5 Steps for Getting the Most Out of Sales & Marketing Data

by | Jul 18, 2012 | 2009, Marketing

Original post date March 6, 2009

Tell me if you’ve seen this movie before. After spending months debating about the right type of segmentation to do, you finally agree, do the research and…it never gets used. Or how about this one, you get a request from sales for information you’ve already sent to them…multiple times.

It’s a horror movie and it gets play out every day in organizations all across the country. Why is it that we want “data” but then we don’t end up using it?  Based on my experiences with clients, I believe it comes down to few common problems that are manageable, if known.

The top 5 problems I see:

    • Actionable Insight – as in the lack of it…it’s the #1 reason why data doesn’t get used. Far too often the Ph.D’s will put out data without having interpreting it for the intended audience which then sets up the next problem.
    • Language/Communication – call it taxonomy, communication style, whatever, data folks and everyone else (in particular, sales & marketing) speak different languages.
    • Overload & Timing – yes, analysis paralysis does exist but not the way you might think. If you’re in a data rich environment, you’ve probably experienced this. Just too much info flying around and as a result, it often gets ignored. It’s not that it causes people to not take action, as much as it is people taken action and ignoring the data. In other situations, especially involving marketers, it may be a matter of timing. They may be in too much of a hurry to get something out the door to wait on the data.
    • 60-70% Complete – critical pieces are sometimes missing so you can’t see the insight. The dots haven’t been connected. The person responsible for supplying the data doesn’t, and/or wouldn’t, see the connection.
    • Skill set – CMO’s when asked the top reasons (see the chart in the post below) for the need for new skills in their organizations mentioned; “greater segmentation of market” and “increase demands for analytics” in their top 5. The problem is that there aren’t many of them out there.

Why is this important now?  Because everything you do or want to do, or are thinking about doing, will have to be backed by data in this economic environment…you’ll need a rock solid reason for getting, or spending a budget.

Five things to do about it:

    • Apply the “So What” rule – yes, this rule is typically used to help define a feature from a benefit but it’s also effective at drawing out insight from raw data. If the data guys are presenting information that you don’t “get” ask them “so what?”…as in, what is this data suppose to tell me? And keep asking until you get to the “so what.”
    • Help connect the Dots – if the story is missing help supply/coach on how or where to connect the other pieces. If you’re the user know what you’re looking for and provide guidance on where to find it. As I mention above, researchers may not know or wouldn’t understand the connection. This also applies to coaching on communication. Help them understand the language you speak.
    • Chunk it up – sometimes there is just too much to take in and process. Chunk information into more digestible pieces. Take some time and think about what various groups can digest and how often…especially if you’re in a data rich environment.
    • Provide plenty of lead time and direction – don’t expect to get something insightful and/or useful if you don’t give adequate notice or direction. Getting a report on market share won’t tell you how to increase it, or why you’re losing it. Combining trended quarterly market share, key consideration drivers, and sales coverage will…but it takes time to collect. Know what you’re looking for and how to get it.
    • Hire an expert – as was mentioned above there is more demand than supply of talented people who can pull insight out of data and drive action from the insight. If you have to, partner with a vendor. It should also help with the timing/speed issue mentioned earlier. Additionally, they will have tools/approaches that help force out insight.

Data…leads to Insight…leads to Action…leads to Data…the cycle of life. It’s time to turn this horror movie into an action thriller.

What a Girl Scout Can Teach Us About Selling

by | Jul 18, 2012 | 2009, Sales

Original post date January 12, 2009

Last week I had the pleasure…to my surprise…of hearing my 6th grader work the phone selling Girl Scout cookies. She’s been a Girl Scout for a number of years and has achieved “Cookie Diva” (Cookie VIP this year) status numerous times by selling more than 150 boxes of cookies. Although I had helped her over the years by selling some cookies at work, I never actually got to hear her sales pitch, until last night.Sure, it’s hard to resist a Girl Scout selling cookies, but as a sales and marketing consultant for the last 12 years, I was struck by how well a simple, honest approach to selling worked. It was an interesting and enlightening 30 minutes.

