 24, 2009

In August 1999, Selling Power magazine ran an article featuring our firm and the work we’ve done helping clients, like IBM, build new sales channels and increase sales productivity. A few months later, we received a call from the head of a division within NCR asking us to meet with them to see if we could help them with something similar.

The senior executive with whom we met said if we could help IBM we should be able to do this project for them. Excited about the prospect of helping them build a new channel, we agreed and they laid out the challenge:

  1. A well-known consulting firm had been previously engaged but had failed
  2. …which left only 41 working days to get the new sales channel up and running
  3. An internal NCR tele organization was competing for this…which, we would later learn, tried to sabotage the effort…and us
  4. And finally, we were entering the holiday season…good luck

After collecting the previous project work we quickly went to work on assessing what had gone wrong. It took us a while, but we finally discovered “IT”. Once found, this insight became the key to unlocking success.

Almost ten years later I’ve seen this scenario play out over and over in B2B companies. This is what we discovered.

The secret recipe for failure

This simple equation is just as true today as it was a decade ago when we discovered it. Oh, you may find one or two exceptions but the majority of the time when we do post mordem on failed programs you find this equation is at the heart of the problem. When combined with a few related pieces, like a lack of time in the market and/or funding, the initiative is doomed. The degree of “newness” in these three areas will directly impact the likelihood of success or failure.

Sales Channels

  • Why they fail – new sales channels fail because companies aim new channels at the wrong targets — new customers/markets. An investment in a new sales channel means that it is competing with existing channels for funding. If it does not hit expectations/goals quickly, it will be robbed of the necessary funding and/or resources needed to make it successful.
  • How to improve the chances for success – The most successful way to build a new sale channel is to do exactly the opposite of what is described above. Shift coverage of existing customers or products to the new channel and use your existing channels to go after the “new.” Shift dormant or flat growth customers to the new channel to give it revenue immediately and free up your existing most knowledgeable, best trained sales folks to go after new opportunity.

Marketing Campaigns

  • Why they fail – new marketing campaigns promoting new products aimed at new customers typically fail because of reasons listed above…they take too long to produce and/or aren’t given the time. Here’s another common problem, agencies will tell you the problem is the “creative” or “value prop”…maybe, but they also could telling you this because they make money on creative and production. “New” works with their business model.
  • How to improve the chances for success – build less individual campaigns and invest more in one or two long term programs with many integrated tactics. Keep the programs in the market longer, closely monitor them and modify tactics based on performance. You don’t need a new campaign every month, you need a program that produces…and with tight budgets this will help you be cost effective/efficient.  Years ago we did an assessment of campaign performance at IBM. We found that the highest performing campaigns had at least 7 integrated tactics and stayed in the market for at least 6 months. Use this as a starting point to design your campaigns and programs.
  • New to New thru New - level set expectations and invest for the long haul. You will need time and commitment to make it successful. Companies have short-term horizons that are getting shorter every day. If you’re going to lead this effort get everyone to agree on what defines success and stick with your timeline.
  • New Product/Service/Solution – try to leverage existing channels, customers or both to start…then migrate to new. This way you can learn if you have the right value prop, messaging, pricing, etc. We like to take existing reps, for example, and use them to help launch a new sales channel, like Tele. We like to use existing customers to test new products, etc.

We got the NCR teleaccount program up and running in 41 days. We transitioned existing field account managers to TeleAccount managers and built their territories around their customers. We then began to backfill them with new lower cost resources over time. You’ll be happy to now that the manager of the group that tried to sabotage the effort got fired.

The program hit our first year sales targets, reduced the expense to revenue ratio from 13% to 6% and grew sales productivity from $1.7M to $3.1M per rep. As a result, NCR then built a full-scale tele channel with close to 80 reps.

Then they killed it.  It’s a long story but the bottom line was the company has a strong field sales tradition and culture.  Mark Hurd, now CEO of HP, became the CEO of NCR, and decided to shut the channel down, redirecting the resources to the field.

Remember my comment about competing for resources. Mark’s an operations guy and a fan of face to face selling.
Culture runs deep, and can also kill channels and programs. Maybe I should update the “recipe” to include the forth “New”…new leadership.