Ken Krogue

The guys and gals up at SEO.com recently announced that they were partnering with Boostability.com to address a “hole” in their service offerings. Recognizing that up to this point the bulk of their clients had been high-level enterprise, SEO.com felt that they needed to add a service offering for locally focused, small-to-medium-sized businesses to continue growing their market share.

My initial thought was, “Good for them.”

My second thought was, “I hope they know how to successfully target local businesses’ technology needs to get the results they want from the initiative.”

I say this because one of the biggest challenges InsideSales.com has faced has been differentiating our offerings between enterprise and small-to-mid-sized businesses.

In a perfect world, we’d never have to have our sales reps working both enterprise and small business deals. We’d separate the sales team by deal size, and “big account” closers and “small account” closers wouldn’t ever have to cross channels.

The reality, however, is that sales reps often have to work both types of accounts—and in technology sales, one of the biggest mistakes reps make in this situation is that they fail to adapt to the differences in technology readiness of smaller accounts.

The problem typically reveals itself in two related ways:

1. Reps consistently overestimate small business’s ability to provide high-level technical expertise.

Especially in today’s market, where many typical business services can be easily and cheaply outsourced (payroll, legal services, tech support, CRM), many small and mid-sized businesses purposefully go out of their way to avoid potentially costly IT expenses—but the rep still approaches the sale as if the prospect had their own IT department standing by to take care of their every technology whim.

2. As a result of #1, reps fail to do an appropriate needs analysis, because they forget / don’t recognize how many other “touch points” their technology solution requires.

Because reps assume small businesses have access to technical expertise they don’t have, they lose sight of the fact of just how much IT infrastructure will actually be required.

For example, even something as seemingly simple as our PowerDialer system requires a correctly installed and configured phone system (which anyone in telecom will tell you can be a total crapshoot based on the type of equipment used), a PC with the right software and add-ons, a working knowledge of basic Web architecture, and a “scrappy manager” willing to mold the system to produce the best levels of results—and that’s just for a relatively basic technology that increases productivity while making outbound sales and marketing calls.

If the product or service is even more complex than that, it only exacerbates the problem.

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It’s one of the sales industry’s oldest maxims, and I told it to my lead gen reps last week:

“Interest is often the counterfeit of need.”

When a B2B purchaser buys it’s because they have recognized the importance and necessity—the need— of solving a particular problem, and doing it now.

Interest can, of course, be a step to producing need—but interest alone doesn’t generate the impetus to make a purchasing decision.

“Need,” as I define it, is “a compelling, actively perceived problem that the prospect believes can be solved with the right product or service.”

Using this definition, I told my sales reps that one way to transform “interested” prospects into “buying” prospects is to use the three elements within the definition itself: compelling reason, active perception, and a belief that the problem can be solved.

One: Accentuate the need by demonstrating the compelling nature of the problem. Even if buyers recognize a potential need, they often don’t clearly see the value of fixing it quickly. The prospect must have a accurate picture of not just the need, but how fixing it, and fixing it now is a far preferable alternative to the status quo.

Two: Active perception. A compelling problem isn’t a problem if no one recognizes that it is. Or as occasionally happens, a need gets identified, but by the wrong decision-maker. Good sales reps understand that knowing where a problem resides on the corporate “food chain” is critical. And sometimes “creating need” requires just that—creation. The “Smoking Gun” approach is a powerful sales tactic; when you can visibly and realistically show a prospect a problem they didn’t know they had, it acts as a motivating force and build trust.

Three: Once recognized, a prospect must believe that their problem has a solution (and that you provide it). Often a prospect has already attempted other solutions to their problem before they spoke to you, and will be skeptical that your solution is better than the ones they’ve already tried. Sometimes this step is about overcoming objections, but not always; in many cases it’s about educating the prospect on how your solution works better. This is when having case studies, research, and customer testimonials can have real impact and value.

Remember:

Interest makes conversations, but need makes sales.