Here are some of things I heard:

  • Niceties/Pleasantries – started every conversation with “happy new year”, and talked about their holiday, children, etc. She invested the time in catching up with them even though she had limited time to make calls between homework and bedtime. She didn’t jump to “getting the order.” It made me think about how often I rush through this important step because of time constraints, pressure on revenues, and/or proposals. If customers think that the only time you call them is when you want something…this certainly confirms it.
  • Customer Knowledge – no sophisticated databases, profiling or scripts. She did her homework by knowing what they ordered last year, what girls were no longer Girl Scouts, etc. which made it easy for customers to place orders because she knew them well.
  • Attitude – sometimes people consider sales as a “dirty job” and/or that we may be they are inconveniencing/imposing on someone by pitching them…like a stalker (maybe that’s just me). Could this stem from the fact that perhaps we don’t believe in our product or the value it can deliver to our customers. Listening to my daughter, I heard her talk about how good some of the cookies are and know how much they and/or their children love them, how she likes to put the “Thin Mints” in the freezer because she likes to eat them cold or dunk the “Do-Si-Dos” in a glass of milk before bed. Having seen boxes of GS cookies disappear from our shelves, I can attest to how much she loves her product.She’s not imposing on others, even though she caught some folks at dinner, she’s turning others on to a great product that she loves. What a difference that makes…
  • Product Knowledge – not only did she know all the cookies, including the new and classics, but also how many where in a box and how they were packaged. The best part was describing how to consume them…see above. I can’t tell you how many marketers I’ve worked over the years that don’t know the products their companies sell. I’m convinced that this lack of product knowledge is the leading reason why sales organizations dismiss or don’t respect marketing/marketers. Want to improve sales and marketing integration, train your marketers on products and see what happens.
  • Reference/Customer Testimonies – when her personal testimonials weren’t getting the job done she started to talk about others in the family and/or someone they knew. It made me think, do customers really care to hear reps experience with their own products? Maybe not, but do they listen to how convincingly or passionately they’ll testify…you bet! Customer testimonies are always the best –the more relevant the situation the better, but they also judge reps consciously or unconsciously on how well reps make their case (see the bullet above).
  • Handling Objections & the True Decision Maker – she went after a new customer who told her that they usually buy from a girl in the neighborhood. She then asked for the lady of the house recognizing the dad/husband was not the real decision maker (home schooled on this trick). She got an order but not the full order…the girl in the neighborhood will still get hers…but it will be a couple of boxes short.How often do our reps stop at “no” or get stuck dealing with the first contact vs the real decision maker? We all know that we’ll have to work harder to get the order than in the past, maybe we don’t go for the home runs as often, and settle for few singles instead.
  • Incentives – simple and straight forward, no complicated % or calculations…sell this much…get this. A compensations consultant’s dream, straight forward and easy to implement. On the order sheet, it lists the prize the girls receive based on their sales. As she reached certain level (25 boxes, 50 boxes, etc) she would tell us what prize she was won and what she was going for next. But the big one, the President Club, the one that screams “I’m the Diva” was the Cookie VIP patch.Good old fashion recognition for a job well done that lasts all year. Oh, how we’ve complicated incentives plans over the years. The search for the ultimate motivator has many times led us down the wrong path. Is it time to simplify, not sure, but I would bet it’s worth investigating.
  • Connecting it to Social Causes – this is the primary fundraising vehicle for the Girl Scouts and people know it. Can you write off the $3.50 per box as a donation? No, but you do feel good about placing you order, sure. We’re all so socially aware nowadays, are there opportunities to connect your products to the “greater good?” You may have seen the latest ads from IBM and how they’re products and services can help companies “go green.” It’s time to add this to the value proposition…or at least consider it.

Yes, I know that many of us have much more complicated sales processes and products/services, but how much of that is self inflicted? At the end of the day, don’t all customers want the same thing…a good product or service that satisfies a need/want representing good value acquired through a pleasant experience?

