by scott.gillum | Aug 5, 2014 | 2014, Sales
The team killed it. The presentation was flawless. The proposal was outstanding. You covered all of the bases, but you lost. Searching for answers, the only thing you can think of is that the other guy must of “bought the deal,” right? In the article entitled; Why B2B Sales Leads Don’t Convert (and Who Is to Blame) Marketing Profs.com highlights a recent survey of close to 200 marketers, sales professionals, and president/CEOs on their thoughts on why deals were “lost.” Not surprisingly, 60% said that “price” was the main reason, but what may surprise you is that percentage is wrong. 
To truly understand why deals are lost, you have to get feedback from buyers. Having conducted numerous post mortem analysis of lost deals, and buyer behavior research, here’s what I have learned. Roughly one third of all buyers consider price as one of, or the main driver of a purchase decision. Pure price buyers represent about 5-10% of all decision makers. The remaining portion (20-25%) are value buyers who may, but don’t always, buy the lowest priced product or service. Using those numbers, the research overstates “price” as the reason for a loss by a factor of 2X. What accounts for the remaining thirty percent? Here are three common reasons for losing a deal, that doesn’t involve price.
- Low investment in the relationship – deals are not solely rationally made purchase transactions, especially as price and product complexity increases. Selling bigger ticket items involves a degree of trust built between a vendor and a buyer. Recent research by Fortune and gyro found that 65% of executives believe subjective factors that can’t be quantified (like a company’s culture and values) make a difference when evaluating competing proposals. Even more executives (70%) said that a company’s reputation was a critical consideration in the decision making process. Investing in relationship building with buyers takes time but as the research shows, it’s worth it. If buyers say that the only time they hear from a rep is when he/she wants to sell them something…that investment is not being made.
- Focusing on the wrong message – focusing on only selling the business value (functional benefits, business outcomes) of a product limits sales ability to make the case for a higher price. Connecting the value the product delivers to the buyer, on a personal level, helps reps broaden the conversation. According to CEB research, not only are you twice as likely to win the deal by focusing on personal value drivers
(professional and personal benefits, like a promotion, admiration from peers, etc.), but also, buyers are eight times more willing pay a premium. To do this effectively sales people need to be able to put themselves in the shoes of decision mak ers. They need to understand their buyers’ situation, role, relationships, etc., and sell the value of the product or service to those unique needs. If reps only know how to sell “feature functionality” the conversation will all too often come back to price.
- Missing the real buyer – there is no guarantee that past buyers will be key decision makers in future purchase decisions, or on other types of products. Years ago, I did a post mortem analysis for a medical equipment company on an innovative new product. Sales said they were losing deals because it was priced too high. The analysis proved that they were both right, and wrong. The traditional buyer, did in fact, believe that the product was priced too high compared to others in the market. But a new set of users who had become the primary decision makers had emerged. This group was using the innovative technology as a revenue generating procedure. As a result, they valued the product differently and were willing to pay a premium. Deals were lost because the company didn’t understand how buyers intended to use the product, and as a result, they missed the key decision maker.
The simple answer is that deals are lost because the case for the value of the product or service has not been adequately expressed to meet the needs (professional, personal or both) of the key decision maker. Blaming “price” is a convenient crutch that shifts accountability to the product or pricing team, and away from sales and marketing. Finger pointing may make us feel better about our role, but it doesn’t fix the problem. If you are truly intent on increasing win rates dig deeper into understand why, I can guarantee you won’t find that it is “price” 6 out of 10 times.
by scott.gillum | Jan 28, 2014 | 2014, Marketing
In December, I had the opportunity to be the Keynote speaker at the Bowery Capital CMO Summit in NYC. The event featured a number of high profile CMO’s speaking with an audience of mostly early stage startups (under 20 employees).
My presentation was based on the recent Forbes blog post Everything We Thought We Knew about B-to-B Marketing in Wrong. The audience also included some local media, a reporter from CMO.com wrote a summary of the speech.
http://vimeo.com/82457497
by scott.gillum | Dec 2, 2013 | 2013, Marketing
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.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
by scott.gillum | Mar 13, 2013 | 2013
I joined gyro in 2010. At that time we were called GyroHSR, and were a collection of 9 small to mid-size agencies from around the world that were part of a roll-up. We didn’t share a common language, system or culture. What held us together was a vision of being the world’s best B2B agency.
The first year was challenging. I came into the ad business from the outside. My experience had been consulting and marketing services. I naively thought it would be an easy transition, that my world and this world weren’t that far apart. I was wrong. Everything seemed to have a learning curve, I spoke a different language and the other side of my brain, long neglected, needed to be developed.
Over the next two years almost everything would change. We dropped the “HSR” and became known solely as gyro. Our investors brought in a new management team and our new CEO & Chief Creative Officer, Christoph Becker would completely remake our creative teams across the network. But most importantly, Christoph would change our culture, our language and our focus. And along the way, the right side of my brain began to develop.
During this time, we undertook two intiatives that I think have set us up for the success that we are enjoying today. The first, was that we believed that “b2b marketing” as we knew it, was “dead”. Targeting a business buyer by a title, at a business address, during business hours, was an antiquated concept. We would later prove that to be the case with our @Work State of Mind research conducted with academic institutions and Forbes (click here for the research report).
The second was that ideas needed to be “humanly relevant”. That behind every business decision maker was a person, and that person made decisions based on emotions. Our research would show that the buyers journey was, in fact, a very rational process up until the point of the decision…and then emotions took over.
It became easy to differentiate ourselves from competitors, and clients/prospects believed in what we preaching. As the wins starting coming, our culture started to align around what we call UNO. One language, one process, one culture, we became unified across the network. Client teams from across the world began working together to deliver the best ideas and outputs, regardless of the location. Our work starting winning awards, and the world started to notice.
What’s different about BtoB magazine award today, isn’t necessarily that we’ve been recognized, gyro has won awards in the past. But rather it’s an external validation point that we are on the right path, and the hard work is paying off. We won in the “Large” agency category (our first year in that category), going up against the “best of the best,” like Ogilvy. It’s a litmus test that our vision of being the best B2B agency in the world, and the reason why most of us joined gyro, is being realized, at least in the U.S…and at least for this year.
We not done yet, we still have work to do and clients to dazzle, but for now…we’re Numero UNO, and it feels good.
