Critical Success Factor 4: List Management

In Critical Success Factors 1-3, we discussed the importance of Content, Content Distribution, and Automation in the operation of B2B Sales. Here, we discuss the final factor, List Management.

Characteristics

Importance/Impact

Duplicate records

Duplicate records are inevitable as you continually build your marketing list. However, they pose a significant problem and must be continually managed. At any given time, you should strive to keep your duplicate records at under 1%.

Duplicates happen when your marketing team uses different sources of lead acquisition and enters leads into your database without first checking for duplicates. Sometimes marketing does this in order to keep a prospect in multiple marketing lists. However, there are ways to do that without creating duplicate records.

Opt outs

A key aspect of managing lists is ensuring that someone who opted out of one of your marketing programs is opted out of all, unless the recipient chose to opt out of specific marketing programs.

You should treat opt-outs very seriously. If you receive even a handful of spam complaints, you could become blacklisted, which means you would not even be able to send emails internally to each other until you clear yourself from the blacklist.

Bounces

Email bounces occur when mail can’t be delivered—this can be because the person is no longer at the company; she created a false email address just to get something she wanted; or because she created a temporary email for such a purpose, and it is no longer active.

You must keep your lists clean on a regular basis as bad records give you an inflated representation of your actual audience size. Too many bounces can also cause you to be flagged for blacklisting.

Email validation

If your sales reps bring a list of prospects with emails and claim that these prospects wish to receive marketing emails, they should first be validated before being placed in your system. There are online email validation tools that start at $14/1,000 records, and the prices drop for larger list sizes.

List segmentation

This is perhaps the hardest part of list management—keeping a tight control of the audience so you can send highly targeted messages. For example, you want Jim Jones to be part of your overall monthly newsletter, but you also want to keep him on your Hospital CIO list and your overall CIO lists. What you don’t want are three records of Jim Jones—you just want Jim Jones to be in all three marketing campaigns.

As you can see, a lot of work goes into creating engaged marketing audiences that are more inclined to meet with your sales reps, thereby providing you with a consistently high quality and quantity of sales pipeline. You may need help with some of this work. The next section covers that. 

Critical Success Factor 3: Automation

Both Marketing and Sales Automation are crucial to the success of B2B sales.

Marketing Automation

Purpose

To automate the creation and nurturing of a lead by delivering the right content at the right time based on action previously taken (or not taken) by the prospect.

To provide intelligence on the buying intent and readiness of marketing created leads and automate the handoff to the next step based on lead scoring and grading.

Used by

Marketing

How it should work

Should be set up to send targeted messaging to a targeted list in the right logical sequence, grade and score the leads based on the action they took and their profile (title, company size and industry, etc.), and automatically flag the right high-scoring leads in the system that Prospecting and Sales work with.

Sales Automation

Purpose

To automate, facilitate, and accelerate the time consuming and expensive one-on-one new customer-acquisition related activities in which your Prospecting and Sales teams typically engage.

Used by

Prospecting, Sales

How it should work

Marketing Leads should only be made available in the CRM used by Prospecting and Sales when that lead is ready to be further qualified.

The system should enable the Prospecting team to see their high-priority work views (those they have already contacted but have not yet fully qualified) separately from their general prospecting pipeline (those they haven’t touched at all or are still pursuing to make first contact).

The final status of the lead here is SQL (Sales Qualified Lead), which means the lead is qualified and has agreed to a meeting with a sales rep.

The system should be able to do validation and ensure that all the necessary fields are filled out.

The system should automatically assign the lead to a sales rep and send the rep a notification email without the Business Development Rep having to do anything further than changing the status when all fields are completed.

Such automation ensures data integrity, accelerates sales, and avoids human error.

Figuring out how much to pay for Automation

There are several marketing and sales automation tools available, and at significantly varying prices. The question is, how much should you pay for a given automation tool?

The answer, generally, is that it depends on what you need—more capability and flexibility comes at higher prices.

However, we think that a better answer comes from considering its impact on the productivity of your various teams. Remember that your payroll is likely the single largest expense category for your company. Anything that improves productivity (improves the ability of the same employees to do more without working longer hours) should be worth serious consideration.

Here is a simple analysis to make the point. Let’s assume that your average, fully burdened salary for a member of your marketing/prospecting/sales team is $50,000 per year.

Product A is clearly far cheaper than Product B. However, Product B can improve productivity by 10% while Product A can improve productivity by only 5%. In the end, Product B is the superior value since the question is not just how much the product costs, but how much impact it has on your operations. The last line compares the two numbers by dividing the net value by $50,000 to arrive at the net productivity gains.

   
 

Product A

Product B

Fee / user/ year ($)

300

1,800

Productivity Gains (%)

5%

10%

Productivity Gains ($)

2,500

5,000

Net gains ($)

2,200

3,200

Net gains (%)

4.4%

6.4%

 

The Issue with Data—What is too much versus too little

One of the recurring problems we come across is that the management’s need for data is at odds with its need for employees to keep their work simple and efficient. If you want a lot of data, then you are asking your people to spend more time on data entry and less time on what should be their primary work.

