by William Walsh | Jul 12, 2022 | 2022
As previously published on 7/5/22 in The Drum
By Scott Gillum
Estimated read time: 5 Minutes
Somewhere along the way, B2B marketers have been “consumerized.” I’m not exactly sure when it happened, but I do know where to place the blame – MarTech companies.
Lacking the ability to prove that their technology can actually improve the performance of marketing programs, they have traded on the ability to do more. Their value proposition basically follows the line that in order to reach performance targets you need to go broader and more often…if you’re getting a 3% response rate, you need to reach the largest audience possible.
So let me help remind marketers that in B2B, it’s not always about reaching a broader audience. In fact, most times it’s not. After spending a dozen years in the consulting business analyzing customer revenue, I can safely say that in B2B, the Pareto principle is ALWAYS true, 80% of your revenue is coming from 20% of your customer base.
If you’re in certain industries, like financial services or one that targets the enterprise segment, the 90/10 may be the case. In fact, if you evaluate the “long tail” of customers you will most likely find that the smallest segment of customers (20% or less of your revenue) are most likely unprofitable.
Which begs the question, why do we need a platform to reach our smallest, least profitable customers? You know the answer…because we need the largest list so we can get to hit our numbers.
We are at a crossroads.
We are investing in going another mile wider, rather than going an inch or two deeper. To get the greatest return on our marketing dollars we should be focusing on the largest accounts, but we have acquired tools built for scale.
As a result, any success we have at improving conversion is always met with the same response; “Will it scale?”
Here are some other data points to help us guide ourselves back to the real world of B2B. Eighty-five to ninety percent of your revenue comes from the sales channels. Said differently, only 10-15% of the year’s revenue will have been sourced by marketing.
So what is all this investment in scaling buying us?
It keeps our performance metrics low because of the size and volume. A majority of our content marketing engagement efforts are with non-decision makers, and if we’re lucky enough to snag a buyer in mid-cycle, it only accounts for potentially 10-15% of revenue.
Because sales is smart enough to avoid small customers, we may end up creating a lead in an account that is actually costing the company money. Bottom line, the focus on scale often devalues marketing’s impact to the organization.
What should marketers do?
Marketing should be exploring better ways to motivate targeted audiences to take action. Everything we do as marketers is about getting someone to do something – open an email, register for a webinar, download a report, etc. None of our existing “scaling” tools help us understand how to make that happen.
To do this we have to understand audiences at a deeper level, beyond the “offer” which is most often not aligned to buyer preference. Let’s break this down into simple steps. A response is an action. An action is created by motivation. Motivation varies by individuals, based on their interest, but mostly, their personality.
Knowing a buyer’s motivations and behaviors by understanding their personality type is the key to understanding how to get them to take action. It’s that simple, and it gets even easier when you know that in every industry we assessed (9 so far) there are 1-2 dominant personality types that make up 65-75% of that audience.
Now to bring it all together…for most companies the top 20% of accounts easily represents more than half of the yearly revenue goal. If you are targeting the enterprise segment it will be higher. The top of the customer pyramid is often less than fifty accounts.
Focusing on going deeper into finding ways to connect with 1 or 2 personality types in less than 50 accounts doesn’t require scale, it requires strategy…it’s about being smarter and building a customized ABM plan for each account.
Embracing this approach offers B2B marketers a huge new opportunity to redefine their value to the organization, in particular, sales. Having success in those accounts far outweighs anything that requires scale.
Yes, many of the tools in the MarTech stack are useful, but they are not the answer and unfortunately, we’ve let them influence our behavior, decisions and activities too much.
It’s time to refocus our efforts from all potential contacts, to better understanding buyers in your largest opportunities. And, it’s time to stop resisting and deflecting opportunities that take effort to make real improvements by asking the question, “Will it scale?” Unless of course, if you’re Microsoft or Google targeting the SMB, then it’s perfectly fine to ask.
by William Walsh | Jun 29, 2022 | 2022
By Scott Gillum
Estimated read time: 5 Minutes
This is the first of four part series on how to navigate decision making blockers.
We’ve all experienced them, in our personal and professional lives – people whose first reaction to anything is to say “no.” For me, it was my father. I knew if I wanted to do anything or go anywhere as a teenager, it was going to be a battle.
