Sales and Marketing Performance Blog

The B2B Buying Cycle and How to Influence it, pt 2

Posted by Mark Gibson on Mon, May 13, 2013

This article is the third in a series of articles on aligning marketing and sales with buying behavior and it will be of value to sales and marketing professionals who wish to adapt their process to align with buyer behavior.
 


The first article in the series,  "A Guide to Aligning Marketing & Sales Engagement with Buying Process" discussed buyer behavior and how it is affected by risk. Last week's article,  The B2B Buying Cycle and How to Influence it, pt. 1 is an in-depth review of the formative stages in the buying process and the role of sales and marketing in early adopter engagement as well as the risks to the supplier.

Phase 4: Assessment

Congratulations, you made it through  Position, the graveyard of most opportunities. Chances are you are well on your way to a sale to an important new customer, but don't put the champagne in the fridge yet, it could be months before a formal transaction. 

The  Assessment phase is a necessary step in a post Enron-world and the era of corporate accountability to satisfy that due diligence is carried out, compliance issues are met and risks are properly considered. 

In the assessment phase the organization is weighing both the upside and the risks in implementing early stage technology. Qualitative and quantitative performance information is sought, as well as assessment of upside, risks, plus all costs. Assessment involves assembly of a project team, proof of concept or pilot to create evidence & gather data. 

Role for Marketing

I asked John McTigue from Kuno Creative to contribute the three marketing segments on this blog as they are engaged with a number of current customers on exactly these deliverables.

Marketing automation is more than sending an email to a list of buying stakeholders and tracking form submissions. It starts with aligning your sales and marketing teams so that they are on the same page with respect to:
  • Understanding the sales funnel concept and how it aligns with buying-cycle stages,
  • Understanding the demand generation and lead nurturing process,
  • Agreeing to criteria for buy-cycle stages, including lead scoring thresholds and sales-ready events and triggers,
  • Understanding and agreeing to the definition of a sales qualified lead and handoff between marketing and sales with respect to criteria and CRM integration,
  • Feedback (or closed loop marketing) to the marketing automation system (and team) based on sales engagements and status updates,

Role for Sales

  • Work with mentor/champion/buyer to implement a sequence of events for the assessment/evaluation,
  • Support the proof of concept; where possible, seek to influence the construction of the assessment,
  • Work internally within the supplier organization to support the assessment and provide technical support resources,
  • Do not commence an assessment unless you know what the outcome of a successful evaluation will be.

Risks for Sales

  • Pilot or proof of concept not properly specified or outcomes unclear,
  • Internal adversaries influence the assessment criteria to make it hard for the supplier to succeed,
  • The product doesn't work or deliver the anticipated result. (When this happens, it may be time to find another job.)

Risk Mediation

  1. The sales team needs to lead the client "let me share with you our process that has helped others make the transition...".
  2. Influence the construction of the assessment.
  3. Get your best minds focused on this vital task.
  4. An assessment takes time, effort and resources and exposes the supplier to considerable risk.
Do not start an assessment until you know what the outcome will be if your trial is successful. 

Phase 5: Case

The  Case phase converts the Assessment into a project to acquire the product or solution. 

The case phase involves creation of a formal business case, assignment of internal resources and budget.
  • Uses the output of the Assessment phase, 
  • Possibly includes analysis of alternative solutions to arrive at final cost estimates and an ROI, 
  • Likely to use 3rd party analyst data if available and independent comparisons of vendors and costs
  • In this phase, the Case is pushed back and forth between the mentor and the sponsor (champion) until the sponsor is happy all relevant business and political goals are served.
  • Budget is applied and the acquisition made public to potential suppliers.
  • The buyer may issue an Invitation to Tender (ITT) or Request for Proposal (RFP) to satisfy purchasing rules. At this stage the case could be passed to purchasing to formally engage suppliers in the procurement process 

Role for Marketing

Marketing's role is to assist the buyer in their journey towards becoming a customer. 
  1. It starts with buyer persona and messaging that addresses buyers directly at each stage in their personal decision process.  
  2. Demand generation campaigns tuned to buyer needs at the beginning of the journey (top of the sales funnel) attract new leads that are pre-qualified by virtue of targeting and messaging. 
  3. Lead nurturing campaigns keep potential buyers engaged and help them to become introduced to your products and services at their own pace.
  4. Calls to action at each step in the lead nurturing chain enable buyers to move forward when they are ready. 
  5. Marketing is responsible for creating the content that maps to each buyer persona and decision stage and for developing marketing automation workflows for demand generation and lead nurturing campaigns. 
  6. Ideally, sales and marketing work together to define lead scoring criteria for buyer behavior and to develop workflows for managing leads and handing them off to sales reps when they are ripe for purchase via CRM.