During this difficult economic environment, listening to my daughter was a good reminder of how well having a good product, knowing your customers and believing in the value that you’re providing can work. Is it time to simplify our products, value proposition, how we compensate our reps? It may depend on the company, the situation, the market…but I would bet it wouldn’t hurt.

At the end of the night, ten phone calls, 10 closes and over 70 boxes of cookies sold in the matter of 30 minutes (pleasantries, product description, and an order every 3 minutes). Not bad for a junior telemarketer with no training. The GS’s will sell over 200 million boxes of cookies over the next month…more than any cookie manufacturer will sell in the entire year.

Does simple work…for some, extremely well. The question is, can it work for you?

The Myth of the “Foot in the Door”

by | Jul 17, 2012 | 2008, Sales

Given our average deal size we used to think we needed to have a scaled down offer to get a foot in the door. Once in, we could then grow the account. We were wrong.

Considering the current economic situation, I know that many companies may be tempted to come up with a “door opener.” A subscale and/or entry level product/service intended to get a foot in the door with a new client and/or a new business division.
You’re also probably thinking about going down market into smaller accounts. Although this shift may help satisfy short term revenue needs it will do little to nothing in helping grow your business. Most likely those accounts will not expand and/or even be retained next year.

Here’s how I know. Looking back at the new accounts acquired over the last four years we found some interesting trends and confirmed some things that we knew intuitively (click on the image). When we measured the value of customers in their first year against the average time spent engaged with the client a few key insights emerged.
First, three “clusters” of accounts emerged;
  1. Customer that grew to beyond $800K in their first year
  2. Customer who had first year revenues between $350-$600K
  3. Customers who represented under $250K in total billings from the year.
Let’s start with the bottom and work our way up. Customers in cluster 3 had an average value of $150K. Accounts on the lowest end of the spectrum in the “One and Done” zone” (under $10K for example) were “workshop”…our “foot in the door” offer. Guess what, of the 8 that fit that description zero, zippy, nada, grew beyond the initial workshop. The other bad news…only 2 accounts led to follow on work and no company in that grouping was retained the following year.

I was speaking with Larry Emond, CMO of the Gallup Organization the other day and he mentioned that they saw a similar trend; “We found that only 4% of customers who were acquired under a certain price point grew to be substantial customers.”On the other end of the spectrum are the occasional customers who are big right out of the gate. The “Rare Birds” zone in cluster 1 includes those few customers who start big and for the most part remain large customers YOY. The key to success with this cluster is that they had/have a tendency to have a need for multiple service lines and/or desire a complex solution. This group was looking for a strategic partner versus a vendor for an immediate need. Year over year retention was also good at over 50% and if they used multiple services lines it was almost a sure thing they be retained….and grow.

As Larry also mentioned; “Our big customers today came in as big customers…”. We’ve had the same experience and have grown our top 5 largest accounts by an average of 90% over the last two years.

Customers in cluster 2, the “Sweet Spot” represented the best of both worlds. Although their value was not as high as the “Rare Birds” they were more plentiful. They also had higher price points, high percent of follow on work and YOY retention than the “One & Dones.” Retention rates although not as high as the “Rare Birds” was good (a little over 33%). Bottom line – they represent the model that we need to build our coverage and services bundle against. We have also realigned our resources to help account development/retention activities against this group.

Why do low price point and short engagement acquisitions perform so poorly?

We discovered five main reasons for this:
  • Length of the engagement – too short to learn business/issues/meet folks/create a relationship, etc.
  • They get the “B” team – the “A” team is on existing accounts, as a professional services firm that measure FTE productivity this will always be the case.
  • Short term need vs long term problem – we were successful in building a relationship with target buyers within targeted accounts. So much so that they decided to “give us a try.” The problem with that is that it was usually a piece of work that wasn’t strategic.
  • Size matters – our win rate and retention rate dropped dramatically on companies that had under $1B in revenues. The only exceptions were situations we were able to sell a solution as the first engagement.
  • Culture/Attitude – some companies just don’t have a culture of working with outsiders. This very difficult to know until you’re in the door.