Sales industry researchers CSOInsights stated recently that after a “flat” budget year in 2009, marketing budgets are increasing in 2010 and beyond, and that the top three items for additional budget allocations were:

1. Web site design/content (65% stated they were increasing budget allocation)
2. Email marketing (54%)
3. Web search optimization (51%)

Great news, right? Good to hear that the economy is picking up, and that smart companies are following current trends in effective Web lead generation.

So why did my “Massive Disconnect” alarm start going off almost immediately?

Here’s why: because indicators show that the majority of companies are terribly, horribly un-optimized to take advantage of the leads their Web marketing activities generate.

Even though the article states that 75% of sales organizations now use a CRM tool of some kind to track and monitor sales activities, MIT research shows that most of them still aren’t following good lead management practices to get the most from their increased marketing spend.

For example, how many of the companies surveyed are currently responding to their incoming, “hot” Web leads in 10 minutes or less? Because if they aren’t, MIT’s research shows they’re potentially losing 20 times the total effectiveness of the leads they generate. Even worse, the research shows that 45% of companies don’t even respond AT ALL to new Web-generated leads—let alone in 10 minutes or less as best practices suggest.

So let me get this straight: the top three increased marketing budget allocations for the next year are all based on Web marketing—yet nearly half of companies don’t respond AT ALL to incoming Web leads.

Hmmmm.

Furthermore, of the companies surveyed, how many call/contact attempts are they making to reach their new Web leads? MIT’s research shows that barely 7 percent of companies make at least 6 total contact attempts by phone and email to incoming Web leads.

Yet according to The Bridge Group, the average number of “touches” needed to convert a new inquiry into a prospect is somewhere between 6 and 7—and dead “touches” like no-answer phone calls don’t even count towards that number.

So tell me again—why are companies increasing Web marketing budgets when statistically only 7 percent of them are even meeting the absolute, barest of bare minimums to get the value they want from their leads?

My “Massive Disconnect” alarm just went into overdrive.

Is it any wonder that in spite of progress, Propelling Brands says that sales and marketing still have a long way to go to align their processes?

Every once in a while, it’s nice to see that the spirit of ingenuity, vision, and invention hasn’t completely died in America. Internationally, we’re commonly seen as part buffoon, part overbearing “uncle,” part drain on society. And when you live in a country that produces 400,000 new lawyers annually, it’s sometimes hard to argue with the sentiment.

But then you see an idea like this, and you just have to stand back, appreciate it—and then share it.

Ingenuity and effort still make for great inventions, great people, and great companies.

You have to wonder what possessed a guy to invent a table saw that would stop running when it detected a human appendage near the blade.

And you also have to wonder why someone didn’t invent it sooner.

An outstanding article by Propelling Brands’ Adam Needles discussed the fact that according to SirusDecisions, less than 10 percent of B2B businesses have successfully redefined the necessary role of high-impact lead generation and lead nurturing that will be required in 2010 and beyond.

I don’t want to steal his thunder, so go read the article, but the major point is that over the past 10 years, the roles of sales, marketing, lead generation, and lead nurturing have consistently become more holistic.

Sales managers are recognizing that they HAVE to have usable, critical intelligence data about how marketing is getting them their leads—and vice-versa, marketing managers are realizing that their efforts have to line up from Day 1 with what sales is trying to accomplish.

Every marketing and sales touch point is becoming increasingly attached and interactive with a half-dozen other touch points along the way—and for businesses to really get what they need out of their marketing spend, it has to be this way.

Trish Bertuzzi and The Bridge Group provided a set of data that added some weight to this assertion. Their survey of 115 companies indicated that dedicated lead generation/lead nurturing employees have nearly doubled in the last three years, and that there’s increasingly a split—almost exactly 50/50—of which department lead gen reports to, sales or marketing.

