by scott.gillum | Jun 10, 2014 | 2014, Marketing
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.
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.
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.”
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 | May 12, 2013 | 2013, Sales
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.
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 & Goals – take 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 Behavior – recent 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:
- Active Pipeline Management – The 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.
- 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.
- 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.
- 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%).
- 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.
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.
by scott.gillum | Feb 19, 2013 | 2013, Marketing
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.
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.
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.
by scott.gillum | Sep 21, 2012 | 2011, Marketing
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:
- 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.”
- 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.
- 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.”
- 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.
- 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.”
