I.

Craig Rosenberg is generally a pretty smart and insightful guy. As the self-proclaimed “Funnelholic” and Focus.com VP of Products and Services, his extensive background in B2B sales and marketing gives his voice some weight in our space.

So when Craig (@funnelholic on Twitter) recently posted that “Being a B2B buyer sucks,” I snapped to attention.

All four of his points were excellent, so read the article, but I was particularly taken by Point #4:

The ‘contact us’ box sucks. I see that, and I just think black hole. The dropdown you provide doesn’t make me feel like I am going to go in the right direction. When you walk into a good store, someone asks, ‘How can I help you today?’ How about taking that methodology to the ‘front door’ of your buying process?”

Craig, you have no idea how true that is–and the Harvard Business Review proved it.

According to the HBR article, 26% of all online “Contact Us” Web form requests go completely unanswered (our own internal studies show the number can range from 25% to as high 40%). It’s as if the business believes you don’t exist.

Another 25% wait over 24 hours to get back with you, the real-world equivalent of walking into Nordstrom’s and having the cashier tell you, “Come back tomorrow when we feel like talking to you.” Another 6% wait between 12 and 24 hours to contact you.

Is it just me, or is the ridiculousness of this state of affairs beyond description?

Everyone—and I mean, EVERYONE—talks about paying more attention to the customer, treating clients and prospects like gold, because they’re getting harder win and keep. Yet if you’re the average company, nearly 60% of direct Web-generated inquiries—people who come to YOUR Web site and specifically ask to be contacted—have to wait at least 12 hours to hear back from you, assuming you get back to them at all.

I know I beat this nearly-dead horse on a regular basis. But for some odd reason, I keep finding opportunities to address the issue (wonder why).

II.

Loved this quote from Kevin Davis in his article, “Are You Selling Too Fast?” over on the American Express Open Forum:

I’ve been delivering sales seminars for 20+ years. When I ask salespeople to tell me how they sell, they rattle off the steps of their sales process. When I ask how their customers buy, they are stumped.

This disconnect between selling and buying is the root cause of many sales problems.”

It’s easy to park our rear ends in our office chairs and plot our pipelines for the month—but we’re not really thinking about what the prospect is going through to make their buying decision.

The best sales reps know how to get into the customer’s buying cycle, and engage with how the prospect’s decision will be made, not how the product will be delivered.

David,

I like the table approach you have used to try and illustrate the situations by which you decide to use inside sales versus outside sales.

I wanted to add my observations to yours. As the President of InsideSales.com, I have the opportunity to observe hundreds of companies as they are in the process of starting or growing an inside sales team. More and more we are finding companies with bigger ticket items and higher product complexity being sold effectively by inside sales or remote sales teams.

In fact, taking the definition of inside sales as remote sales, we are finding that a majority of the time spent by an outside sales person is spent actually doing inside sales, or selling remotely. In looking at the table below, you can see I have noted that Bigger ticket items still benefit with a face-to-face meeting, but there are far fewer of them in the sales cycle, with much more meetings facilitated remotely.

Here is how I would modify your table:

Item                                                     Inside Sales            Outside Sales

So when the numbers came back after six months, I was surprised that he was nowhere near hitting quota.

“Hmm, that’s interesting,” I thought. “I figured he’d be a star, let’s give him a little more time.”

End of the next quarter, same results. Now I was panicked. How could he have possibly been failing? What had I done wrong? What was wrong with our sales process? If this “superstar” sales rep wasn’t hacking it, surely we had to fix something, right?

I talked to the front-line sales manager about ideas. We went over sales collateral. We reviewed pitches and product demos. We mentored.

And what we discovered was that in spite of his evident natural talents, they never really translated into the rigors of his daily work. There was an intellectual laziness, an assumed air of success–”This is going to work simply because I’m the one doing it.”

Now of course some long-time sales professionals might argue the point. “Of course you have to assume success,” they’d say. “You have to have confidence that you’re going to get the sale. If you can’t be confident, you can’t succeed.”

