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Are Marketers Measuring the Right Things?

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Tell me if you have heard this before; “we need more, and/or better leads.” The chances are, if you’re in hi-tech marketing you may hear it on daily, weekly and monthly basis. Why?   According to Forrester consultant Tom Grant, it’s because of the need to feed the funnel.

In his report Tech Marketers Pursue Antiquated Marketing Strategies Grant compared hi-tech firms to other industries “B2B technology companies treat marketing as an opportunity to sell new products and services to new customers.” As he stated “the product is the axis around which marketing efforts turn,” and as a result, the primary objective of marketing is to produce leads.

Similarly, marketers have long held the belief that because of sales short-term focus on making quarterly objectives, it either lacks the appreciation of, and/or the sophistication to understand anything other than lead gen, for example longer-term brand building and awareness activities.

But what if both of these viewpoints were actually wrong. What would happen if you asked sales what they valued, rather than assumed you knew the answer? How might it change how marketing thinks about its impact on the organization?

For one B2B Tech Company, feedback from the sales force is helping them refine their value to the organization. “When it comes to enabling the sales force, we’ve previously relied on what I call “measurement-by-anecdote.” Our goal with this study was to quantify what sales values from marketing so we can focus on the things that make a difference.” said Rick Dodd, SVP Marketing of Ciena, a $2 billion global optical and packet networking company.

To gain that insight the company surveyed its global sales force, including five types of sales reps covering five different account types. Over 400 sales reps provided feedback on their priorities for marketing and marketing’s performance.

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According to sales, the highest ranked marketing activities were at the top of the funnel, 92% of sales said that increasing the awareness of solutions was very or extremely important, increasing consideration was close behind at 91%, only 65% mentioned lead generation.

“Our sales force is very experienced; they understand that technology and industries change quickly. We’ve obviously been successful positioning ourselves for today’s market, and now we want to take best advantage of the big shifts in our landscape. The survey showed us that for sales to be successful, marketing has to be able to change customers and prospect perceptions,” according to Dodd.

Perhaps the most interesting insight to come out of the research, is how Ciena is now thinking about measuring and reporting marketing’s impact on the organization. “Measuring pipeline value is a struggle in our business”, said Bill Rozier, VP of Marketing. “We have long, complex sales cycles that make it difficult to isolate marketing’s impact.”And they are not alone it in that challenge. The Aberdeen Group’s recent Demand Generation study found that 77% of respondents rated visibility into lead performance across stages as very valuable, but only 43% indicated they can do thi effectively.

Instead of spending a lot of time and energy in trying to perfect an imperfect process, thecompany is focusing efforts on measuring marketing performance at the macro level. “At the end of the day, our performance is ultimately measured in sales success, so that’s what we are focusing on measuring”, said Rozier.

To do that, the company has created a quarterly dashboard from the survey. Two regional sales organizations each quarter will be asked to evaluate marketing’s performance in three areas: 1) Marketing’s contribution to sales success; 2) Marketing’s performance compared to competitors; and 3) Marketing’s contribution to the success of the organization.

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It’s a unique approach, and perhaps one that should be considered by others, because the challenge in performance management is often in defining the right metrics to drive the intended behaviors.

Ciena’s approach, as Dodd concludes, is to put the focus on the right conversation; “As we learned through the research, contributing to the success of the sales force isn’t just about one thing, it isn’t just lead gen. I appreciate that they give us credit for doing a good job when compared to competitors, but what we’re most interested in understanding is how well are we doing in enabling them to win. If the sales team rates our contributions as being valuable to their personal success, then we know we’re doing the right things.”

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.

Half of Your Sales Pipeline is Junk

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John Wanamaker was an innovator, a merchandising, and advertising genius. But when he made the statement; “Half the money I spend on advertising is wasted, the trouble is wasted, the trouble is I don’t know which half.” He left legacy that has haunted marketers ever since.

