3 foundations for B2B revenue generation.

3 foundations for B2B revenue generation.

Jul 19, 2017 | Customers, Sales

Creating a process that delivers consistent and profitable revenue involves a whole range of functional collaboration from the agreement of the strategic objectives to the relationship building that occurs after the early honeymoon of the first sales.

It takes time, effort and commitment from a lot of people, and importantly a process that is sustainable.

The usual metaphor of a ‘Sales Funnel’ is well understood, but flawed in many respects, principally because the behaviour of existing and potential customers is rarely as predictable and linear as a funnel assumes.

However, the sales process can be broken into a series of steps that reasonably represents the sort of activities required to assemble leads and develop them into long term customers.

Prospecting.

To my mind, prospecting has three elements.

  • Building a wider network of relationships within existing customers, focussed on the servicing of existing business, with the objective of increasing the share of wallet
  • Identifying and making contact with those to whom the value proposition has the potential to resonate in the existing market segments
  • Go exploring, seeing where the capabilities you have may be applicable in ways that are not as obvious. I find the 70/25/5 rule applies as much to sales prospecting as it does to the more complicated and holistic challenges of a business turnaround. 70% of a sales prospecting time should be spent finding ways to increase the share of wallet of existing customers, and perhaps chasing those generated who have lapsed, 25% devoted to identifying and engaging with new customers who fit the usual profile of a prospect, and 5% being ‘out there’ exploring.

All three elements recognise the role played by the tools of digital marketing. People are expensive, so it is managements  task to leverage the cost to the maximum extent. Much of the role of the traditional sales rep has been overtaken by digital tools, but it still takes a person to ‘close’ and build a relationship. Such people are not order takers, they are amongst the most important people in your business.

Metrics present challenges, the adage that what you measure gets done is largely true. Therefore prospecting needs to be tasked and measured in meaningful ways that direct the effort made in alignment with the strategy. There is a whole list of elements that are present in a prospecting toolkit, such as: time bound revenue objectives and qualified sales opportunities, conversion rates of leads generated, outbound calls and contacts, Identification and relationship building with new contacts in existing customers, same for prospective customers, understanding  and profiling of a prospects business,

 

Conversion.

Long term revenue generation  requires a mix of repeat business, new business from existing customers, and business from new customers. The mix will be different in each case, and some level of management of these needs to be reflected in the way the metrics are set up. For example, a start-up leveraging new technology will have targets very different from an existing business that operates in a mature industry. Nevertheless, the process of conversion needs to be managed so that there is a steady and predictable as far as possible flow of business. Predictability of  the business coming in is a key to managing a business with as little ‘internal friction’ as possible. When there is predictability, most of the revenue is generated in a semi-automatic way, but when there is little  predictability, everything is a crisis, and crises consume inordinate amounts of management time and attention, leaving the important but not urgent stuff undone.

The sorts off metrics used can be broken into a number of classes:

  • Revenue generated
  • Leads generated and conversion rates necessary to generate the revenue
  • Data base management. This applies to the data on the markets in which you operate, the number and type of prospects in a market, as well as the more common CRM type data that accumulates detail on calls, responses, status of enquiries and what next type information.
  • Quantification of the funnel, how many leads are just ideas, to the hot prospect stage. As noted earlier, customers rarely behave in a linear fashion, but the metaphor often helps to ensure that the right resources are allocated at the right times.

 

Relationship.

Measuring the state of a relationship is never easy, the measures are usually subjective, and only truly evident over time. Like good parenting, we all know it benefits the kids, but the outcomes are really only evident over time.

  • Share of wallet my  personal favorite B2B ,measure  the most useful and often overlooked measure of the effectiveness of a relationship and of the sales personnel involved. How much of the spending of a customer that you could supply, do you actually supply? How much of their available ‘wallet’ comes to you? You can delude yourself in the manner in which you define the wallet, but defining the wallet in accordance to the things you can reasonably supply Vs would  like to supply, is sensible, and leads to the building of capabilities that will get you into other areas of a customers wallet.

How they see you. Are you the supplier of a commodity product, one that relies on price to make the sale, or at the other end of the scale, are you a trusted partner who collaborates for mutual success, and the sales you make are simply an outcomes of receiving an order from a purchasing system. For 30 years, I have used a sliding scale between these two points to measure the state of relationships. You easily create such a scale for yourself, but it does require some objectivity, just asking your sales reps for their assessment on a once off basis usually delivers nonsense.

 

4 essential questions for the new leader to ask

4 essential questions for the new leader to ask

Jul 17, 2017 | Governance, Leadership

Taking the top job in a new organisation is a stressful experience. No amount of planning and research can properly inform you of the cultural  DNA of the organisation you will be taking over. That knowledge will only come over time, and only if you go actively looking for it.

In many cases, new leaders do  not go looking, and as a result usually do not know what it is they are changing by their presence, and often do not care, to their cost.

Nothing is as resilient as a culture that perceives itself to be under threat from a new leader who ignores it.

In the course of coaching leaders, I encourage them to be absolutely transparent, to never shy away from those often difficult but clarifying conversations that are the daily menu of leadership. For the new leader taking a role in a new organisation, I encourage them to act like a sponge in the first few weeks, and understand the nuances of what they are really getting into.

Four simple questions can be very useful, and I encourage you to ask them of every senior employee you can in that very first familiarisation encounter, and if possible to communicate the questions beforehand, to allow them to think about the answers.