The key is to get the data you need as a natural outcome of the work they do. This is a lot easier said than done, and any system that you use must be thoroughly evaluated before implementation.

The first step is to identify the essential data you need to qualify a lead and move her through your sales stages. This should not require much data, but it should be clear to all your teams that without this information, they are likely to waste a lot of time and effort trying to engage the wrong people.

On top of that, there may be additional data you want to collect, but be judicious and let employees provide this in a free text format rather than forcing them to enter into discrete fields. You are far more likely to get useful information this way, since forcing them to enter data could prompt them to just click on something to get past your validation.

The end goal is twofold: to provide employees with reports and dashboards that help them manage their day-to-day productivity, while you gain insight on what is working and what isn’t.

Make these two goals converge, and you will have plenty of high quality—and useful—data.

Read about the final Critical Success Factor, “List Management”.

Critical Success Factor 2: Content Distribution

While the first critical success factor in B2B sales involves the quality of your content, the ways in which that content is distributed to your audience is also important.

Medium

Key Metrics

Description

Email

Click through rate, unique opens

The purpose of email is to produce awareness of something you want the recipient to notice. You want to point out a critical issue and direct recipients to where they can learn more about it.

Therefore, your email campaign must be designed to support your prospects’ desired process for finding solutions to their problems, as well as the vendors with which they want to partner.

Emails must be designed to get a click to where you can engage the prospect more. Of course, emails must be opened in order to get the click, but the opens alone tell you very little.

Website

Inbound leads, search ranking, web traffic

Your website’s number one role is to act as the central repository for the information your prospects need to determine that you should be on their short list of vendors they should engage to solve a particular set of their problems.

It is a powerful communication tool and must be used as such. You must rely on your website to bring in leads straight to your sales team, as well as to nurture other leads for the long term.

You must know what key terms your prospects use to search, which pages are the most visited, and where they go from there. Continually optimize your website to attract, engage, and nurture prospects.tor

Social Media

Followers, likes, shares

Your social media platforms (Facebook, LinkedIn, Twitter) are where you truly build your brand. They allow you to create a community of loyal customers, employees, and future employees.

Social media is the appropriate place for you to share your views that are more socially and politically oriented, such as environmental responsibility, diversity (cultural, racial, gender, age, etc.), and so on. It is a great place to post new job openings, have current employees discuss the importance and impact of those roles, etc.

In short, your social media properties are where you correctly position your company.

Read about the third Critical Success Factor, “Automation”.

Critical Success Factor 1: Content

One critical success factor in the operations of B2B sales is content. Content is how a prospect can determine the degree to which a vendor understands her problem and can solve it. The more quality content you have, the more certain she becomes that you must be on her short list of vendors to evaluate— making it easy for your sales reps to meet with her.

Since this is a journey for the prospect to take, you must have a variety of content types designed to get her started on this journey so that she can acquire more knowledge and conviction regarding your company and continue to an actual sales engagement with one of your sales reps.

Type

Purpose

Usage

Emails

Create awareness

Email continues to be the most effective outbound communication medium. Its sole purpose is to make the prospect aware of a specific problem and what the logical next step might be towards solving that problem.  Ask the reader to take a small incremental step forward, but always have a complete means by which the prospect can get in touch with you if she is ready to engage.

White Papers

Educate: the generic problem and solution.

The purpose of a white paper is to enable your prospects to clearly see the type and extent of the problem(s) they have, analyze its cause(s), and provide a vendor-agnostic solution to the problem. In other words, your objective is not to sell your product or service, but to establish yourself as a credible partner that can help your prospect solve their problem(s).

Webinars

Educate: specifically about your solution

Webinars are similar in purpose to White Papers. They both require a significant amount of time and effort to produce quality content. However, webinars are typically expected to discuss your product and solution, perhaps with a demo (if appropriate).

Case Studies

Prove

Case studies give the prospect a practical and relatable example of how your solution solves problems such as the one the prospect is currently experiencing. The power of a case study can be diminished if you are unable to use the customer’s name (especially if it is a highly recognized company). Be sure to do what it takes to get permission to mention the client by name on at least a few of your case studies.

Blogs

Educate Interest

Blogs are relatively short (1-2 pages), highly targeted, and highly educated opinions. Have your internal experts write them, and then have them polished off by your editor.

Video / Animation

Arouse curiosity

These are short (60-90 second) video clips that explain the main issue and the solution. The goal is to create a fun and engaging way to communicate information at a high level.

Product Information

Educate

This is where you get to talk all you want about your products and services. It is best to keep the information simple, factual, and engaging.

Read about the second Critical Success Factor, “Content Distribution”.

The Operations and Factors that Lead to Success in B2B Sales

Putting it all Together

 

When assembled, the entire system consists of three very distinct but related processes, each feeding the next with the right kinds of leads.

Marketing’s job is to deliver the necessary number of highly targeted MQLs that the Prospecting team will use as its funnel.

The BDRs will then call, qualify, and schedule appointments, thereby delivering the necessary number of SQLs that the sales team needs to build its sales pipeline.