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New research from CSO Insights suggests that the day may have come for sales. In their annual Sales Performance Optimization study of over 1500 companies across multiple industries, CSO found that the accuracy of sales forecasting fell to a near all-time low of 46.5%.   Or as John Wanamaker might say; “Half of your sales efforts are wasted, you just don’t know which half. “

And since the forecast, defined in the study as near-term (30, 60 and 90 day), is an output of the sales pipeline, one could also conclude that half (or more) of the pipeline is “junk.”

With the wide spread adoption and utilization of CRM (84% of the firms surveyed), marketing automation, and analytical forecasting tools, the question is how can this be?

Here are some thoughts on why this might be happening, and five tips to help you improve your forecast.

Reasons for poor forecasting:

  • Impurities in the System – let’s go after the big one first.  “Garbage in, garbage out”…as they say.  There’s a laundry list of things to look for — from reps putting leads in the system right before they close, to not updating opportunity consistently, and leaving in dead leads too long.
  • Sales Optimism – yes, the economy seems to be recovering but it may not be moving at the “speed of sales.”  Sales folks are an optimistic bunch; they want to believe things are better than they may be in reality.   For example, the average length of the sales cycle.  In a report earlier this year by BtoB Magazine, 43% of marketers reported that the sales cycle had increased over the last 3 years.  Which is consistent with the CSO Insights report where 42% of Chief Sales Officers stated that the sales cycle had lengthened, in particular with new acquisitions.
  • Incentives & Goalstake a look at how reps are being incented, and/or their sales goals.  You may find the reason why reps leave opportunities in the pipeline too long, and/or are over optimistic with their forecast.  Pressure to build and maintain pipeline can sometimes cause counter productive behaviors.
  • Gut Feel – even if the troops in the trenches are putting in accurate and timely data, the generals may change it to fit the political environment and/or their own personal bias.
  • Changing Buyer Behaviorrecent research has shown that the buyer’s journey, and the typical sales process are not aligned.  Buyers frequently start and stop the journey, or will cycle at a stage, and even move backward in the process.  CRM systems are typically designed in a linear approach, progressing from a lead to a close.  It’s an internal view, and increasingly out of alignment with buyers’ preferences.

How to improve:

  1. Active Pipeline ManagementThe pipeline and forecast will never be 100% accurate. That said, you should have a feel for how far off it is, and what is needed to improve.  For example, do you have an inspection process to keep the pipeline current?  If so, consider doing it more frequently.  Move quarterly reviews to monthly.  Also, if everyone is responsible for updating the pipeline, then no one is responsible.  Consolidate the “maintenance and hygiene” of the pipeline to one person.  Others may be responsible for providing updates, but one person needs to police the system.
  2. Discount Probability and Value – conduct a post-mortem on past forecasts over last year or two.  Assess the difference between forecasted and actual results.  Create discounted probabilities based on that delta for: lead movement (from stage to stage), and lead value. If implemented, evaluate the accuracy of your “pre-set” discounts.  It should help bring forecasts more in-line and ground “sales optimism” in a bit of reality.
  3. Govern the Process – to improve the accuracy of “output”, focus on implementing and managing a standard process.  Accenture’s Connecting the Dots on Sales Performance found inconsistencies among reps in using their company’s defined process and methodologies to selling.  A quarter of Chief Sales Officers surveyed stated that sales reps used their sales methodologies 50% of the time, 31% said it was used 75% of the time.
  4. Leverage Marketing – close the feedback loop with marketing to improve the quality of leads from campaigns and activities.   In a report on Sales & Marketing Alignment by the Aberdeen Group, marketing accounted for 47% of the sales forecasted pipeline in the Top 20% of companies studied, compared to only 5% of laggard organizations (bottom 20%).
  5. Utilize Business Intelligence Tools – high penetration rates of CRM may equate to high visibility, but doesn’t automatically mean that it provides the best insight.  Despite high adoption rates of performance dashboard, few companies are using business intelligence or analytics tools according to the Aberdeen Group report on sales forecasting.  However, the report found that 44% of the highest performing sales organizations were using predictive analytics to reduce “gut feel” in the forecast.