“Blockers” come in all shapes and sizes. Most are born that way, others react to a situation or information, while others are of our own making. After studying how buyers behave in the purchase decision making process for the last three years, here’s what we’ve learned about how to make progress with Challenger personality types.
Challengers are skeptics
My dad is a Challenger. After saying no, he would follow up with asking why I needed or wanted to do something or go somewhere. Eventually, I figured out how to make a convincing case for myself through many frustrating years of trial and error.
I eventually realized that if I want the car to do something on the weekend, I’d have to start on Monday. Expecting a “no,” I’d come back with an argument (that would benefit him) on Wednesday, then involve my Mom on Thursday, and then by Saturday I’d be in the car on my way to the mall.
Much like my father to me, challengers are the scariest and most difficult buyers for young and inexperienced reps, for a number of reasons.
First, they don’t realize the “objections” they’re hearing are actually the Challenger’s way of gathering information. If they are actively engaging in a back and forth discussion, that is progress. When they stop challenging you, then you’ve lost them.
Second, reps have a tendency to give up mainly because they’ve run out of answers. You need to prepare for a duel, and arm yourself with the facts. Their goal is to exhaust you.
If you are currently blocked by a Challenger, you most likely haven’t convinced them of one or more of the following; 1) there is a valid need; 2) your solution is credible and best fits the need, and/or 3) the investment (including time) is worth the return/effort.
Here’s what you need to do next
- Your homework. Credibility is everything when wrestling with a Challenger. if you have not done your research on the company’s issues/needs and the Challenger, you need to do that immediately. Without it, you’re in a knife fight without a weapon.
- Do not use the words “new,” “innovative” or make claims that you cannot support with data or research. Again, this relates to your credibility. Give them an “anchor” reference. Instead of saying this will “revolutionize the way you do…” instead say “this is an evolution of the existing XXX but improves its functionality in these areas” and be specific. If you cannot solidly state or source evidence that it improves those areas…then don’t mention it. Also, have references of clients that have experienced those improvements ready to go.
- Talk moderate downside improvement vs large upside potential. One of the things that immediately shoots sales people in the foot is to make a claim that is too bold (improve productivity by 40%, increase profits by 100%, ROI’s of 400%) Being born skeptics, Challengers immediately will try to match your claim with their own beliefs and experience. Not only will they challenge your claim, they’ll pick apart, and it will go downhill from here. This is a sport for them. Instead, talk about risk reduction and/or cost savings. Buyers are much more open to believing the value and credibility of smaller claims related to risk reduction rather than large returns on investment or time.
- Never offer an opinion, instead lean in on making a logical argument. Your opinion doesn’t matter to them unless you’re credible (one of the reasons why they’re a challenger for young and inexperienced reps). Your response to their first question will determine whether you’re worth their time. Know that, and be ready. Lay out a logical argument that is relatable and believable. “Dad, I need to be at an event on Friday night, if I don’t have the car, then you’ll have to drive me.” Give them the opportunity, through options, to answer, or make the decision for themselves. (After a long work week, does my Dad really want to have to drive me across town at 7:30 pm on a Friday?)
- Prepare for a journey. Challengers are often the last hurdle to overcome, don’t let them stand the way of your deal. As I mentioned earlier, their goal is to outduel you. Do a dry run internally and anticipate where they will attack, get armed with data, research, use cases and references.
- Use other people in the buyer group to help sell them. Locate an “influencer” in the organization and arm them with the information they’ll need to advocate for your solution. Influencers enjoy the dance as much as the Challenger, but they are better at selling ideas than the Challenger is at rejecting them.
Are they really worth the trouble? Yes, Interestingly enough, once convinced these natural born skeptics will be one of your best advocates, and are the most powerful movers of the buyer group.
Why? Other members of the buying group are keenly aware of their skepticism, and as a result, they default to them as sort of a “due diligence officer.” Once the Challenger is convinced, the others fail in line.
Lastly, if you are in certain sectors of technology, finance and life science industries know that every other person you speak with may be one of these personality types. There are no easy wins. Do your homework, stay persistent and win these people over because if you do – they’ll also be your most loyal customer.
by William Walsh | Jun 2, 2022 | 2022
By Scott Gillum
Estimated read time: 3 Minutes
One of the biggest concerns for marketers is watching their hard work doing buyer research, positioning and messaging fall apart in the last mile….when the rep speaks with the prospect or customer.