Which I completely agree with, but with this rep it was different. His confidence was purely internal, not external. His confidence in himself never translated to confidence in management’s goals and directives. It never translated into confidence in our sales processes and technologies.

There was no question he wanted to succeed, but he wanted it to be on his terms, on “his watch.”

Needless to say, his close rate never improved. His pipeline was always full, but at the end of the month/quarter revenue was scarce.

And worst of all, the rest of the reps had picked up on the fact that he wasn’t really being a team player. They resented when he would get “hot” leads, because, they grumbled, “He’s never going to get anything out of them anyway.” Letting him go ended up being a double-positive, because the rest of the team worked harder, and we weren’t throwing good leads into a dead pool.

Ultimately I learned a few things:

1. Trust the numbers, not appearances. Baseline numbers are set for a reason, so unless they’re a complete sham, use them. If you don’t trust your quotas, why have them?

2. If you don’t trust the numbers, you don’t trust your process. If you can’t believe what the numbers are saying, it means you believe there’s a break in the system.

3. Employee failure is expensive, but the situation allowed us to get a fresh look at what we were doing. Stagnation is today’s ultimate business-killer, and while a total overhaul of a team or process isn’t always necessary, a minor “reboot” isn’t a bad thing. Embrace opportunities for change.

4. Reps need to be aware of the line between confidence and intellectual laziness. It’s okay to occasionally do an “end around” past company process if it’s going to make a prospect happy. But constantly justifying breaking the rules because “It’s the way I get success” should be a red flag that something is amiss.

Though written in 2008, the piece is a brilliant strategic blueprint for long-term management of an SaaS company, written by Byron Deeter, a key executive with Bessemer Venture Partners.

Byron has worked in the SaaS space since it first came on the scene, and serves on the board of a number of current SaaS companies, most notably Eloqua.

The Ten Laws:

1. Key metrics are Contracted Monthly Recurring Revenue (CMRR) and cash, not “booked” sales like with premise-based software solutions.
2. Keep the sales team small (3 or fewer) until reps are consistently hitting $100k in MRR.
3. Separate “hunters” and “famers.”
4. Creating active channel sales partnerships is difficult. You’re going to have to sell direct for a long time.
5. Stay local (a.k.a., North America) until you hit $1 million in MRR.
6. Don’t use multiple data centers until you absolutely have to.
7. Tenant-based installations = a big no-no (there’s one production code base, and you control it. Period).
8. Savvy online marketing is vital for leads and sales.
9. Cash on hand vs. growth is going to be a constant trade-off.
10. SaaS generally requires a 4-year allotment of “growth capital” to get off the ground, so pace spending and expenses.

**Bonus Item: You can reasonably ignore any one of items 1-10, but if you’re missing two or more, it’s probably time to re-evaluate how you’re running your SaaS business.

This summary hardly does the post justice, so go check it out here.

The two most interesting points to me (being focused primarily on sales) were #3 and #4.

Item #3—Just as Byron describes, we’ve found that having back-end account managers to “farm” current clients and keep them up to speed is crucial. Part of it has to with the nature of SaaS itself. SaaS means constantly updating your software, and adding features that create more value, and without actively getting that information to clients, you’re losing out on potential revenue. Our dedicated account management team has meant huge dividends, and especially for the fast pace of SaaS, it’s impossible to expect a “hunter” sales team to work in both roles.

Item #4—InsideSales.com has run directly into this problem since nearly the beginning. For several years we had a channel sales VP, Troy Fullmer, who is one of the most engaging, power-packed, action-oriented executives you’ll ever meet, and one of my favorite people I’ve ever worked with—but just as Byron describes, we had a very hard time putting him to use effectively. The whole point of SaaS is that users are actively avoiding having to work with “go betweens,” and to this point in our company’s existence, channel sales partners seem to add more overhead without adding much value.

