Scott sat down with an old friend and senior tech executive, Stephanie Anderson, to discuss how to survive and thrive in the sales culture as a B2B marketer. With Stephanie’s substantial background in sales, service, marketing, and now as the chairman of the board of a healthcare software company, she brings a vast amount of knowledge and expertise to the conversation.
In the interview clip, Stephanie and Scott talk about sales misperceptions of marketing and what marketers can do to strengthen the relationship.
Along with the discussion on sales and marketing culture, Scott and Stephanie also dive into a conversation on CMOs, what is on their minds, advice for those new to the role, and what should be top of mind when “selling” to a CMO.
Watch the Full Interview here.
https://vimeo.com/368034169
Highlights from the Full Interview:
2:31- The advantage of having a sales background
10:20- The Sales versus Marketing divide
20:03- What is on the minds of CMOs
25:20- What advice would you give new CMOs.
To hear the conversation with Stephanie, listen or download here.
“Who invited marketing to the sales pitch?” It was said in passing, and intended as a joke, but the marketing team got the point.
The comment was made in a recent messaging workshop. The head of sales expressed his frustration at the messaging being developed by marketing. His point — there was nothing different. It sounded like the same sales pitch they had been giving customers for years.
He was right, and it got worse. Marketers were sending the message to the same audience, creating even more reason for buyers to tune them out. Good marketing, as we all know, should help open doors for reps, not close them in their faces, which is what was happening.
The Situation
The company was in the ingredient business. Similar to an OEM, their ingredient went into a part that was a component of a product bought by customers. Their additive had been on the market for 10 years and as an “ingredient” had few unique selling features. Its value was defined by how it was used further down the value chain. Keep this in mind while as you continue reading.
As a regulated additive, sales reps spend much of their time helping parts manufacturers understand how, and when, to use the ingredient. Despite this knowledge, parts manufacturers were reluctant to increase its use…growing share in existing customers was difficult and converting new buyers to use it was challenging. They had “pigeon-holed” the ingredient for only certain uses.
Unlocking Value to Create Demand
Making things even more difficult, the company relied on the part manufacturer to convince the product maker to add their ingredient. The reality was, the part maker only used the ingredient when it was required by the product manufacturer. In other words, the part maker was taken orders from the product company and building to specific requirements. Once that was defined no amount of sales or marketing was going to change that fact.
This reality became the tipping point for turning our interest to the product maker and the end customer. The “ah-ha moment” struck on day two when, using the Challenger Marketing approach, the team discovered that end customers were not aware of a potential risk that could impact their business, as much, or more, than the risk they were currently addressing.
Messaging the “Value” to the Value Chain
By getting into the heads of the end customer we were able to determine that their existing mindset exposed their business to a much bigger risk than what they realized. Using secondary research, the team put together a compelling data backed story that was built on insight (the unknown risk). That insight would then be messaged in different ways depending on where the story was being told in the value chain.
For the end customer, the story and message highlighted the value of protecting their customers and employees. The product manufacturer message to customers emphasized (with research and data) the risks and the potential business impact of inaction. The parts manufacturers received a message about the potential opportunity to double their business based on the new use of the product at the customer location.
Shifting from “Push” to “Push and Pull”
The biggest impact was the organization shifting its strategy from “pushing” their product through the part manufacturer to creating “pull” from the demand side. Marketing shifted its research efforts to the end customer to build a “use case” highlighting how to address the formerally unknown risk. Sales, backed with a solid business case of how to double revenue, realigned its focus from the part maker to the product manufacturer.
How to Apply this Approach to Your Organization
Schedule a two-day working session with representatives from sales, marketing, and the product group.
Prep everyone to leave their “company hat” at the door. The session is intended to have you think like the end customer. (e.g. How they think about their business, customers, competitors…not your product, service or brand).
Map in detail the go-to-market model.
List the reasons why the end customer buys the product or service. What “job does it do” for their business. This will require some research about the customer’s business. Do this in the session or have it ready ahead of time. Try to understand the customers mindset. This isn’t about why they should buy it from your partner or organization.
List the reasons why resellers or distributors buy the product from your organization (assuming you’re the manufacturer), and so forth back through the chain. Be brutally honest, for example, if it’s because it’s the “cheapest” then call it out.
Define the value added in the GTM model at each step starting with the customer working back from right to left in the model. Typically this is done from left to right.
Ask what are buyers missing at each step in the value chain? What should they know but don’t? This is the opportunity to develop a new insight and messaging.
Unlocking good insight isn’t easy. Coming out of the meeting you will have to continue to refine it. If you haven’t asked, and answered, “so what” at least five times you haven’t gotten to the core. If that doesn’t work, give me a call.
