Let us know what you think. Are outbound sales dead? Do leaders use technology as a ‘silver bullet’ to try and fix sales, marketing, and the customer experience?
A couple years ago during Gartner’s Sales and Marketing Thought Leaders roundtable, I asked the group, “Do we really need sales anymore?”
The question was in response to research Gartner shared about the challenges facing sales in gaining a consensus from the internal buying group to move forward with a purchase decision. This insight, built on top of the previous CEB (now Gartner) research showing that buyers are 57% of the way through the sales process before engaging sales, prompted me to think about their effectiveness.
Knowing that half of the room was filled with sales thought leaders, I asked the question in jest to provoke a lively conversation. This year, after seeing Gartner’s latest research on B2B sales, I asked the question again with a twist, “Do we really need outbound sales anymore?” This time it wasn’t meant in jest, it was a serious question about the value of a Sales Development Rep (SDR).
SDR’s according to Payscale, earn on average of $42,000 a year to “make outbound sales by reaching out to clients to obtain leads and schedule appointments for the sales team.” They are the voice on the other end of the phone after your download information off a vendor’s website.
The data point that caused me to question their value is based on how little time buyers spent speaking with sales during a purchase decision. In 2017 Gartner found that only 17% of a buying group’s time is spent with sales. In the latest meeting Brent Adamson, vice president at Gartner, shared that in the most recent research the number is now down to 16%. And as you might have guessed (based on the 57% data point mentioned above) most, if not all, of that time is spent at the end of the buying process.
That leads us back to the SDR. Their role is aligned at the front end of the process. Perhaps you could argue that they play a valuable role in creating leverage for the more seasoned and costly sales executives by screening inquiries, and as the definition describes, scheduling appointments for the sales team.
So, let’s explore how effectively they perform this role using a recent experience I had with an SDR of a SaaS company. We were running an RFP bid process for a client. As a mid-market company, they are looking for an online collaboration tool that fits their unique needs. We collected a list of potential providers and I came across an additional vendor late in the process. Here’s my actual email exchange with the SDR after I signed up for a demo.
You guessed it, he didn’t make it happen. As a result, I didn’t have the information needed to add them to the list. If his organization had allowed me to view the demo on their website without being screened, they may have been included in the bid.
Ironically, the well-defined lead qualification process the rep was following killed the deal before he was able to qualify the opportunity.
I’m not alone in my experience. Gartner’s research asked buyers to define the factors that contributed to a “High Quality, Low Regret” deal. In other words, what factors contributed to them feeling like they made a good informed decision.
Interestingly enough, the factors that made buyers feel less confident about their purchase decisions are directly tied to the seller, specifically buyers didn’t trust them to provide all the relevant and/or unbiased information needed to feel well informed.
On the other side of the chart, buyers commented that they felt confident in their ability to ask the right questions, collect the right information and draw out the insights needed to make a good decision.
Now the dilemma…
We are at the intersection of inbound marketing and sales engagement.
With the increasing sophistication of content management platforms and the risk associated with the sales person negatively impacting the information collection process, we face two very strategic questions for sales and marketing executives.
The first — where do you draw the line between allowing the customer to direct themselves to the right information needed to make a “high quality and low regret” decision and inserting the SDR to help guide them?
The second — when do you do it? Do you allow the buyer to self-identify and request help or do you proactively reach out to them?
The answer may come down to simply how you view the process. If it is truly a “buying process,” then the buyer is in control. You allow them to go as far as they need and allow them to reach out to sales.
If it’s viewed as a sales process, then you reach out to them and help them find what you think they need, which according to the research, is the riskier path.
Based on my experience, I think the answer is clear. And if you believe that sales is a “numbers game,” then the numbers in the research are not in favor of outbound sales.
Let the debate begin.
To hear the interview with David, listen or download here.
Clients have complained about it for decades. Agencies have been wrestling trying to find a new model for years, but yet it still exists. Partly because they know that abandoning it will require them to move to fixed fees, and most likely fixed timelines, and that is more risk than they can, or want, to stomach.
Before I start highlighting why the billable time model doesn’t work, let me tell you when it does — with a caveat. In my seven years working in this environment, I can say I have only seen the model work effectively for the client once. Here’s what it took to make it work.
The client had a pipeline of projects – the client went through a process of consolidating marketing budgets to move to a single agency retainer. They then identified enough projects to fill the agency capacity and smalls one off efforts to cover production gaps when the priority projects were delayed.
They put the basics in place – knowing that efficiency is essential for optimizing a retained relationship they had the foundational building blocks for developing campaigns. The client had their audiences defined, value proposition and messaging tested, and an approved media budget with CTAs. You want as much of your marketing dollars going to execution as possible. Don’t burn agency fees on the basics.