1. Don’t get too cute in your sales presentation.

Your product and value proposition should largely be enough to get a close. If you’re having to get “creative” to “find the pulse” of your prospect, take a hard look at just how qualified they are. If your marketing team is generating leads that consistently require a song and dance just to get an appointment, it’s time to start evaluating some new lead sources.

2. It’s better to make a decision that’s “good enough” and go with it than to agonize (and waste time) over making the perfect one.

Like most things, “careful thought and analysis” is useful in moderation, not in excess.

This concept has served me well over the years. You can always adjust plans on the fly, but it’s pretty hard to accomplish much with your backside stuck to the bottom of your chair.

3. There’s ultimately only two obstacles to success: stuff out of your control, and stuff people do.

Budgets are out of your control. Either a prospect has the money or they don’t. But what if you could get a prospect to rethink how the budget funds are allocated based on the value you show them?

4. When people fail to execute a given course of action, it’s usually for one of three core reasons:

1. In their minds they’re still deciding over whether it’s really the best decision (out of fear, lack of information, lack of experience, lack of perceived value, etc.).
2. They don’t know how to implement it.
3. They’re actively sabotaging it for the sake of their own personal agendas. This can be as extreme as Enron-level fraud, or as simple as employees surfing the Web on company time “because they think they deserve it.”

5. It’s not always the case, but sometimes consistency trumps performance.

My sales metrics friends and gurus at The Bridge Group are constantly evangelizing the fact that sales teams should rarely be over or under their quotas by more than 10%. Massive over/under numbers in sales forecasting means either managers and reps are sandbagging, or the company isn’t getting good sales data.

But a few months ago, sales productivity guru Paul Castain had some interesting advice in a blog post entitled, “For Those About to Rock, Show Up First!”

If you haven’t read the article, you might think that the title follows along with what I’m espousing—that we need to “show up first,” be the first person on the scene, be faster than the competition, etc.

In reality the point of Paul’s article wasn’t about being the first person to show up—the point was to show up at all.

Too often we barricade ourselves into a place where we know we can be comfortable.

Comfortable and barely productive.

We tell ourselves stories about how “These prospects aren’t really going anywhere,” “That cold call approach will never work,” or “They’ve never heard of us, why would they listen to me?”

We come up with every reason not to put forth the effort to get ourselves out there. Because it’s risky. There’s a chance we’ll be rejected. A chance that there’s going to be an emotional backlash because some prospect is having a bad day and doesn’t want to talk to us.

As much as I believe in the power of immediate response, a lot of the time in sales, the choice isn’t how quickly we show up, the choice is to show up at all.

Now let’s be clear—given the opportunity with a prospect, the best choice is to “show up first” and be the first one there. Research from MIT shows that immediate response to Web leads within minutes, combined with consistent, proactive follow-up increases contact and qualifying rates over 21x over waiting even a day.

Furthermore, most sales industry studies show that the first respondent to a new inquiry gets the sale between 30 and 40 percent of the time, because they typically create a sense of “loyalty” with the prospect. If there’s one change you could make today that would have immediate impact on your business, it would be to get in front of the prospect first, do it within minutes, and do it over the phone. You’ll have a serious competitive edge in your market.

But before you can “show up first” you have to “first show up”—and if you can’t manage that, all the sales advice and business strategy in the world isn’t going to help.

And in large account B2B, recognizing when a prospect puts out signs of engaging in these same types of “Pain Avoidance” tactics can pay dividends.

In Griffin-Hill’s Integrity Sales Model, “Pain Avoidance” is one of their classic “5 P’s” of identifying prospect need—Profit, Pleasure, Prestige, Preservation, Pain Avoidance. And though “Pain Avoidance” prospects aren’t as common as other types, in the right circumstances a prospect may be attracted to a product or service even if it’s twice the price and 3/4 the functionality of the competition—because they don’t have to think.