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Blockchain might be in the trough-stage of the “hype-cycle,” but there are some convincing arguments that blockchain will change things. These arguments are not, incidentally, dependent on the success of bitcoin or blockchain currencies generally. Rather, they are based on the compelling integration of a distributed ledger, smart-contracts and micro-payments.
I have a hunch, one that I’ll lay out in a minute, that this combination could have an impact on the B2B demand-gen space. Before that, let’s step back and look at the kind of blockchain use cases that are already underway.
There’s nothing particularly mysterious – or blockchain-dependent – about “smart contracts.” They’re already a part of our lives. When you step out of an Uber ride, you’ve executed a smart contract – with the help of the Uber platform and your credit card. When you close the door to leave your Airbnb you’ve executed another. When you buy groceries in an Amazon Go store, you’ve executed yet another.
From a user’s standpoint, what makes these contracts smart is that they focus your experience around the core satisfaction of your goal. Everything that’s not core is automated out of the foreground and into the background of your experience. The experience in other words, is more about what you want, and less about what you have to do to get it[2] . In a not unrelated extension of this point, what makes these contracts smart from a business standpoint is that they kick the stuffing out of incumbent business models and grab market share like a gangsta. Especially when network effects tip in their favour.
Now, clearly, from the examples above, you don’t need a blockchain in order to have smart contracts. So, what conditions make it helpful to combine the concept of blockchain technology (an indelible, distributed record of events) and the concept of a smart contract? The answer cited by blockchain experts is in conditions where there are numerous independent participants in a value chain.
Think, for instance, about the farm-to-table journey of a single bag of pre-washed lettuce.
Let’s run a speculative tally of independent participants in this value chain:
The primary producer who grows it and hauls it to the processing plant.
The processor/packager who buys the lettuce and prepares it for its journey to market.
The long-haul transport that moves it from the packaging facility to food terminal or retailer warehouse.
The food terminal or retailer warehouse.
The transport firm that moves it from warehouse to retail point.
The retailer.
The purchaser.
Potentially, that’s five different databases through which the record of that bag of lettuce needs to travel.
So what?
Well suppose that bag of lettuce is determined to have some E. coli problems. Tracing the problem back to source goes more quickly and certainly when all of these independent members of the value chain collaborate in a single system of record that tracks each skid of lettuce in an indelible, externally-validated way. (If you want to learn more about this sort of farm-to-table traceability, there’s lots written about it, like this essay in Medium.)
Now let’s overlay smart contracts on this case.
Let’s suppose the retailer knows that the progression of E. coli in a bag of lettuce is a function of (a) bacterial levels at origin, (b) the management of the cold-chain over the journey, and (c) the duration of the journey. Still assuming, say that the retailer is very interested in not having any customers getting sick, or worse, from ingesting produce purchased at their store. In that case, it would be in the retailer’s interest to orchestrate a system in which smart-contracts link compliance with source quality assurance testing, cold-chain standards (as measured by IOT sensors) and delivery-timing standards to payment.
Non-compliance with standards could produce non-payment. Performance above standards might produce incremental incentive payments. And once translated into smart contracts, this system of aligned incentives could operate persistently without much cost and effort devoted to enforcement, validation or back-office. This kind of thing is actually happening now and other examples are coming very soon.
Now that we’ve established the lettuce use-case as the basis for an analogy, let’s think about the number of independent participants involved in enterprise-scale B2B demand-gen. We’ll begin with software providers.
At last count, according to Scott Brinker, the marketing organization of the average enterprise employs 91 cloud services, and Sales uses another 43. To develop the analogy, think of the IP address of a prospective customer like a bag of lettuce, traveling through the hands of dozens of separate parties (the cloud-software providers) on its journey to a purchase from the enterprise.
Granted, these hand-offs happen very quickly because they take place in virtual not physical space. But they happen, and they certainly cost a substantial amount of money – paid for today mostly through SaaS subscriptions. (More on that in a moment).
Then there are the creative contributors. Most Enterprise B2B firms have some combination of agencies (plural), in-house contributors, and freelance talent. Are enterprises today able to truly connect remuneration with performance from those contributors? Attribution of marketing effectiveness (ROMI in industry jargon) is not yet an exact science. And that’s probably putting it mildly.
So then, what if an enterprise involved in B2B demand-gen were to approach the providers of both technology and creative services and ask them to restructure their compensation model into smart contracts instead of monthly SasS fees on one hand and, creative and professional services fees on the other?
Imagine a blockchain infrastructure, spanning the host of technologies that span the journey of a prospective buyer’s web-browser, from first contact to signed contract.
Imagine smart contracts arranged around indicators of progressive buyer engagement, executing micropayments for content that works, and software processes that help.
And imagine an incentive framework in which there’s no question that the work that matters is rewarded, and the work that doesn’t is of less and less concern to everyone involved.
Of course there will be many obstacles.