So as you are thinking about 2009 focus on aligning resources and efforts on;

  1. Retaining and expanding your biggest customers with new lines of business.
  2. Find your “sweetspot” based on this type of analysis…what is the right mix of services and price.
  3. Targeting big companies with big needs…there are many out there now just make sure you have the right offer.

Because at the end of the first engagement…a foot in the door just isn’t enough.

The Corporate “Hangover” From High Demand

by | Jul 12, 2012 | 2006, Sales

Remember when you had a unique product, a top-notch sales force, customers who couldn’t get enough of your product and were willing to pay anything for it. Sales reps couldn’t close deals fast enough and the factory couldn’t keep pace with the orders. Little to no inventory cost, high margins, an incredibly productive sales force, big bonuses, soaring stock, etc…things couldn’t be better. But what happens when demand begins to slip?

One of the first things to occur is that your best customers, who in the past had no leverage, begin to feel the advantage shift their way and sales reps (unknowingly and for the most part unwillingly) help that transition.

As demand cools, good sales reps who are trained negotiators and born manipulators, begin turning their finely tuned sales skills on the organization. Feeling the pressure to close business and meet quota, reps begin “selling” the organization on what they need in order to get the deal done.

Instead of driving customers into existing solutions with a premium price, they take the course of least resistance, demanding that the organization bend to meet the customer’s (not the company’s) requirements. The company “customization” party goes on for as long as the sales quotas exceed market demand for the product.

The Hangover Effect

What does the company look like after the party? Unfortunately, like most good parties, the news of the festivities grows and involves most of the organization. At the end, it is not a pretty site and it take years to clean up. Here’s a list of the mess left behind:

  1. Large contract departments – When demand is high, customers typically agree to standard terms and conditions in order to get the product as quickly as possible. As demand slows customers begin to try to gain leverage by modifying the “T’s & C’s” of a contract to their advantage. Reps desperate to get the deal signed before the end of the quarter apply pressure to the legal and contract departments to accept customer terms. This results in contracts so complex to manage, that additional staff is needed to administer them.  In one hi-tech firm, for example, it takes a staff of four to perform administrative tasks related to just one large customer contract. Multiply that by twenty large customers and you begin to see the problem.
  2. Complex product and price configurations – In the eyes of the customer, the value of the rep shifts from problem solver and solution provider to personal customer advocate. The same demand for customization of “T&C” is applied to product configuration and pricing arrangements. The result is highly customized solutions, hard-to-write service agreements, and complex payment terms that may end up costing the company money.  The response from the product management team of an ATM manufacturer working on standardizing product configuration was: “We have been trying to do this for years, but the sales force wouldn’t let us.”
  3. Order Taking vs. Order Making — A nasty side effect of this hangover is that when demand slows it reveals flaws that would otherwise had been hidden. One of those is seen in the quality of the sales force. The difference between “order takers” and “order makers” becomes apparent in a slow marketplace. In this environment of longer sales cycles and fickle customers, sales reps must work harder than ever for the sale that doesn’t hold much appeal for reps who are used to making quota without much effort.   A sales rep at a one-time highflying manufacturer of telecom and web equipment was overheard saying in the hall to a colleague; “…I’m afraid we are back to the bad old days when customers required a business case and ROI for every purchase decision…” 
  4. A Service Nightmare – When product configuration becomes so highly customized, it limits the number of service reps who have the competency to work on the equipment. This results in long service times. Worse yet is when service reps turn over, new reps, which lack the knowledge of the original configuration, begin applying short term service “band-aids” that sacrifice product performance.   In addition, complex product configurations bring complex service agreements. As is the case for orders, service contracts become incredibly difficult to administer and manage. For example, one customer of an equipment manufacturer demanded that each component of the product have its’ own unique service agreement…all 200 parts.
  5. Remarketing vs. Marketing – Marketing gets the opportunity to host the party. Because demand for most products already exists, marketers focus their efforts on having fun catering to big customers and satisfying the whims of the sales organization (big expensive customer events, sponsorships of sporting events, etc.). Their activities are nothing more than “remarketing” to existing customers to keep the party going.

