Posted by Scott Santucci on June 1, 2010
Why are sales and marketing professionals seemingly in a constant firefighting mode, moving from one fire drill to the next, one meeting to another? We are in the middle of a major transformation in the B2B sales model. Your company is caught between a rock and a hard place because your investors want to see accelerated growth and improved margins. However, your customers have the same pressures, and all have some form of enterprise-wide strategic procurement initiatives under way. Your goal: sell at a higher price. Their goal: buy only what they need at the lowest possible price. Something has to give.
In response to these tectonic forces, we find many companies have a variety of internal projects designed to combat the commoditization trend. Some common efforts include:
- Training sales people to get access to executives
- Creating "solution selling kits" or “sales playbooks”
- Developing return-on investment tools
- Focusing on demand-generation campaigns
- Developing sales-coaching frameworks
- Creating more structured opportunity identification and account scorecards
- Fine-tuning the CRM system to improve reporting and forecasting processes
- Pricing and packing exercises and corresponding negotiation training
- Reinventing product marketing functions into "solution" marketing roles
- Investing in branding and messaging programs.
Unfortunately, most organizations fail to properly coordinate these independent projects, with dramatic negative consequences. To meet growth objectives, companies hire more salespeople and put the burden of the customer relationship on the back of the sales force. To meet margin objectives, marketing resources are centralized and reduced. As a result, most organizations are unintentionally creating sales models that are: excessively labor intensive, rife with inefficiencies and not scalable—adding systemic problems these firms are trying to avoid.
"What do you do?"
You must manage the complexity or confuse customers. Value is communicated over time through a series of interactions between your company and your customer. However, this value isn't transferred from corporation to corporation. It is achieved by the conversations that individual people from your company have with specific stakeholders within a given account. So, in reality, a B2B sale is really the synthesis of many discrete conversations, and value is best communicated when they are focused on a common goal: solving the client's problem. What most organizations fail to address is how complex a task it is to corral many discrete conversations into a consistent value communications strategy.
To get a sense of the number of variables involved, consider a few questions that must be answered at the point of sale:
- Who: is affected by the problem?
- Why: is the problem important to address now, and what is its relationship to other problems?
- When: will the problem be addressed, and where is the organization in its decision-making lifecycle?
- Where: will the money come from to address the problem, and what resources are competing for the funding?
- How: should the customer solve the problem, given the unique circumstances?
- What: role will your company play in helping the customer solve the problem?
To make matters even more complex, most companies have solutions that can address multiple different problems, so this set of questions must be answered for each opportunity. We all know that good conversations are dynamic, reciprocal and most effective where there is trust between the people involved in the dialog. To accomplish this, the salesperson must communicate information that is:
- Relevant: to the specific circumstances and realities of a given company
- In context: to the roles and responsibilities of the individual with whom you are having the conversation
- Timely: in concert with where the customer is in its problem-solving process and to the relative importance of that issue to others that could gain investment.
Some major organizations are making colossal mistakes when trying to address these "last mile" issues of sales effectiveness. Here are a few examples:
- In terms of relevance. A well-known business consulting firm was preparing for a meeting with the CEO of a $50 billion consumer packaged goods company. Salespeople met with the CEO and unveiled a plan that would cut costs by $5 million that year and reach up to $10 million in four years. They were surprised when the CEO delegated them to someone four rungs below him. That company had a target to cut more than $2 billion out of its expense structure that year. For a company with revenue of more than $50 billion, $5 million in savings can come from renegotiating the paper supplier contract—certainly not something that is going to get any C-level executive excited, let alone the CEO.
- In terms of context. The sales and marketing leadership team of a multibillion-dollar IT services firm decided to send personalized letters from its CEO to "CxO"-level people in 50 key accounts. These letters were identical and addressed, "Dear CXO." I've yet to meet anyone with the title "CxO," and the viewpoints of a chief financial officer, chief technical officer, chief information officer or chief marketing officer can be very different.
- In terms of timeliness. A large enterprise software company figured out how to position its identity management software as a tool to assist with Sarbanes-Oxley compliance and, focusing on audit budgets, began marketing to auditors. However, auditors are not responsible for cost-effective ongoing compliance, and most had already figured out internal requirements for complying. So why was the company targeting people who don't have responsibility for a problem they don't need help addressing?
It's all about the conversation. Strong customer relationships are built over time, through a series of value-added interactions between various people from the buyer and seller organizations. However, most B2B companies fail to use the conversation with key individuals as the design point for go-to-market efforts. As a result, there are tremendous inefficiencies, redundant programs and conflicting agendas that work against the goals of adding more value to buyers. An effective sales enablement program should start by modeling the perspectives of all of the various stakeholders you will encounter on an account-by-account basis and creating a framework to help your salespeople have more value-added conversations that are relevant, in context and timely. After all, people buy from people.
(Writers note 6-27-10: Forrester switched to a new blogging engine and I have since learned how to use it better; considering how popular this post has been - I thought I'd clean it up to make it easier to read)