We will need a blockchain platform that is vastly more energy-efficient than the one powering bitcoin.
We will need a blockchain platform that is viable for micropayments at the fraction of a cent level and free of the transaction overhead levels associated with traditional financial clearing services.
We will need at least one determined and courageous enterprise to create the conditions for technology and creative contributors to join this loose-knit smart-contract consortium.
We will need a period of experimentation and learning.
And, perhaps most difficult, we will need the people in charge of those technology and creative firms to deliberately challenge their current business models.[3]
But, with the relentless drive for more accountability around marketing spend, it’s not hard to imagine how attractive it would be for an enterprise to focus [4] remuneration more directly around the core satisfaction of their goal, while everything that’s not core is automated out of the foreground and into the background of their experience.
No more agency hourly rate cards discussions.
No more scope-change discussions.
No more annual SaaS subscriptions.
No more “supplier lock-in” worries.
The enterprise will, instead, automate remuneration for both technology and creative services through smart contracts triggered by purchaser behaviour. It’s a “pay-for-performance” model with almost unlimited granularity, and once established, very low friction.
With seven thousand mar-tech software firms now competing for a share of the same B2B enterprise demand-gen budgets, it’s not hard to imagine that late-comers on the long-tail of this community would seek an invitation to the party by means of a business model shift. For the major SaaS players, smart contract revenue could offer a strategy for reaching a broader market, and for testing new offers.
With agency business models under pressure from all sides, there are clearly incentives for a change that better rewards creative excellence and expertise according to the value of its performance. Smart contract revenue could also buffer the revenue volatility inherent to businesses with a handful of big clients that come and go, since smart-contract revenues could continue to flow from content that continues to perform in the aftermath of a client’s departure.
Blockchain enthusiasts have suffered from the accusation that blockchain is a hammer looking for a nail; a solution looking for a problem. But in B2B demand-gen, we have pent-up stubborn problems at multiple points in the value-chain.
When we look at how the incentives of all these players align around this new model, there are reasons enough to imagine that network effects will eventually kick in, if someone can get this ball rolling. But what will it take for that to happen?
As noted above, we’ll need some new technology – specifically a blockchain platform that is energy-efficient and can handle micro-transactions at scale.
We’ll need a handful of firms in every stage of the value-chain who view their business model as an instrument of their strategy rather than an expression of their identity.
We’ll need a leader who goes first: An enterprise marketing leader who is willing to take the risk of creating a new paradigm for managing B2B demand-gen, in order to achieve persistently guaranteedreturns on marketing investment in both technology and content.
And, we’ll need a community of innovators, all across the demand-gen value chain, who want to collaborate on solving the novel problems that will come up.
So, there you have it – a back of the napkin (abeit a big one) sketch of a B2B Demand Gen Blockchain. Nearly impossible. Or inevitable. Or both. What do you think? I’d love to hear your thoughts.
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How far have we really come since the Cluetrain Manifesto? It’s sad to admit, but arguably true, that much B2B marketing still flirts with mediocrity. Why? Part of what contributes to the mediocrity is the tendency of B2B marketers to race towards “best practices,” seeking, paradoxically, to achieve brand differentiation by imitating the past practices of competitors and predecessors.
In marketing strategy, the perceived safety of doing what others have done is an illusion. “Best practices” are properly reserved for simple situations that can be dealt with according to simple categorical logic. Branding problems can rarely be reduced to such simplicity without overlooking dimensions of the situation. Sometimes those dimensions are critical factors in success or failure.
Once we acknowledge that “strategy by imitation of practices” has a poor prognosis, it’s a short step from there to go looking for a theoretical foundation for action.
Our theoretical foundation takes the form of a “dissenting opinion” towards a handful of (largely unexamined) theories that are implicit in practices and advice widely found in the B2B marketing space. At Carbon, we exploit this contrast as an engine of strategic differentiation for our clients. Here are 5 components of that engine:
1) People have a deep and profound need as social animals to belong to groups, to achieve and maintain status within groups, and to construct and signal identity in the context of these groups.
Few people would disagree, but just the same, this point of view on motivation is still mostly ignored in B2B marketing and sales strategies that emphasize rational business benefits. As deals get bigger, and buying committees get larger, the error of underestimating this factor in motivation becomes more regrettable.
2) Most of the time the human mind is operating in a state characterized by a fast, non-deductive, association-driven path.
This view, deried from behavioral economics, stands directly opposed to the classical economic imagination of people as “rational actors.” Something at stake in this dispute is our understanding of how we best achieve desired meanings in the mind of our customer. Should we focus on telling people what we’d like them to believe, or should we design a coherent fabric of associations and invite people to participate in constructing meaning from it? Most zig, we zag.
3) B2B buying is a group decision, and group decisions are chaotic and non-linear. On good days they resemble the pursuit of design problems. On bad days they resemble a garbage can.