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Of all the options, perhaps the best lever for impacting accuracy is the rep.  As Ashish Vazirani, a Principal in the Hi-Tech practice of the sales consultancy, ZS Associates says;  “A sales person needs to be coached, or apprenticed on how to discern and input the right information for accurate forecasting. Technology can make us lazy and reliant on the tools to do the thinking, we need to emphasize the importance coaching plays in keeping the garbage out of the system. ” 

 Helping the troops become better soldiers through coaching should help improve the accuracy of the forecast.  As well as, implementing the tips mentioned above.  But you may still find that half of the pipeline is wasted, but hopefully, unlike Mr. Wanamaker, you’ll understand which half.

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.

5 Ways CMO’s Lose Credibility with the C-Suite

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This post was originally posted on July 8, 2011.  It also appeared on Forbes.com 

Here’s a hypothesis: Given the greater focus on ROI, marketing automation tools, and enhanced tracking of results, marketing is more of a science than ever. Therefore, marketers’ ability to defend and validate their value among peers should be easier than ever before.

So why does a recent study by Fournaise show that CMOs still lack credibility with CEOs?

The study points to several deficiencies with an emphasis on communication – are you sensing the irony?  Further, marketers tend to sabotage themselves in everyday interactions with the larger executive team, and in many cases, have no idea they are doing it.

Here are five common mistakes among marketers:

  1. Stumble explaining the value of marketing. Asked almost daily, and rarely answered properly. The key is to understand how the inquirer perceives the role of marketing. The question behind the question is “what is the value of marketing … to me?” According to the study, it most often relates to “revenue, sales, EBITA or even market valuation.”
  2. Limited product, service, and customer knowledge. Even the savviest marketer will arrive DOA in the credibility department if they fall short on this one.  And it is not about feature or functionality, but rather customer use and application that matter most and those factors vary by industry and size. Leave “speeds and feeds” to the product organization. Marketing’s job is to differentiate and develop compelling value propositions that sell. If products are built “inside-out,” then bring the “outside-in” perspective.
  3. Can’t Dance. Marketing comes with highly visible risk and things are going to go wrong. When they do, marketing needs to learn how to dance. Handling these situations will define how marketing is viewed. Keep best and worse case scenarios in mind when briefing the executive team. Truth is, if marketing isn’t making a few strategic and tactical mistakes, it’s not moving fast enough. As a former IBM client told me, “If you fail, and you will, fail fast.”
  4. Isolation. A favorite question from sales: What have you done for me lately? And the product team can be equally demanding. However, marketing has to build, nurture, and maintain strong relationships with these groups. For Sales, it is helpful to establish an integrated sales pipeline and hold weekly pipeline meetings; this will build rapport and create a common sense of purpose. It’s also an opportunity to put marketing metrics in a sales context. The key to a successful relationship with sales is about communication and performance. For the product group, marketing needs to clearly define points of integration for research, content, and value proposition development. The key to a successful relationship with the product team is about process and integration.
  5. Where to invest – or cut – an incremental dollar. This question is posed by the CFO at the end of the quarter when numbers are off, and by the CEO who wants to redirect budget.  It’s also used as a test. As a holder of discretionary dollars, marketing has to be prepared to answer “where” and “why” along with stating the business impact.  In talking about CMOs, 72% of CEOs say, “[marketers] are always asking for more money, but can rarely explain how much incremental business this money will generate.”

To call out the sense of irony, most of these issues are communication related. The same rigor brought to external communication needs to be applied internally:

  • Know the audience
  • Understand their needs
  • Communicate to them in their language.

While the Fournaise study states that executives think in terms of “revenue, sales, and EBITA,” most make judgments based on their emotions. Marketers are advised to use their creativity in delivering the message.

Friedrich Nietzsche said it: “All credibility, all good conscience, all evidence of truth come only from the senses.”

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.

