5 essential factors to build a B2B sales pipeline that delivers consistent revenue.

Mar 9, 2020 | Customers, Sales

 

Selling B2B  is a complex activity. Success takes time, effort, and persistence.

Therefore, to be truly productive, it requires the discipline of a repeatable process that is also measurable and scalable.

In order to achieve this outcome, there are 5 factors you should be building into your planning cycles.

Have a very clear view of your target customer profiles.

You cannot be all things to all people, you have to tailor the value proposition you communicate to the problems and aspirations of the target you are approaching. Many businesses have a number of key targets, keeping them clearly separate, with separate value propositions is essential.

For example, one of my clients is a printer, not a large business, but one that has a very wide range of services available internally, from original artwork, to various forms of printing, die cutting, assembly and decoration. They have two primary verticals they target .

  • The first is businesses involved in trade shows. Typically, those businesses leave their printing and stand design needs to the last, and that can cost a lot of money, leads to conflict and suboptimal outcomes. Given they have everything required under the one roof, the time from briefing to delivery is way shorter and usually cheaper than the business managing the various facets themselves.
  • The second is small and medium sized clubs, those with limited internal marketing and design resources, but a need for a lot of work done to a consistent theme. Again, keeping the work in house ensures a quality outcome at a competitive price.

Demonstrate your expertise.

There are as many ways to do this as there are stars in the sky, pick a few that are particularly relevant to your customers, and focus on them. Almost inevitably the best way is to give away information, in such a way that the receiver recognises that the information you have given is valuable, and if it is for free, how much more is there to be gained by working with you?. This might be in the form of blog posts, webinars, conference presentations, and many others, The best however, is having your current customers refer business to you, either directly, or via testimonials in one form or another. People trust other people, they will discount your own claims, simply because they recognise the self-interest.

Observe the 3 second rule.

Every sales call, conversation, post on your website, whatever the material, the most important part of it is the headline. If you cannot grab the attention of the audience with your headline, draw them into the body of the material so they can become more engaged in some way, they will be gone. You have 3 seconds of their attention, after which you have to earn every further second. This is particularly true in a sales phone call, that most dreaded of mediums. Be direct, and specific. ‘Hi, this is (your name) from (company name) we are expert at helping companies like yours with (target pain point) by (specific promise), and would like to take no more than 10 minutes to see how we might be able to assist you’. There are many variations to this, but simple, to the point, and outcome specific works, while making it as hard as possible to say ‘no’ to the next step in the process, which is often a meeting.

Remove the risk.

For a potential customer, doing business with you the first time has some risk. Irrespective of your pitch, the social proof you may have, and the relationship you might have built during the sales process, the decision to go with you rather than the alternative will be seen as having some element of risk. When you remove the risk, put them in a place where they have nothing to lose, why would they  not go with you? Most businesses have some sort of after sales service, replacement, or quality guarantee in place. When a customer is dissatisfied, there is some mechanism to address the problem, so why not make it explicit, a part of your offer, remove the risk. The potential cost is already factored into your price, it is just that you hope nobody uses it because you always have satisfied customers. Remove the risk from making the choice to go with you, and your sales will zoom! 

It is easier to get more from a current customer  than it is to find a new one.

How often we forget this, and devote resources too hunting out new customers, when there is potentially more business for you in the current client roster, their associated companies, and perhaps those to whom your current clients are happy to offer referrals. This requires that you build relationships over time, and those relationships are based on trust, mutual benefit, and importantly, your performance over time. My favourite measure of sales effectiveness is ‘share of wallet‘. It is a demanding measure, it forces you to develop intimacy with your customers business,  as well as understanding your own capabilities very well, so you can determine what is inside the wallet, and what is outside, and therefore not productive to chase. 

Call me when the experience I have can help address these challenges.

 

 

 

Marketing technology. Master or servant?

Mar 4, 2020 | Communication, Marketing

 

 

This is a story of two modest sized SME clients.

One has spent a lot of time, effort and money building a marketing technology ‘stack’, to use the vernacular. The expectation was that it would deliver significant marketing productivity, which they defined pretty well with a range of measures.

The other uses a basic system to record customer contacts and follow ups, as well as a semi manual system to create, collect and collate information, or ‘content’,  combined with social platforms and their website for lead generation.

The first client, with the sophisticated system has a tiger by the tail. The technology is ruling them, is unrelenting, unforgiving, and prone to drive them down dead ends because their data input is patchy  and sometimes flawed. Their recognition is that after all the effort, they are  little  better off than before the technology, just lighter in the pocket, and wearing people out.

The second client is struggling with the processes, particularly the manual interventions required, and the personal level of engagement necessary. There is frustration as they are continually told, ‘all this should be automated’ ,  but when you look at the total cost of conversion, share of wallet, lifetime value and referrals, they are much better off.