Prospects motivated by extreme “Pain Avoidance” have a much different approach to perceived value. They don’t ignore price and functionality, but it’s more important to them to let someone else handle as much of the process as possible. In their minds, money is a small price to pay to avoid the “pain.”

Sales reps often mis-identify “Pain Avoiders,” because their objections are interpreted as concerns about price or functionality, when in fact it’s the opposite. The prospect sees the value, they’re just highly concerned about what’s going to be required to get it.

On the phone, “Pain Avoiders” will often seem more concerned about how your product or service is going to disrupt other departments instead of their own, as a deflection mechanism against their desire to not deal with change. “Pain Avoiders” are generally highly attached to the status quo, and are only in the market for a new solution because their situation and circumstance require it. They often have a maddening ability to show interest in what you’re selling without particularly committing to anything concrete (because change = pain = something to be avoided).

In the consumer space, Apple is a classic example of targeting “Pain Avoidance.” While they frequently tout the functionality of their devices, one of Apple’s most compelling “value propositions” is Pain Avoidance—avoiding viruses and spyware, avoiding complicated interfaces, ease of setup, total interoperability between Apple devices. And a lot of consumers are willing to pay Apple’s price premiums (50-100% higher cost against comparably spec’d offerings) to get it.

In the same vein, if you find a prospect that seems sold on the product or service, but is exhibiting “Pain Avoidance” symptoms, do some needs analysis and think about restructuring the pricing and service levels. Typically this means that they’ll be paying a higher price premium for the assurance of the service they’re going to receive, but in the end they’re much happier with the perceived “value.”

In Part 2, I want to take a closer look at this concept, because as sales and marketing teams continue to evolve, and move ever closer in alignment, at some point the “culture war” between the two will spill over into the corporate workroom.

In review: Sales “culture” is business- and results-oriented; marketing “culture” is connection- and human-interest driven.

The question becomes, when push comes to shove, which viewpoint takes precedence?

BNet Business guru Geoffrey James gives us the answer—and it’s based on a belief I’ve long held myself:

“In business-to-business (B2B) firms, the legendary conflict between sales and marketing stems from a difference of opinion about what marketing should be doing. Most marketing professionals believe that they should primarily be concerned with market research, building brand equity and creating marketing materials. Most sales professionals believe that marketing should be generating qualified sales leads.”

Very true. But the next part is where the article gets interesting:

“This is part of the blog where I’m supposed to be diplomatic and politically correct, and write some yada-yada-yada about teamwork and respecting differences, etc., etc.

Forget that. Here’s the honest truth: Marketing is dead wrong; Sales is dead right. In B2B environments, marketing is only useful insofar as it generates qualified sales leads. Period. The glamorous activities near and dear to the hearts of B2B marketers everywhere have almost no impact on selling, other than driving up the cost of sales . . . [Marketing should be compensated] based upon its ability to reduce cost of sales. Period.”

And as much is it will pain my own internal marketing team to hear it, Geoffrey James is right.

I don’t want to devalue the work, effort, and talent of marketers (especially my own), but in the B2B space, the best value a marketing team provides is in the ways it can get my sales team more qualified leads today.

The question for B2B sales and marketing managers then becomes, what does this mean from a corporate development standpoint? How can you align a marketing team to produce leads without hurting, or challenging marketers’ deeply held beliefs about the need to create an emotional connection between a buyer and a product, a person and a brand?

Stay tuned for Sales and Marketing “Cultural Alignment” Part 3

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.

]]> http://www.kenkrogue.com/best-practices/quick-sales-tip-dont-forget-the-gap-in-big-account-vs-small-account-technology-needs/feed/ 0 http://www.kenkrogue.com/best-practices/sales-tip-of-the-day-interest-is-often-the-counterfeit-of-need/ http://www.kenkrogue.com/best-practices/sales-tip-of-the-day-interest-is-often-the-counterfeit-of-need/#comments Mon, 23 Aug 2010 23:36:04 +0000 Ken http://www.kenkrogue.com/?p=632 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.

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