While there will never be a total overlap between sales and marketing, I don’t think the time is far distant that we may see the development of a new, hybrid department that works as an intermediary between the two. The “Market Oversight” department, or “Sales Analytics” department, will have the specific role of measuring, testing, and developing the ways in which sales and marketing will combine their efforts.

The Harvard Business Review says our customers don’t want to talk to us.

While a sobering thought, I’m also wondering if this doesn’t in part explain the move to “cloud computing” and SaaS over the last ten years.

SaaS takes away some of the most frustrating customer “touch points” of software—maintaining hardware compatibility, the frequent need for updates/patches, as well as having to completely relearn a new interface for every application. Web apps use concepts we’re already familiar with—clicks, links, embedded content—and puts it in front of the user.

Though the occasional unreliability of Internet service can be a problem, to me SaaS represents a trend in this idea that “self-service” often trumps “customer interaction.”

Another quick point:

We’ve been saying it for a while now, but it’s nice to see someone else is taking up the mantra:

Selling Power recently posted an outstanding article describing what we’ve known was coming for sales teams—that technology is going to replace some jobs, and only the most qualified sales reps that are willing to adapt are going to survive.

Inside sales is replacing “outside” sales because it’s faster, more cost effective, and provides more opportunities to leverage the power of technology to improve performance.

Inside sales is more scalable, and much easier to implement across locations/divisions.

We just put out a press release about a ResponseAudit we did on the 57 vendors of LeadsCon East 2010.

As usual we started about a month ago submitting fictitious leads on their websites with real phone numbers and email addresses to see how fast they would respond to leads on their own site.

63.2% never responded.

The fastest was Speak2Leads at 4 minutes 23 seconds, they also made 9 different attempts before they gave up. They are actually in the business of responding their leads quickly. I met Sammy Jones, their CEO, and he was pretty pleased with his system and their staff.

The average vendor who did respond sent 2 emails and made 2 phone calls (better than previous audits.)

The average response time was 56 hours, 5 minutes, and 26 seconds (the worst of previous audits.)

Previous audits:

Omniture Summit 2007 – 54 hours 5 minutes
Dreamforce 2008 – 44 hours 31 minutes
Dreamforce 2009 – 41 hours 7 minutes 

Here are the top five companies who responded:

I know it is a really small audit with only 57 websites audited (Dreamforce 2009 had 2875 audits performed), but it was disappointing that the very industry that generates the leads is the slowest so far to respond to them.

The good new is that there is lots of room for improvement.

As a C-level manager for my company, I get pitched on new technology products a lot.

Now obviously I’m a big believer in the power of technology to transform inside sales and marketing processes. When I started 20 years ago as a sales manager at then Franklin Quest (now Franklin-Covey), the coolest technology on the market at the time was a fax machine.

Now we have CRM, dialers, sales force automation, automated email and drip campaigns, iPhones in every pocket, streaming video, the Web, SEO and PPC, blogs, Twitter, LinkedIn . . . .

But the fact is, the longer I stay in this business, the more I realize that in many cases, when a company uses technology to help them solve a problem, the most valuable part of the process isn’t the technology—it’s the reexamination of the process itself.

Sure, new technologies can make dazzling improvements to productivity, but it’s the insight gained by really focusing on the problem that often becomes the most valuable asset of change.

Sales consultant Dick Lee has a fabulous article that partially addresses this issue, stating that throwing technology at a problem without redesigning the process and attitudes surrounding its use is a near sure-bet failure.

So why are we so hesitant to address process?

• Because it’s uncomfortable.
• Because we have to actually change.
• Because it means we have to admit that we may have been wrong in the past.
• Because a lot of people have invested a lot of time, energy, and money into developing the current process.
• Because in some cases, changing a process means employees’ reputations are at stake.

As much as I want it to be true—because it’d mean my company would make a whole lot more money—simply throwing technology at a problem doesn’t inherently solve it. Confusing a technology problem with a process problem leads to costly, sometimes fatal mistakes.