Role for Sales

  1. Set the agenda for the RFP/ITT or expectations/outcomes in a Term-Sheet, or Memorandum of Understanding (MOU) if the transaction is informal.
  2. Working through the needs analysis with the client and understanding the issues, goals and concerns of each constituent in the buying group. 
  3. Generate business support for the Case by demonstrating (if appropriate), that your product can help them achieve goals and overcome these issues.
  4. Providing assistance with cost/Return On Investment (ROI) models.
  5. Provide relevant examples and proof points via case studies and where appropriate, through reference calls with satisfied customers.
  6. Use briefing books, white-papers, Webinars and presentations to circulate ideas 

Risks 

  • Insufficient executive sponsorship (salespeople have only one key player on their team and their champion leaves).
  • A late-coming competitor engages internally though their champion and cleverly changes the ground rules at the executive level.
  • You receive an inbound inquiry asking for information on your products, and pricing. There is a sense of urgency and the buyer is not sharing with you all of their issues.

Risk Mediation

  • Meeting key stakeholders involved in the decision is mandatory,
  • Fight the battle on your terrain, fight to influence the assessment and the outcome of a successful business case,
  • Beware of the Inbound Inquiry with a short time to respond; you may be invited to compete to make up the numbers in a deal where your competition has been working for months to set the agenda and you are being invited along for the ride.

Phase 6: Transaction

The transaction phase confirms project details to all internal and external stakeholders. Procurement may become involved for a formal acquisition.

This could require competitive tendering, a short-listing of possible vendors, demonstrations and selection committees, the conclusion of which will be the award of the contract to the successful supplier.

Role for Marketing

In the final stages of the buy cycle, marketing also plays an important role in providing Sales with the lead intelligence and content they need to overcome objections and close the sale. 

Bottom funnel content such as case studies and video testimonials can help to sway buyers on the fence, and lead behavior monitoring can signal their intentions to the sales team so that they can prepare the most effective approach to closing. 

Once the sale is finalized, feedback from buyers as well as sales reps arms the Marketing team with valuable information for reaching new leads and nurturing them throughout the buyer cycle.

Role for Sales

  1. Close the sale at the best possible price. If the answers to the following two questions are not yes and yes, do not begin to negotiate price. 
    1. Are we the chosen vendor?
    2. Is price the only remaining obstacle to doing business?
    (Customer Centric Selling, Bosworth and Holland)
  2. Execute a Sequence of Events where the outcome is an order on completion of a successful assessment and business case.
  3. Salespeople should strive to time the order outcome other than at the end of quarter. 

Risks

  1. Insufficient Stakeholder coverage results in your offering being marginalized by vendors aligned with more powerful executive team members,
  2. You get outflanked by a competitor who has blind-sided you and cleverly changed the ground-rules of the evaluation,
  3. Your champion or executive sponsor leaves or is transferred,
  4. A late-coming competitor drops their price through the floor and the client uses this as a lever to get big discounts,
  5. The buyer delays the transaction until the end of quarter and engages the purchasing team who are trained in negotiating pricing concessions and compensated on reducing vendor margins,
  6. There is an announcement that the company is making a strategic acquisition or is being sold or merged. (Not much you can do about this one - usually means a minimum of 6 months before the opportunity will be revisited - if ever; - back to the drawing board.)

Risk Mediation

  • Use a project plan or sequence of events which is timed to conclude in an order, other than at the end of quarter,
  • Ensuring you have met with, understand and to the extent possible, satisfy the needs of key stakeholders,
  • Keep your mentors and champions involved in the machinery of the purchasing process; this is particularly important if you have proven a business case, established ROI and the purchasing team is being very aggressive in their negotiation stance,
  • Be prepared to stand your ground against professional purchasing teams; call in your champion,
  • Be prepared to walk if you cannot close the transaction on acceptable terms.