As the downturn comes, marketing is stuck with pre-conditioned customers and reps who are looking for “fun” and “fluff”. Unfortunately in this environment, marketing never develops the types of programs and core competencies needed to effectively sell products and acquire new customers right when the company needs it the most.

Best Cure for the Hangover
It’s not the hair of the dog that bit you that’s for sure and unfortunately, this hangover does not respond to a quick fix like a couple of aspirin or a new technology. Here are a few tips for getting started:

  • Map out a plan – you didn’t get into this overnight and you’re not getting out quickly. Start small and stay focused.
  • Find/Create opportunities to standardize and/or simplify– force events such as technology implementation or new product introduction to standardize process, price and services.
  • Understand that not everyone is going to make it – the hiring profile for reps and managers 10 to 20 years ago when the sales force was built may not make it – order takers vs. order makers. The service and marketing departments may also need retooling. New competencies, skill sets and training are also necessary for those who make it.
  • Utilize new sales and marketing channels and retrain existing channels – introduce and pilot new sales and marketing channels that increase customer coverage, reduce overall sales cost, and improve customer acquisition. Help field sales reps find their “sweet spot” (closing large complex orders in new accounts) by providing training on multi-channel coverage models.
  • Draw a line with customers – Analyze and determine the profitability of your customer base. Segment it into three groups: 1) Profitable, 2) Marginal but with Potential, 3) Unprofitable with no potential.   Begin the process of re-conditioning the way customers in segment #2 buy. You’ve created the monster and now you have to tame it. In segment #3, begin the process of terminating the relationship.

In the end, it is like any hangover. You feel terrible, you have a few (or a lot) of regrets, you promise to yourself and others that you’ll never do it again — but…it was fun while it lasted.

How a Marketing Dashboard Can Bring Down Your Kingdom

by | Jul 12, 2012 | 2006, Marketing

Once upon a time there was a Prince named CMO and he lived in the magic kingdom of Marketing. The kingdom of Marketing was under attack from the kingdoms of Sales & Finance. The kingdoms were fighting over the “holy grail” of performance and ROI. So the Prince decided that he would build a Marketing Dashboard that would lead him to the Holy Grail.

The Prince commissioned a band of Knights called Consultants to lead the crusade and help him search the world for information. This journey was difficult and exhausted much of the Prince’s fortune but finally, the Knights built the Prince a magnificent and magical Dashboard…and the Prince was happy.

The Prince showed the Kingdoms of Sales & Finance his Dashboard and they were impressed. He told them that he was close to discovering where the Holy Gail of performance and ROI was hidden. Every month the Prince met with his people to talk about the Dashboard, and ogle at its magnificence but then, one day, something happened. The Dashboard started to lose its magic. The Prince and his people could not make it better and it steadily got worse; the Prince and the Kingdom of Marketing were very concerned and unhappy.

The Prince of Sales started to question the magnificence of the Dashboard and the power of Prince CMO. Prince Finance believed that the magic Dashboard was showing him how Prince CMO was squandering the wealth of his people. The Prince was under attack and eventually lost his kingdom.

The moral of the story is that a Dashboard is not the “holy grail” of performance and ROI. CMO’s are under a tremendous amount of pressure to show the organization how they are providing value and producing a positive return on what can be very sizeable investments (3-6% of revenues). CMO’s believe that they need to have the data to prove their case…and they are right. The difficult part is knowing what to do with the data once they have it, and how to move the numbers in the right direction. Although the story above is written as a fairy tale, it is based on a true story.

The most important thing that a CMO can do to improve the performance of marketing is teach/train country marketing managers the basics of pipeline management because it is their results that show up on the Dashboard. Effective pipeline management is built on four key principals:

  •  Volume – the flow of incoming response, leads, opportunity coming into the pipeline
  •  Conversion – the percent of opportunity that makes its way from one stage to another
  •  Cycle Time – the average time it takes for opportunity to move from one stage to the next
  •  Transaction Size – the average order size of the opportunity closed

If CMO’s can effectively coach their teams on how to manage by these prinicipals then they will have achieve the “Holy Grail”…and they will get to keep their kingdoms.