The question then is the extent to which the software is serving the purpose to which it has been directed, vs. serving itself. The intervention of people has been removed, automated, and the automation does not give a fig about the human interactions that make relationships, it just needs to be fed data.

Greek philosopher  Sophocles is quoted to have said, ‘nothing vast enters out world without a curse’ , and never has that reported quote been truer than when we consider the automatic responses we all have to the digital triggers now prevalent in our lives.

Give me back some of the humanity, with all its ambiguity and nuances any day.

So, as you are considering automation of your revenue generation processes,  never forget to account for the fact that people do business with people, in strong preference to algorithms, which are just tools.

 

 Header cartoon, Courtesy XKCD

How to think about your business

Mar 2, 2020 | Governance, Leadership, Management

 

Business is simple, in principal.

Sell something for more than it cost you to produce or acquire it, recognising that the buyer needs to understand that the value they will derive from the product is greater than the cost they incur in buying it.

Simple.

Einstein said everything should be as simple as possible,  no simpler, and his E=MC2 is the simplest  equation that explains (somehow) masses of complicated stuff. It is the best example ever of Occam’s Razor, named after William of Ockham, a 13th century philosopher which encourages decision making to the broken down by progressively removing those outcomes that are based on beliefs and ideas rather than facts. When you have all the beliefs removed, you are left with the facts.

Often however, not so simple after you go one or two levels down the burrow to figure out just how you go about that process of removing all the biases and beliefs that masquerade as facts.

Charlie Munger, offsider to Warren Buffett in creating billions of value for Berkshire Hathaway shareholders over 50 years spoke about Mental Models in a speech in 1994.  His premise was that you need a ‘lattice’ of mental models that apply to the different  perspectives that apply to any question being faced in order to distil the ideas and wisdom that applies to your situation.

I agree absolutely with the idea.

It is simple, but as complex as you choose to make it.

As someone who helps small and medium manufacturing businesses improve the economic performance, there are numerous mental models at work simultaneously.

Strategic models: There are many strategic frameworks or models for business planning. Porters 5 forces, Boston consulting’s 4 quadrant,  game theory,  the old favourite SWOT, and many others. Profoundly important and often missed  at this point, is consideration of the business model being employed. 

Operational models: Lean thinking, 6 sigma,  shift sequencing, the mix of technical, support and operational staff, deployment of technology, interaction of technology and those at the work face,  on and on, you have the opportunity to use the wisdom of others to sort the relevant from the  not so relevant.

Financial models: the standard accounting forms of cash flow, P&L, and balance sheet, together with a break even analysis, and decisions about the type of costing models to be used, ratios to be calculated, and formats in which the information will be communicated. To properly understand the operational mechanics of a business, you need more than the standard financial reporting. Their limits are a view of what has happened to the money, little about why and how it happened, and certainly very little about what may happen in the future.

Marketing and sales models: where do I start?  Ideal customer profiles, value proposition, digital Vs analogue, differentiators, marketing toolbox and the multiplicity of tools to deliver leverage, ROI of marketing investment, Account based selling,  selling models such as BANT, sales funnel, conversion rates, anchoring a negotiation, and thousands more.

How do you sort all these options into a few that will deliver results that are worth the investment?

  • You start with the end in mind, the strategic and commercial objectives, the why. I call this process ‘hindsight planning’
  • You break down the challenges into sequential ‘chewable chunks’
  • You focus on the important more than the urgent.

Behavioural models: These usually emerge as a group of expected behaviours, collectively called ‘Culture’. The best example I can think of is the 10 commandments, common to the 3 Abrahamic religions (Islam, Christian and Jewish) that sets a wide framework of the few things you must not do, leaving the rest up to you. Together, in their own environment, they provide a ,macro framework for behaviour, which we then break down further into the components that we seek to live by in a community.

When you need some help sorting this out, call me.

 

 

How do you trouble shoot flow?

Feb 27, 2020 | Lean, Operations

You never get this process of articulating flow right first time, or second, maybe third for simple tasks. People are always people, they are in a hurry, forgetful, negligent, or new to the task, so it has to be made as easy as possible.

Toyota pioneered this idea of flow in a manufacturing environment, but whether you are in a factory, or in an office, the process is the same. There has to be a process for continuous improvement, or at the least one to identify and remove impediments to orderly and consistent flow, in any organisation that aspires to survive and prosper. It results in the optimisation of the process, which is usually radically different to what is required to encourage innovation, which is by its nature more ‘scrappy’ and disorganized, as the activity seeks to test its viability and grow.

Improvement only comes from a stable environment, where things happen in a consistent and predictable manner. When you have stability, you are in a position to experiment, and observe quantitatively the result of the experiment. Was it beneficial, is it worth incorporating into the standard process? If so, then the process check list is changed to incorporate the change as the new standard procedure. If not, a note is made so that at a later time someone can review and know the change has been tested, or indeed, use it as the base for construction of a hypothesis and further experiment that takes the change one step further to where it may make the difference.