Quarterly reviews – they set clear priorities each quarter and conducted quarterly reviews. Learning what worked, what didn’t and why/how to improve in the next quarter. Typically, no month goes according to the plan so they had budgets rollover month to month and a defined point to reconcile fees.
Built in flexibility with “on demand” resources – a core client team was defined with “specialized” skills that were “on-demand,” not dedicated. They used contracts/freelancers on their team to pick up work that may come in “over the transom.”
Strong management of the relationship and retainer – they took an active role in managing the relationship with the agency, with a dedicated agency team that included ex-agency people. One person prioritized and managed the work internally before it went to the agency. That person was the central point of communication, consolidating feedback and restricted others from contacting the agency with requests or changes.
If this doesn’t sound like your organization, let me share with you what you’re up against and why the billable time model is not in your favor.
The production process – flexibility gives agencies problems once you’ve committed to a retained team and defined work. Think of it this way…let’s say you hire an organization to build a car. The company gives you a price to build it. Sticking to the production schedule the car will cost you exactly what you contracted. The problem in marketing is that few things go according to the production schedule. Issues with approvals and getting content or legal feedback within the defined time is often the exception rather than the rule. So, let’s say your car is making its way down the production line and it gets to the person who is handling the windshield install but the windshield isn’t there because the size and shape wasn’t approved. As a result, the entire production line is now slowed, or the car is taken off the line so other cars can progress. Either way, costs are now being incurred due to the delay. This is what happens when marketing assets are being created. A client doesn’t approve an image on time so when the agency production schedule has the image retoucher scheduled to work on the image, it’s not there. The image retoucher is then reassigned to other work and this task goes back into the scheduling pool, causing delays further down the line.
“Microspecialization” – perhaps you’ve noticed that your team has blossomed with “specialists.” For example, content development; long form, short form, digital, technical writers, etc. A good writer is a good writer, or at least one would think. If you are working with a large agency they will have the luxury of having broad skill sets in house or contracted. These “specialist” are assigned to work on multiple projects. Their time being divided among 5-7 or more projects during the week. Let’s go back to the production line analogy. The work is progressing down the line, now there are twice as many stops as in the past because of the microsegmentation of the work and skill sets needed to complete it. This means we have twice as many people to schedule, coordinate calendars and manage handoffs. Let’s say the main copywriter creates the campaign content that moves to the digital copywriter to chunk it up for the website. Then, it’s off to the short form writer for emails, and the technical writer for the sales sheet. You get the picture. Each step is a handoff, an opportunity or risk to come off of message, change the tone, or lose the intent, etc. All which result in burning more hours to fix.
Efficiency and creative – speed is the enemy of the good, not always, especially in a billable time model. Being more efficient is not necessarily aligned to a billable time model. There is no incentive (beyond due dates) to move work quickly or efficiently. If a creative is assigned to spend a half day working on a banner ad and can complete the task in a hour…“work expands to fill the time for its completion” as they say. Agency folks have to meet a certain threshold of billable time, similar to attorneys. This is not all bad. To be fair, you want to allow the creative team to have the time to well, be creative. Rushing the creative process can produce poor outputs but it is often times at odds with efficiency. More on this later…
Revenue recognition – for an agency to recognize revenue they have to have time billed against it. If you have a $100K a month retainer, for example, you will get a large team. It starts out with good intentions. Agencies will assess the work to be done and then assemble a team to do it, that’s how the pricing model is built. But the model is built in a vacuum based on previous client engagements. It allows agencies to assign and/or hire resources. Once the team is constructed and the real work begins, the team may or may not be aligned to capacity needed. However, it is aligned to the capacity needed to fill out timesheets to justify the fees.
You, the client – yep, you are complicit in this problem. To get the most out of your relationship (and money) you need to take an active part in managing and partnering. Consolidate feedback internally, force internal stakeholders to make decisions and tradeoffs. Stick to and/or set realistic timelines and expectations. Do your homework and have as much of the prep work done prior (more on this below) to selecting or working with an agency partner. You know that time is literally money (your money) so be active in finding ways to be more efficient. Agencies do their best work when there is clarity on goals/objectives and communication.
Here’s the funny thing — the billable time model doesn’t really work for agencies either. It restricts growth, creates rigidity, causes inefficiencies and counterproductive employee behavior. So why do they keep it? Because it protects them from you.
Marketing can be messy and managing clients can be challenging. You miss a deadline or change a deliverable, and here comes the change order. To abandon it would require discipline, analytic rigor, and STRONG client and project management skills, which few possess. The billable time model is the devil they know, but unfortunately, can’t kill.
Marketers, channeling their inner Maverick (Tom Cruise’s character in ‘Top Gun’) often find themselves thinking “I feel the need, the need for speed” but are plagued by internal speed bumps and stop signs. Little do they know that buried in Jeff Bezos’ annual shareholder letter is an approach for helping them accelerate marketing efforts, and navigate past internal road blocks.