  • What three things do you think we should change.
  • What three things should we leave absolutely alone
  • What three things do you most want me to do
  • What three things would you encourage me not to do.

After you have asked as many of the existing employees as practical the same four questions, you will have a pretty good picture of the way things are around the place, and what the pressing issues are.

It is a bit like learning to swim.

You cannot do it from a book, you have to get into the water to experience it for yourself, and in this case the four questions are similar to learning to dog paddle, and to stick your face under water for the first time.

Cartoon credit: Hugh McLeod @ Gaping Void.

The value of an engaged employee.

The value of an engaged employee.

Jul 14, 2017 | Branding, Customers, Marketing

We all talk about the necessity of ‘engaging employees,’ but rarely truly achieve it, or see it in others. However, when  we do see it, we just know in our guts that we are looking at the way we would always like it to be.

Yesterday I spent 90 minutes in a suburban McDonalds store killing time between appointments, reading the daily rag, drinking an excruciating coffee, and fiddling with the language in a client report. All this time I watched a young bloke in the store make everyone he came into contact with feel special, even great.

He was just a casual employee, whose job it is to clean the tables and mop the floor. He did this, but he also did much, much, more. He opened the door as people were coming towards it, he high-fived the little kids, he helped a lady fold a stroller after extracting her baby, he joked and pranced, and he did all this with a huge smile on his face.

Every single person he interacted with smiled back, and had a word, he threw some light on everyone’s day.

As the store manager delivered a meal to the person at the table next door, I observed to him that this young bloke was worth much more than they were paying him, to which the manager responded, ‘We give him as many shifts as he wants, and we love having him here’

Despite the excruciating coffee, and other sometimes annoying human traits on display from time to time at Maccas, I know I will be back at this one, and hoping to see this young bloke loving his work, and making the day of others again.

 

 

 

Sustained Marketing success requires managed mindset change

Sustained Marketing success requires managed mindset change

Jul 12, 2017 | Change, Leadership, Marketing

We marketers, and usually sales people talk endlessly about putting ourselves in the shoes of those to whom we are communicating, and seeking to serve. It is absolutely right that we do, but then we stuff it up.

We do that by the way we define the industry we are in.

Go to any network meeting, and I (almost) guarantee nobody will define the industry they inhabit from the perspective of those they are seeking to serve.

They are lawyers, or Architects, or Insurance brokers, and so on. None will define what they do by the outcome for their customers.

Examples of the great miss-definitions abound, but two stand out.

Kodak was in the late nineties one of the great successful companies sitting on a mountain of cash, dominating an industry they defined as ‘Film’. They were so successful their advertising slogan persists to this day, we all know what a ‘Kodak moment’ is, well all over 40 do anyway. In 1975 Kodak engineer Steven Sasson invented the first digital camera, which Kodak patented, and later collected billions on the royalties until expiry in 2007. They even commercialised the technology for Apple under the brand ‘Apple QuickTake’, and even then failed to see the writing on the wall. In 2012 Kodak was made bankrupt, although it has since emerged as a different company.

Blockbuster, what a Lulu of failed strategic sight that is, although it is always easy with the benefit of hindsight. At their height, Blockbuster had 50 million members worldwide, thousands of stores, and were a critical link in the movie money making chain. In 2001, the fledgling  Netflix approached Blockbuster, seeking to sell their business into them, and run the online part of Blockbuster, for just $50 million. CEO John Antico had been looking at ways to experiment with on line delivery, and supported the idea. He had made some changes to blockbuster,  like removing the profitable late fees that penalised customers, but failed to get the deal with Netflix through his board, and it ultimately cost him his job. His successor led the business into oblivion by bowing to  the board, reintroducing the hated late fees,  and allowing the power of incumbency, and the aversion to change, to prevail.

You do not have to be a huge business to be caught by this definitional challenge that pervades the way you think, unconsciously driving the decisions you make. A client of mine is a printer, a modest sized family business that has been around for 60 years. They see themselves in an industry that has been significantly disrupted by digital, and while there is still plenty of printing being done, the volumes are modest compared to those of a decade ago, and  the prices and margins are very slim. They acknowledge they are printers playing a role in the communication industry, but they still think and act like commodity printers. At least however, they have made a start in the mindset change which drives behaviour, and which eluded Blockbuster and Kodak.

Blockbuster saw themselves in the video rental industry, not as a part of the entertainment industry to the end, and Kodak was in the film industry, not the memories industry, until they weren’t.

Marketing Myopia, a term coined in 1960 by Theodore Levitt in his seminal HBR article of the same name remains alive and well, just harder to recognise.

 

 

 

 

Are you pushing rope?

Are you pushing rope?

Jul 10, 2017 | Leadership, Management

Activity for the sake of activity, ‘busywork’ that does not contribute to an objective associated with creating value for that ideal customer group, is as useful as pushing rope.

Ever pushed rope?

No matter how hard you push your end, nothing happens at the other end, all you get is rings of rope somewhere close to your hand.

Useless.

The only way to move rope is to go to the other end, and pull it towards the objective.

In most organisations there are barriers to grabbing the end of the rope:

There is no budget

The boss will not like it (worse, the boss’s wife will not like it)

We have not done it before

I am too busy

It is not my job

There are a thousand reasons people push rope, and there is really only one way to change that.

Empowering every employee to stop doing non-productive activities in favour of doing stuff that counts.

Then we need to celebrate the changes made, or the elastic nature of ‘the way it has always been done’ will kick in, and you start pushing the rope again, as it is usually more comfortable than pulling it.