New- Selling with IMPACT Whitepaper
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Topics: killer products, buying cycle, b2b buying process

A Guide to Aligning Marketing & Sales Engagement with Buying Process

Posted by Mark Gibson on Thu, May 02, 2013

Have you ever had a situation where you engaged a prospective lead, they showed a lot of interest, your meaningful conversations led to a demo or a presentation and then the prospective buyer went radio silent and disappeared?

This happens a lot; according to Scott Santucci of Forrester, 
at least 80% of the time leads fail to make it through the sales process.  There are many possible reasons why leads die, but I suggest that most early leads don't make it past the critical internal "fight for funds" (Positioning) phase in the buy cycle. 

Buying behavior has changed permanently and way faster than most sellers and marketers have been able to adapt their processes and their business. Much recent debate about the point at which salespeople are engaged in the buying process leads me to believe that an in depth review of buying-selling process is required. 

The Book that Launched a Thousand Others

"The Diffusion of Innovation," by Everett Rogers is a hugely influential study on the process by which innovations are adopted or diffused into a population. This work, now in its fifth edition was first published in 1962 and has spawned dozens of books like  "Crossing the Chasm," by Geoffrey Moore,  "The  Tipping Point," by Malcolm Gladwell and many others.

This series of article will help you understand why most early stage opportunities die, how buyers buy and how you can better influence a buying cycle in your favor. The articles are based on a collaboration with Dominic Rowsell, co-author of " Why Killer Products Don't Sell" and adds a layer of understanding from the buyers perspective on how they go about buying innovative or disruptive technology and how risk affects vendor engagement.

Understanding the buying process will help sellers to engage and optimize their value chain. This is new thinking for most sales teams and with insights gained from this work, we can adjust our selling process to serve our customers according to how they buy - which is governed by their tolerance for risk. 

Why do People Buy?

People buy for many and varied reasons; our role as sales professionals is to find out the underlying motives of the buyer and once in possession of this knowledge, do our best to satisfy the buyers needs. 

People buy technology solutions and consulting services for dozens of reasons, however most of these can be distilled into the following four business drivers, or buyers compass.
  • To grow top-line revenue
  • To reduce cost and improve profit
  • To create competitive advantage to attack new opportunities
  • To reduce risk exposure to the business

How do People Buy?

There is a pathway or process that all organizations and individuals follow to reach purchasing decisions. This pathway is universal and does not vary by culture or geography as it is inextricably linked to human nature. What changes from one company to another is the speed at which organizations or individuals travel through the process.

Every purchase goes through the IMPACT cycle, either formally or informally, - with or without the supplier.


Whether an airline is buying a fleet of Boeing Dreamliners, a small business is buying an innovative new software service, or a family is buying a new laptop computer for the home, every purchase goes through the same process. For a Boeing 787 it may take 20 people two years to decide, for a Laptop in the home, it might take a discussion with your partner, a visit to a few Websites and a couple of hours in total.

The six steps in the buying process use an acronym which is easy to remember as it has huge I-M-P-A-C-T on organizational performance. Every purchase goes through all six phases, with or without the supplier.

Engagement and the Cycle of Adoption 

The Cycle of Adoption shown in the visual confection below, layers the cycle of adoption over the universal buying process IMPACT and introduces the four buying behaviors and the point during the cycle of adoption that they engage buyers.

 

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Topics: buyer-seller alignment, buying cycle

Overcoming the Post-merger Sales Revenue Challenge

Posted by Mark Gibson on Tue, Apr 23, 2013

Mergers and acquisitions hold promise for owners and investors of combinatorial synergies to reduce costs, increase profit, extend market and product coverage, as well as accelerate innovation.

According to the Bloomberg 2012 M&A Outlook, more than 24,700 deals were conducted globally in the year to end November 2011. However, mergers come with a great deal of risk as reflected in failure rates that are reported to be between 40% and 70%. Despite best-laid plans and executive oversight, human factors present the greatest risk and sales-force integration is the toughest merger issue to overcome. 

1+1 does not equal 3

In the B2B technology market we have all seen optimistic mergers and acquisitions struggle to achieve projections and prove a lie to the 1+1=3 equation that drove much of the pre-merger thinking. In many cases, the merger actually destroys shareholder value, where 1+1 is less than 2.