In fact, I experienced this first hand last week.
A BDR for a PR firm reached out to me a few weeks ago after listening to a recent podcast I did on a well known show. Their email immediately captured my attention by stating they believed we had a story that would get the attention of national publications.
Not having a great experience using PR firms in the past, I was ready to hit delete until I read the next line that said, “we know that 85% of buyers that have used PR firms report not having a good experience, it’s why we have a pay for performance model.”
Now they had my interest, and I agreed to a meeting. In the weeks in between, I received nurturing emails containing links to testimonials, recent stories placed, and assurance that they could do the same for us, including this from their email;
“Our team has done extensive research on your project and is excited to guide you towards more success.”
Up to this point, all good work by the marketing team.
Last Tuesday at 2 PM, I had a call with the “Client Director.” He explained their unique model, working on the “buy” side with publishers which gives them insight into the stories publishers want ( a nice piece of positioning) which sold me, and I was excited to know what they heard in the podcast that was newsworthy.
And that is where it ALL fell apart. The rep hadn’t even listened to the podcast and apparently didn’t talk with the BDR to find out the details. He literally had no clue.
After the rep stumbled to make something up, and then called us a “tech company” I ended the conversation at 2:09 PM. All the previous great marketing was wasted by a rep that didn’t do his homework. The final steps of the last mile left untraveled because the rep thought the journey was over.
by William Walsh | May 24, 2022 | 2022
As previously published on 5/17/22 in The Drum
By Scott Gillum
Estimated read time: 5 Minutes
Fred Reicheld developed the Net Promoter Score in 2001 using a single survey question asking respondents to rate their likelihood to recommend a company, product, or service to a friend or colleague.
Since then, NPS has been adopted and widely used by corporations as a Key Performance Indicator (KPI) but, there is one key piece missing from many organizations that would make this important metric an even more powerful indicator of performance.
What’s Missing
Ironically, the answer to the question, “Would you recommend the company, product or service?” is rarely tracked. Organizations place a tremendous amount of focus on developing, interpreting and reviewing the results, yet spend little to no time tracking the measurable proof the referrals.
Depending on where one sits within the organization, there are various reasons as to why this happens. If you’re in marketing, referrals just aren’t a focus. CMO’s are more concerned with tracking the results of their team’s outbound activities and the return on their spend.
In sales, inbound referrals are often coded as rep generated leads, or no source is given. Why? Because reps have a quota to hit and want credit for creating and closing self generated leads. Inbound referrals (aka, “blue birds”) are high quality and the quickest opportunities to close.
For customer service, the focus is more aligned with efficiency metrics, and/or the team receives no credit for inbound referrals, even within accounts.
Regardless of what part of the organization reps are in, like everyone else, they capture the data relevant to how they are being measured, which often doesn’t include inbound referrals. There is no close loop, and as a result, it leaves a gap in the organization’s ability to link the real impact of NPS on performance. We only get half of the story.
Why It’s Important
The genius of NPS is that it’s a simple and straightforward one question survey that measures the performance of the entire organization (from marketing to product, sales and through customer service). It encompasses the entire customer experience and journey.
It’s also a great indicator of brand health. The customer feels a connection to your organization, strong enough to put their personal reputation on the line. Think about that for a minute… they’re willing to risk their credibility for a promise that your organization will fulfill or at least that’s the theory of net promoter.
This highlights why actual referrals are a more important performance indicator than NPS – the person making the referral (and we know who they are) is one of your most valuable customers. By making the referral, the customer is validating their connection to your brand. And according to the research, that connection means more than just a referral for at least two reasons beyond the obvious.
First, they are twice as likely to pay a premium for your product/services, and second, they are more likely to advocate for your brand (which they just demonstrated with the referral). Not only are they the source of potential new customers, they are also the key people to advocate for your solution or company within the account.
Referees are key to starting and moving the internal buying process…but only, if you know who they are by capturing that information, which too many organizations fail to do.
Tracking referrals should be a corporate KPI because it cuts across the organization, and as a result, has to be driving it from the top down to eliminate the gaps I pointed out earlier.
Keep in mind, you will also have to motivate reps to capture the information and give them an incentive for asking for a referral. Assign a higher value to referring customers given their importance, and then begin to estimate the amount of inbound revenue in your annual forecast.