Working with hi-tech clients, I learned the necessity for quick execution. Pipelines must be filled, leads progressed and converted, and quotas achieved. IBM had two “mantras” when it came to accelerating marketing execution. The first was the rule of “70%” and the second was “Fail Fast.” Once you had roughly 70% of what you needed (information, insight, etc.) to execute you then got into the market, letting the results refine your program and thus quickly course correcting. Built on the idea of the yield curve, the greatest gains in progress were made during the first 70% of effort, refining the remaining 30% being too costly and time consuming.
“Failing fast” was built on the idea of quickly testing “concepts” or theories. If IBM wanted to experiment with something new or different it would construct tests to quickly measure results to either scale or kill the program. These two guide points have influenced my thinking over the many years.
So it was interesting to see Jeff Bezos picking up on these same principals in his annual shareholder letter. Except he added his own twist. In his letter he warns of becoming a “Day 2” company. He defines Day 1 companies as obsessed with customers, skeptical of proxies, eager to adopt new external trends, and perhaps most importantly, their ability to make high velocity decisions. For him, Day 2 companies become static, quickly becoming irrelevant and out of business eventually. The key to staying in “Day 1” is the ability to move quickly, experiment patiently, accept failures, and “double down when you see customers delight.”
Bezos believes that there is no “one-size-fits-all” to decision making but rather “two-way doors” where decision can be reversed. Those decisions in his words use a “lightweight” process. It starts with what he phases as “disagree and commit.” Given the growing number of stakeholders in the decision-making process, could this be the secret marketers have been searching for to eliminate speed bumps?
As Bezos describes it, “If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, ‘Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?’ By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes.”
Giving the success of Amazon, this is a piece of advice we should all heed. For marketers, the key to making this approach work is “conviction.” It means doing your homework, having the facts to support your point of view, and the courage to take a risk. Going fast brings with it the risk of failure, but as Bezos states “being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
And Mr. Bezos knows a thing or two about flying fast. On the day he released his annual shareholder letter, Amazon stock closed over $900, up 50% over the year. Need any more proof that this “maverick” got it right?
A few weeks ago, I participated in an interview with CEB‘s new Marketing Solutions group. The focus of the article, as they described it, was to “understand what it takes to have a healthy client-agency relationship.”
The article was published in their July monthly newsletter to members. CEB was kind enough to allow me to share an excerpt of the article with my readers (see below).
We asked agency leaders from key partners in CEB’s recently launched Marketing Solutions* effort to answer the question “What key relationship-building steps do clients most often overlook?” Below you’ll find our curated list of top overlooked steps:
Make Sure They “Get It”: No matter how well the agency knows your industry, there needs to be discipline on both sides, ensuring the agency invests time getting to know your business, customers, brand, and the expectations of key stakeholders.
Keep the Creative Spark Alive: Saying “no” too many times or being too directive can kill a client/agency relationship. You’re looking for a fresh perspective, not a passive, tactical partner. Challenge your agency to do at least one wildly strategic or creative thing for you each year, something that might even make you a bit nervous.
Be Constructive: Creative teams invest time in understanding a clients’ issues/objective and then brainstorm on possible solutions. Keep in mind that it’s not what you say, because agencies need your input, it’s how you say it. First be complimentary, what you like, and then give notes.
Don’t Miss the Magic: Too often RFP’s are focused only on qualifications and price. The real magic in an agency relationship is how well you work together. Be mindful of the way your teams will work together—and bring out the best in each other—that will really make a difference.
Understand Limitations: A good creative campaign can change perceptions about your brand, products, and even service capabilities. However, it is the burden of the organization to deliver on the “promise” being communicated. Be realistic of what your agency partners can and cannot solve for.
Agency’s Ability to Help You Bust Internal Silos: Assess agency candidates for their understanding of key partner functions (like sales, service or operations) and their ability to help you bring those other partners into creating seamless customer experiences.
Agency’s Ability to Disrupt Your Customers: Winning marketing efforts disrupt what customers think, believe, and assume about themselves (not about you). Bottom line: pressure test your agency’s empathy—the ability to go deep into how customers think about themselves and their own world.
Additionally. CEB is now providing execution support on B2B go-to-market messaging and content creation. They’ve partnered with select agencies, like gyro, to offer engagements that help create messaging and content that reflect the latest insights from CEB’s B2B buyer and best practice research If you’re interested in learning more, send me a note.
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.
CASE STUDY
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.
f what you needed (information, insight, etc.) to execute you then got into the market, letting the results refine your program and thus quickly course correcting. Built on the idea of the yield curve, the greatest gains in progress were made during the first 70% of effort, refining the remaining 30% being too costly and time consuming.