How a CMO’s Background and Experience Impacts Tenure and Hiring

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Original post date February 27, 2009

My inbox is full of resumes of good marketers that I’ve been fortunate to come to know or work with over the years. Solid people, with great experience who are now having a challenging time finding new opportunities in this incredibly difficult economic environment. Many of these people could have had their pick of jobs as recently as last year. Given the situation, I thought I’d try to help by providing a viewpoint on what skills set, background and experience companies will be seeking once they start hiring again. I’ll use two data sources to make the case.

 

A few years ago, we teamed up with a professor (John Josephs)at Kellogg on a couple of research projects aimed at getting a better understand of what creates a high performance marketing organizations. Internally, we thought of it as the “head” and “body” studies because we first studied the marketing organization (the body) and then the follow year CMO’s (the head).
We surveyed not only CMO’s and marketers, but also CEO’s, about their views on what makes marketing effective. The research was then published by the CMO Council. Here are a few things we discovered along the way.
CEO’s view on how to measure marketings performance 

How CEO View Marketing Value and Performance

This information is a few years old now, but I can tell you that based on client work that the down turn has done nothing to change this, if anything, it has placed greater importance on the top 3-4 responses. Keep the top responses on these charts in mind as we move to the next section.

 

Last month, I was given access to a database of senior level marketers (SVP and up) to do some analysis for the organization that owns it. We looked at the background and experience of over 800 marketers with the following titles:

  • 50% were CMO’s
  • 32% EVP’s of Marketing
  • 8% SVP’s of Marketing
  • And interestingly enough 10% had CEO titles but had recently been the head of marketing

They came from large, medium and small companies including start ups:

  • 25% – Large (over $500M)
  • 32% – Medium ($100-$500M)
  • 23% – Small ($50-$100M)
  • 22% – Start up or under $50K

We were interested in assessing their area of expertise, experience and tenure.

Although executives with Product Management and Sales Enablement/Demand Gen experience represent only 27% of the total group, they represented a disproportionate amount of executives with the longest tenure. In fact, they were twice as likely (as a representative percentage) to be in the 2-5 years tenure category than those with Brand, Advertising and Corp Comm backgrounds. And they made up half of the individuals in the more than 5 year category.

Another interesting thing we picked up is that markerters in the NYC area were more likely to be new in role versus other regions (higher than average churn…probably attributed to a higher supply of talent).

Spencer Stuart has for many years reported CMO tenure rates (less than the life of a gold fish) but I’ve never seen them look at tenure by background…which makes a difference based on our assessment.

Finally, let’s look at Supply & Demand.

The Top 20 Advertisers in the US have been decimated. Think about…half of the Top 10 advertisers in 2007 were automobile manufactures. As a result, agencies have put hordes of people on the street.GDP in Q4 2008 is estimated to have declined by 6.2% from Q3 that declined by 0.5%. Revenues are down on average of 30-40% from the prior year in most firms (at least the ones we work with).

As a result, there are a slew of marketers with advertising, branding, and corporate comm backgrounds (73% of the database that we analyzed) in the market.

Let’s put it all together:

  1. CEO’s measure marketing effectiveness by revenue growth and market share
  2. CMO’s see the greatest need for new talent being driven by the integration of sales & marketing
  3. A large supply of “above the line” marketers exist in the marketplace

Conclusion- potentially high demand and a low supply of marketers who can drive revenue.  The marketers that will be in the highest demand coming out of the recession will be the ones who have been aligned or have had direct responsibility for growing revenue. Marketers that can speak the language of sales. Unfortunately, it will be a slow process for folks with a Brand PR and Corp Comm or the Ex-Agency/Media guys.Marketers with backgrounds in Product Management/Marketing who have owned a P&L, folks with sales backgrounds and/or marketers who can show that they can drive revenue/growth will be in demand first.

The challenge for the other groups is that of supply. It’s not to say that good Brand and Agency folks won’t find positions it’s that it’s going to be hard. Expect that you will be competiting with many other qualified candidates and it may be difficult to differentiate yourself.