So the next time you get pitched by a technology vendor with something that’s going to “revolutionize” your company, don’t necessarily be skeptical. Just make sure that you couldn’t solve the same problem by simply talking to Bob or Jill down in production, and making a clear, definable process change.

I don’t normally like to do shameless self-promotion of my company on this blog, but Steve Watts, one of my chief marketing gurus, posted something interesting today on the InsideSales Insider. He brings up an article from CopyBlogger discussing Chet Holmes’ book, The The Ultimate Sales Machine.

Having read Chet Holmes’ books for a number of years now, I was interested to re-read the principle of the “Desperate Three Percent,” and immediately associated it with “The 15 Time Wasters of Marketing and InsideSales.”

The “Desperate Three Percent” are the three percent of buyers—in any product category or market—that are specifically ready to buy.

But as CopyBlogger points out, there’s a whole bunch of people not ready to buy who can be nudged into buying with the right approach and strategy.

And one of the ways you can start “nudging” is to stop marketing broad and shallow.

Here’s what I mean.

In “The 15 Time Wasters,” I talk about the fact that when you market yourself broadly, it becomes too hard to differentiate yourself in all of your target markets. It’s better to serve one market fantastically well than to serve 10 or 12 markets “mediocre-ly.”

The solution is instead of trying to reach 15 different markets and verticals, start with one, and conquer it.

Narrow but deep, not broad and shallow, wins today’s marketing battles.

Whether that market is a physical location (”I own the city of Billings”), or a specific vertical market (”I’m the number one solution for road bike enthusiasts”), the principle is the same—word of mouth flows from market leadership.

When you own a market, people naturally gravitate to you. It means you’ve proven that you can solve one real, specific problem for that market.

And if you can solve one problem, people assume, it means you can solve more than one.

A few thoughts about Apple’s recent PR problems:

1. When your client has a real problem, simply telling them “You’re holding it wrong” isn’t a real solution.

Even if it’s the truth, clients and prospects rarely want to hear that their process is to blame. Even if it is actually part of the problem, be extremely careful and proceed with caution. A lot of people at the client’s organization have spent a lot of time and energy putting the current process in place.

2. As dense as the general public (read: your clients) often seem to be, they can tell when you’re pushing spin, and when you’re really trying to solve their problem.

You think that the G4’s buyers, many of whom had owned earlier iPhone iterations, were excited to hear that their brand new hardware had an engineering defect, only to have Apple saying to the press, “It’s no big deal, just buy our slip case for it!”? Ignoring a problem doesn’t make it go away, it just comes across as arrogance.

3. Be extremely cautious about what you treat as a “random outlier,” and what you treat as a real problem.

Bad news never travels well. You think the V.P. of production wanted to have a meeting and tell Steve Jobs, “Hey, um, I think there’s a problem with our antenna design?” How soon did Apple know they had a problem on their hands? Within the first 5,000 units sold? The first 25,000? First 50,000? (Some seem to think Steve Jobs showcasing the Apple slip covers during the product launch meant they knew about it all along.) One of the biggest problems that leads to disaster is the fact that employees don’t want to communicate bad news for fear of the consequences. If your employees don’t feel empowered enough, or trust management enough to let you know when you have a real problem, your corporate culture is in dire need of change.

4. If it’s real, own the problem.

The words “Yes, but . . . ” should never leave your lips until the problem is solved. Clients and prospects don’t want to hear about how amazing you were six or 12 months ago. Don’t point the finger at other vendors, or other people in the company. “Well, if So-and-so Technologies had made Widget X properly, we wouldn’t be having this problem.” It’s not their problem, it’s yours. Fix it.

5. When you definitively know there’s a problem, act decisively, act now, and tell your clients what you’re doing about it.

The worst thing you can do in a situation like Apple’s is to “circle the wagons” and go silent. Open channels of communication tells your clients that you’re more interested in actually fixing the problem than in trying to save face. Be proactive.