Creating a goal in your forecast will drive the active management of referral tracking. As mentioned, these are your most valuable leads so be proactive versus just let the “bluebirds” leads come in.
For marketers, especially if you are in the tech sector, this presents an opportunity to track word of mouth. The top four most used and credible information sources for buyers are people oriented channels (peers, influencers, consultants, etc.).
Finally, reward customers who put their reputation on the line for you. They see something in your brand that connects to them at a personal level, find out what that is, and reinforce it because not only is it the reason they’ll advocate for you, it’s also key to their loyalty…but that’s the topic for another post.
by scott.gillum | Aug 6, 2021 | 2021, Business Trends
As previously published on 8/5/21 in The Drum
by Scott Gillum
Estimated read time: 4 Minutes
Years ago, doctors treated gastric ulcers as a chronic disease, most likely brought on by stress or spicy foods. As a young pharma rep carrying the world’s first billion-dollar drug in my bag, I’d actively promoted how this wonder product could relieve the symptoms for their ulcer patients.
That was until the day I met a doctor who questioned why we weren’t selling a drug to cure the problem. It was a very valid point, one that would not be fully understood until a couple of years after I left that job.
Given the success of that drug, other similar products would soon follow, all for the relief of ulcer symptoms. Pharma companies followed the money, rather than investing in developing a cure.
Recently, I recalled this memory while looking at Scott Brinker’s Martech Landscape, which now includes 8,000 companies. There are companies investing millions of dollars into B2B marketing technologies that have hardly moved the needle on marketing performance – tools created to treat the symptoms of poor performance rather than fix them.
This issue has persisted for years. Performance should be improving by now, unless we’re missing something.
Here’s an example: ask a salesperson to describe their ideal buyer in detail and this is what you will likely hear. They want more buyers who are ‘risk-takers’, ‘innovators’, ‘people who are looking to make a name for themselves’ or ‘big-picture thinkers’.
What you won’t hear is prospects who are ‘technical buyers’, ‘budget holders’ or the ‘CEO’. Do you see what we are missing? Sales reps are describing personality attributes that make prospects ideal buyers, not their role, title or budget authority. The martech stack doesn’t capture those descriptors.
Still not convinced? Ask a salesperson why they lost a deal when they should have won it. You’ll probably hear “they had an existing relationship” (trust) or “they have used the solution/service in the past” (security). These are emotional decision drivers also not capturing or seen in CRM tools.
Get at the cause to find the cure
There is a buyer’s journey that is hidden. Our sales and marketing tools are not built to capture, track or provide us with insights into what to do about these ‘soft’ factors that impact deals. And it may be more important than anything we are tracking or measuring today. It’s time, like the doctor I encountered all those years ago, to ask the question of why we aren’t fixing the problem.
In 2005, a couple of Australian researchers named Barry Marshall and Robin Warren were awarded the Nobel Prize in Medicine for their work on linking the bacteria Helicobacter Pylori to the formation of gastric ulcers. They won this coveted prize after spending decades trying to convince the world of their discovery, even coming to a point where Marshall ingested H. Pylori to prove the causation to ulcers (it worked, he developed an ulcer three days later).
Marshall’s research was hugely disruptive and would eventually lead to the demise of a multi-billion-dollar therapeutic class of drugs. Their joint research in the late 80s was discredited for years, until the first drug of its type (the one I promoted) came off patent. Suddenly, gastric ulcers could be cured by prescribing a common antibiotic (which, ironically, was also manufactured by the same company).
Millions of dollars have been invested into martech tools, yet our sales and marketing performance have not improved. This industry is thriving by treating poor performance as a chronic disease – developing tools to keep the focus on extending reach and increasing scale, not on improving conversion rate or return on effort and investment.
Just as Marshall and Warren used postmortem research and forensic medicine to link the cause and effect of H. Pylori on the body, we are doing the same with breaking down deals closed, both won and lost. We are starting to get at the ‘cause’ – and to find a cure.
What we’re finding doesn’t necessarily match with the conventional wisdom of the day. Intent data may not actually show any real intent. Lead nurturing programs may be set up to nurture prospects that will never become leads. Campaigns may be targeting ‘buyers’ who are actually the exact opposite, a personality type that is more likely to kill a deal than help to close it.
It’s called personality-based marketing, and it has the promise to cure our ills… but please don’t make me ingest a lead to prove it.