Unclogging the Pipeline

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Original post date Feburay 21, 2009

This post was recently featured in an article on MarketingProf’s

Pipeline slowed to a trickle? Opportunities backing up, lead-to-close time seem like forever…yea, welcome to the recession. With customers delaying and/or postponing decisions altogether the ol’ pipeline ain’t what it used to be.

Here are 7 Pipeline Management Best Practice tips taken from leading companies that might help:

  1. Weekly Pipeline Meetings with Sales AND Marketing - yes weekly…and with Marketing, do it in country and at the region level. You may also do it at the corporate level with the CEO , like IBM.
  2. Apply BANT – CRM is great at increasing visibility into opportunities but it tells you nothing about why opportunities aren’t advancing. BANT will. By qualifying and re-qualifying opportunities based on Budget, Authority, Need and Time you will get to the bottom line on why leads are not advancing. Reps will say that it’s “B” but I wouldn’t assume that. Companies are still spending (not as much) but now it takes a C-Level to approve (is your sales force getting to “A)? Budgets have moved higher in the organization and have been centralized. Also, business cases are required for EVERYTHING so if you aren’t submitting one with every proposal you’re not address “N”. Timing (T) of course, things are slow so you need to find out as much as you can about when budgets might get released and then check again, then again…
  3. 90 day Movement Limit – this is one of my personal favorites. If a lead (that is truly a lead) does not advance within a 90 day window it moves back to the previous stage in pipeline or is killed. Given that lead cycle times have lengthened…considerably, you may want to make the window 120 days. Up or Out…learn it, live it, love it.
  4. Define a lead and stick to it – look, it’s going to be difficult road but be honest with yourself on what is truly a lead. A response to a campaign offering a free gift card, or a download of a white paper off the website, aren’t leads…they’re responses and should be treated that way. Leads are defined by meeting a BANT criteria…see above. People will want to get fast and loose with the facts to satisfy the sales force or make marketing targets but don’t let them…stay firm, you’ll thank me when the recovery starts.
  5. Response Management – so now that you’ve removed the “junk” out of the pipeline it’s time to do something with it. In reality responses aren’t “junk” (well, some are), they’re potential leads that just need to be nurtured…for a long time in today’s environment. Don’t disregard them, I’ve seen too many companies do nothing with this group. In the good times most of them would be leads.  How to find them? Simple, ask this question during you pipeline call; “who owns responses that aren’t qualified leads…” wait for the silence. Bingo, there’s your answer. Take the last 6 months of campaign response and start digging.
  6. Lead Gen to Sales Enablement – it’s time to move marketing down the pipeline. Lead generation aimed at acquiring new opportunities is a waste of money in a recession. The cost of a qualified lead has skyrocketed…don’t believe me go do the analysis you will be surprised and in some cases shocked. So it’s time to invest against sales enablement and helping the sales force move opportunities already in the pipeline. Here’s another fact for you…B2B sales channels create 80-85% of all leads so cutting lead generation programs will not hurt you…I’ll say it again, redirecting investments away for lead gen activities will not hurt the pipeline.  What is sales enablement, and how does it help the sales force? Well, it’s things like business tools that can prove a ROI, sales presentations loaded with proof points (case studies) on your value, and a robust customer reference program (see the graph above). By aligning marketing activities to moving the BANT levers you will be investing marketing dollars were they can have the greatest return…and your sales force will thank you for it.
  7. Comp on or Emphasize Customer Meetings – if you build comp plans based on revenue and lead targets/production you may want to consider over emphasizing face time in front of the customer for the first half of the year. You’re probably saying to yourself, “but Scott, why would I do that if customers aren’t buying?” Right, but they can tell you why, when things might loosen, and who you need to get to (see my rant on BANT in bullet #2). It’s during these times that you need to have your reps in front of customers so they can collect the information needed to provide you with update during the weekly pipeline call. Use your sales enablement team (see paragraph above) to provide them with high value material to share with customers in order to get those meetings. See how it all connects?

I hope this helps. Unfortunately, it looks like we’re going to be stuck in this situation for all of 2009. Be strong…the bad times, just like the good times, don’t last forever.