This take on decision theory (and thus buying) stands in contrast to the (usually unexamined) assumption that business decisions are pursued in a logical process that begins with a stable set of identities, goals preferences, and advances in a straight line towards the optimization of outcomes. This assumption is perfectly aligned with the metaphors of “funnel” and “buying journey.” Just not with reality.
4) Experiences are meaning-making opportunities. Stimulus and response are separated by a meaning-making operation.
This stance is opposed to the mechanistic behaviorism that lurks beneath notions like “monetizing eyeballs,” “unique selling propositions” and “the b2b content factory.” Notions like these come and go, but the underlying assumption, for all its flaws, seems hard to kill.
5) Firmographics and role titles are more useful for counting potential customers than they are for building strategies that move those customers to action.
This stance contrasts the segmentation assumptions of most B2B marketing and sales organizations. We see that as limiting in two ways – first, it’s non-differentiating since firmographics and role titles are no mystery to competitors. And second this knowledge is not as helpful as people generally imagine in persuading prospective customers to adopt a belief or a behavior.
We don’t dispute that strategies resting on contrary philosophies have worked in the past. But looking forward, we see value migrating from tangibles to experiences. B2B buying groups will grow larger in the face of more difficult decisions. The pace of change and disruption will pick up. B2B commercial opportunities will increasingly be initiated by customers and mediated through inbound channels as the first point of contact. As a result, this is an environment that favors our “dissenting view.”
The experience of selling our house has been a good reminder of the importance of goodwill in the negotiating process.
We were fortunate to get a couple of offers on our home. Hearing feedback from our neighbors and realtors, we learned that one couple with young children really loved our home, especially the trampoline in the backyard!
As we responded to the offers we made it clear to the realtor of a family with the young children that we really wanted them to have the house. Our children, now in college, were a similar age when we first bought the house. The neighborhood was a great place to raise kids and we thought it would be nice to “complete the circle.”
And that’s when the trouble started. Our counteroffer made it clear that we were negotiating in good faith trying to meet the couple in the “middle.” Except they didn’t. They stood their ground forgoing the traditional comprise an approach to pursuing a “we win, you lose” stance. As an emotionally charged seller, I can confirm that this tactic did not go over well.
The disconnect was that we were selling a home full of memories which we wanted to pass along to another young family. As the buyers, they were just making a purchase decision at the best price as possible. It was a transaction for them. And with that, they took out all of the goodwill.
For example, the family was moving to the area from out of town. We’ve lived in the area for thirty years, 14 years in our current location. There are things that would have been helpful to know about our home, our neighborhood and our community. Our children attended the school their children will mostly attend. Played on the soccer fields, and in the school gyms where their kids will play. Insights from a resident on teachers, coaches, neighbors are usually helpful to someone new to an area.
Because they changed the rules of the game none of that conveyed. The relationship had been killed. Think about that when you’re negotiating a business deal. Deals are made between humans so emotions are involved. In the end, you may get your price but at what cost? What goodwill may have been lost? What could the seller tell you that could help with implementation, use of the product/service, etc.
The secret to a good deal is that both parties feel like they gave up something but that they also got something in return. You may feel good about the short-term gain — but by making the other party the “loser” it might cost you in long run.
It’s not unusual to find companies referring to their relationship with clients as “partnerships.” It’s common to find client logos on vendor websites. But how often do you see an agency or consulting firm’s logo on client websites? If you visit www.evepark.ca – that’s exactly what you’ll see.
Carbon Design, represented side by side with, a global architecture powerhouse, a world-class designer, and the project principal: the innovative green-tech engineering firm, S2E Technologies Inc. Under S2E’s leadership, these firms are inventing a new consumer category – one that integrates bold new ideas about housing and transportation – and radically resets the carbon footprint of both at the same time.
CASE STUDY
Did you know, that until recently restaurant owners only cared about the cleanliness of the food prep area? Most customers, and owners, assumed that if someone got sick after dining out it was because of food poisoning. That was until Carbon Design and Challenger Inc. helped “challenge” the norm by showing owners that half of the outbreaks in a restaurant were caused by people to people transmissions.
Now owners know where the “hotspots” are, and as a result, restaurant are cleaner than ever. Grab your face mask and enjoy a safe night out, but you may want to avoid the raw oysters 😉.
CASE STUDY
How do you do it? By giving clients and users what they want. Using the remaining budget that was to be used to update the site with the new branding we designed and built an entirely new site on a new platform. But audience needs are constantly evolving so the work never stops. Our team continues to audit performance and make improvements.
As a result, the two-year journey has paid off with the site being named #1 in the industry. Even more importantly, their key priority areas (site search, attorney profiles, etc.) were ranked in the outstanding category. Proving that excellence is a journey not just a destination.