In an excellent article published in the McKinsey Quarterly, the author identifies four essential steps to facilitate successful sales operations integration:-
  1. Sharing information about the merger and integration process with customers and the salesforce, (overcommunicate)
  2. Build early sales momentum, (focus on quick wins)
  3. Look beyond retaining sales reps, (consultants are important too)
  4. Review your customer portfolio, (re-allocate resources to most promising customers)
My article seeks to explore several of the high risk factors in any merger;
  • Positioning the new merged entity in a way that is engaging and builds confidence in employees and customers,
  • Getting the combined sales teams productive and marching to the same tune,
Many post-merger business plans are based on pro-actively cross-selling for the 90-180 day period after the deal closes to generate quick-wins and build confidence and momentum, both internally and in the market; where company A’s sales team is tasked with positioning their own products as well as cross-selling company B’s products into their installed accounts and vice-versa. 



However in conversation with sales and marketing leaders in several merged companies in recent months, despite intensive product and sales training and incentives, the merged sales teams have failed to produce forecast results.

In one company I spoke with the VP of product management; company A products are a market-leader and sales are growing as forecast, yet company B’s products which were fast emerging in different market niche have few leads and fewer sales and heads are beginning to roll.

On closer examination it became clear that there were two key contributing factors that had been glossed over in the pre-merger plans.
1. Product maturity mismatch
2. Selling skill mismatch.

Product Maturity Mismatch

The I-M-P-A-C-T cycle is how B2B companies buy, with or without the help of a sales executive. I-M-P-A-C-T stands for the steps in the buying process, from the initial Idea-Mentor-Position-Assessment-Business Case-through to-Transaction. Company A is a market-leader, much of the new business growth comes from referrals and its business is growing at 30% per year. A buyer of company A’s products is a pragmatic Early-Majority (EM) buyer, the buying category is mainstream, company A has a well-established brand and is considered a safe bet. 




Company B however is smaller and fast growing in an emerging market category They sell to Early Adopters (EA) in a Value Created way. It's salespeople are technical and their presentation style hands-on and demonstration-led. Several of their sales stars jumped ship in the first months after the merger, (another big risk in any merger is the top sales and pre-sales stars leaving).

After one year, company A’s traditional customers still view company B’s products as interesting, but risky. The combined sales team struggles with positioning company B’s products in a presentation and demonstration led sales cycle that takes between 60-90 minutes and is heavily PowerPoint oriented.

Selling Skill Mismatch

Company A has a mature product and its buyers engage sales people in a value-added way at the business case or transaction-end of the buy cycle after they have determined needs and are ready to configure and buy the software.

Company B’s products are still crossing the chasm to the early majority. They sell to Early Adopters (EA) early in the buy cycle as buyers see the potential in the products to get a leap on the competitors and are prepared to engage salespeople earlier - in a conversation of possibilities. Salespeople in company B behave more like technical consultants than “gung-ho” salespeople and invest lots of time and technical effort to help buyers to understand the risks in their approach as well as the upside.

This by definition is Value-Created Selling, where the insight of the consultants creates momentum for change and shapes the buying experience. Company B salespeople are successful in winning pilots and they set the agenda for the eventual purchase, however sales cycle times are 12-18 months.

Fans of The Challenger Sale will see an obvious parallel in approaches.

Action Plan for Post-Merger Success:

Human factors far outweigh technology risks in M&A activity. Sales people will not position new products when they lack confidence and are uncomfortable in doing so...they will continue to position what they know and try to make their numbers selling their familiar product portfolio.

Traditional approaches to sales training in the form of a PowerPoint whipping from product management and a sales portal stuffed full of promotional material will not help to reduce sales ramp-times in post-merger situations any faster than with new hires in existing companies.

Sales enablement programs should begin by clarifying the value in the combined company offerings and the value-creation message.
Salespeople need to be able to tell a convincing story starting with the WHY and the values and vision that drives the combined entity and how that manifests in value to the customer. This is the “Why?” in the Simon Sinek video.

Traditional product training doesn’t work. Post-merger sales enablement needs classroom immersion and spaced repetition post-classroom, combined with sales management coaching, reinforcement and certification.

One approach that has been proven in getting rapid message ownership in salespeople is visual storytelling. Visual storytelling is also extremely effective in helping salespeople to communicate their "big idea" quickly using visual confections when in front of buyers.



Since this article was written, we have innovated on the storytelling process and can now deliver a visual storytelling and animated storytelling training session in one hour.
 
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Topics: sales enablement, value created selling, buying cycle, cycle of adoption

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