A client some time ago installed a coffee machine in the tea room. An expensive unit, that took beans, ground them and dispensed with hot water and milk on demand. The unit has three  things that needed to be done. Beans added to the container, water added to its dispenser, and the line from the milk bottle, held in a small refrigerated unit on the side, needed to be removed and cleaned each day.

These seemingly simple things caused a lot of problems, and really shitty coffee. Water was put into the bean dispenser, (strangely perhaps, beans did not seem to find their way into the water dispenser) requiring an extensive service (twice) and the milk line seemed immune to any cleaning.

To address this challenge, we engaged the staff in a bit of a game, using a fishbone diagram and post it notes. 

Within a few days, the diagram was covered in suggestions, which at a lunchtime meeting we ‘workshopped’ down to those that the people using the machine thought were the best. We wrote a checklist, or standard operating procedure  for the coffee machine, which was tested over a few weeks by a small group of heavy users, then posted on the wall of the kitchen, as well as included in the businesses then developing library of SOP’s.  We also left a big framed photo of the fishbone on the wall in reception, as a reminder to all that improvement was everybody’s job, and that it could be fun, as well as useful.

And, far fewer problems with the coffee machine since.

 

Header photo courtesy Alwin kroon via Flikr

 

 

The core problem of calculating a return on an investment in marketing.

Feb 24, 2020 | Management, Marketing

Return on Investment is a very simple financial equation.

What you earned, minus what you spent, divided by what you spent.

Earn $100 after spending $75, divided by the $75, and you have a  33% ROI. Put another way, for every dollar you spend, you get back $1.33.

Simple, right?

Then why do marketers seem to have so much trouble convincing the corner office that investing in marketing is a sound strategic and commercial choice.

Simple answer: Attribution.

Which part of revenue, or margin earned, depending on how you want to measure the success or otherwise of an investment, is attributable to the spending of the money?

Let’s take a simple and very common example: building a website.

Every business these days is told they need a website, not having one is like not having a phone, it simply makes doing business next to impossible.

 Let’s look at the formula to try and pick clean the bones of the calculation.

What you spent:

  • You need resources to determine the form and scope of the website.
  • You need someone to write the copy, and take or source the photos and illustrations.
  • You may need subscriptions to items supporting the website, such as CRM integrations, analytics services, pop-ups, autoresponders, and on, and on, and on.
  • You may need resources to manage and ‘clean’ the data bases that appear on the site, such as product specifications, promotional deals, customer and lead management, and on, and on, and on.
  • Finally, you need resources to build and maintain the website.

All of these resources can be sourced from external parties, in which case you can track invoices, or from internal resources, in which case all you have to do is determine what part of their employee costs you need to attribute to this website development. Simple to say, hard to do.

What you earned:

If anything, this is harder than attributing costs to a website development project.

  • What part of the revenue, or margin, whichever you choose as the benchmark, can you attribute to the cost of the website, and which part goes to the sales force, the quality of the product, the photography on the website, the manner in which you follow up enquiries, how  you capture returns, the cleanliness of the delivery truck belting around suburban streets, and on, and on, and on.
  • Over what time frame do you measure the return? A week, a month, a year, the duration of the associated advertising campaign, the lifetime of a customer?
  • How do you factor in other marketing activities, advertising on traditional media, digital ads, the weight of your distribution, the quality of the targeting of activity to real potential customers Vs the tyre-kickers. And on, and on, and on.
  • How do you include the value or otherwise of the word of mouth, or organic reach on social media? Which social media do you include in these considerations, is it just Facebook and twitter?  What about LinkedIn, or if you are a ‘techo’, GitHub, or Reddit, or the networks of gamers, and on and on, and on.

The core question is, ‘what do you include, and how do you allocate a weight to the contribution it made to the outcome?‘

Attribution.

Too add to  the confusion, people use a range of  terms interchangeably, usually because they do  not think about, or recognise the problems of attribution.

For example, they confuse return on marketing investment with return on advertising spend, and they  confuse leads generated with real financial results, and most particularly when confronted by someone flogging new and shiny digital toys, revenue with margin.

To go back to the metaphor at the beginning, a website is not anything like a telephone, so to make the comparison is  nonsense. A phone is a one dimensional tool. They all look the same, and do the same job, although the advent of smart phones has widened that scope considerably. A website by contrast is infinitely variable in what it does, looks like, and performs, and should be the product of a robust strategy and tactical implementation plans, not some simple template pulled out of a digital urgers kitbag.

To build that necessary credibility in the corner office, most probably occupied by an accountant or engineer, whose whole mind set is quantitative, you must be able to draw conclusions based on data. This data must demonstrate the cause and effect chains that exist, often  very well hidden, and avoid the marketing clichés and jargon, which just make you sound like that digital urger in the foyer.

Need help thinking about the implications of all that, call an expert.