As we have stated, it takes 25-40 dials to reach someone, and you want to make sure that after all that effort, the person reached is the right person. We can’t emphasize enough the need for a highly targeted campaign.

You will notice that the top of each funnel is slightly bigger than the bottom of the preceding funnel. This suggests that each operation must also “make” its own required qualified lead. Prospecting must find its own MQLs in addition to what Marketing provides, and Sales must find its own SQLs in addition to what the Prospecting team delivers.

Finally, this is a closed loop. Not every appointment will happen, and Sales will ask the Prospecting team to reschedule the prospect (lead). More importantly, Sales may find that a prospect is not quite ready to buy and will place the prospect back into Marketing nurture, with a task for Prospecting to try another appointment— say, in six months. Your systems must be well integrated in order to automate this “send back” to the previous funnel.

The overall concept is fairly straightforward. However, given the differences in the three operations— as well as the need for different systems to manage each operation and the need to integrate these systems—the execution part is not that easy.

The key to successful execution is in clearly understanding the Critical Success Factors (CSFs) that will make or break these operations. There four CSFs are: Content, Content Distribution, Automation, and List Management. Read about the first CSF here.

Operational Excellence (Part 3): Sales

Your sales team is by far your most expensive resource, compared to Marketing and Prospecting. While your marketing must be targeted, the same marketing assets and messaging will go out to large numbers of prospects.  And while your prospecting activity is one-to-one, each engagement happens for a very brief time. A good BDR can work a list of 200 or so prospects in any given month.

Sales, however, is absolutely a one-to-one process and not very scalable. Your sales people will likely find it hard to work with more than 20 or so prospects at any given time.

 

Objective (s)

Every member of your sales team must hit at least 80% of his/her quarterly sales targets on a consistent basis.

Process

Sales Qualify→ Prove→ Propose→ Negotiate→Close

All B2B sales will likely require at a minimum of the following stages.  While there may be more stages, these are the “gateway” stages that determine if a deal will close or not.

  • Sales Qualify—the most critical stage. During the first call, reps must determine: whether the prospect wants to address this issue now rather than later; whether she is part of the decision making process; whether or not pricing is going to be an issue; and whether there are other alternatives that are far more likely to be selected than your product. This last one is the main reason why so many companies miss their revenue targets—they waste too many resources chasing deals that will never close.
  • Prove—Sales reps have to prove that their solution can solve the prospect’s problem and deliver reasonable ROI, so that the prospect will not experience any personal embarrassment from spending resources on an ineffective solution. The question is what kind of proof does the prospect want—a demo, customer references to speak with, ROI calculation, all of the above, or other?
  • Propose— No proposal should be submitted until the first two steps are completed and it is still a go with the prospect. The purpose of the proposal should only be to present the prospecting in writing— what the rep and the prospect have already agreed upon. The rep should NOT give out a proposal unless he or she thinks that the ONLY thing left to do is to negotiate pricing and Terms & Conditions. In other words, a proposal should be made when pricing is the only factor keeping the prospect from choosing your firm, and aside from that, the prospect wants to give you her business.  
  • Negotiate—expect some negotiation and be prepared to counter by offering more value rather than price discounts.

If the above stages are done properly, good sales reps can expect to close at least 33% of their Sales Qualified Leads. Otherwise, the ratio is likely under 20%.

Key Metrics

Average deal size; average sales cycle; average closing ratio. If you watch these metrics closely and enforce discipline, your worst performing sales rep should not bring in less than 25% of what your best performing sales rep brings.

Read about the first and second operations in B2B Sales.

Getting B2B Sales Working Again

B2B Sales absolutely depend on three distinct and different, but highly related operations working seamlessly together. There are very good reasons for why three operations are needed, and why they are so different from each other. It is all about the economy of scale and specialization necessary to deliver high volumes of high quality leads that will convert into sales, at a higher and faster rate.

Below is the “dashboard” view of these three operations.

Marketing Operation

Operational Goal

Continuously find new prospects that fit your ideal customer profile. Engage and move them closer to a buying intent.

Core competencies needed

Market research and analysis (customers, competitors, and partners); work with Sales to identify a compelling message; build assets to support and explain the message; distribute content over a wide range of media; track engagement and move prospects further down the funnel.

Management Goal

Message focus and discipline; building high quality assets; strong skills in managing leads down the pipe; keeping in step with Prospecting and Sales.

Prospecting Operations

Operational Goal

Connect, qualify, and set appointments for the sales team with prospects that are seriously looking at buying a solution.

Core competencies needed

Ability to make 70+ dials a day; ability to reduce complexities to the core business issue; ability to communicate these issues in 20 seconds or less to busy C-level decision makers.

Management Goal

Boost both quality and quantity—conversion rates of MQLs to SQLs; conversion of SQLs to sales pipeline.

Sales Operations

Operational Goal

Consistently close business to achieve targeted revenue growth.

Core competencies needed

Ability to consistently meet quarterly sales objectives by deeply engaging prospects and winning quality business against competitors and alternatives.

Management Goal

Ability to get consistent performance out of every member of the sales team and ensure that the weakest performers are within 20-25% of the strongest performers. Avoid the temptation to rely on one “rainmaker” who single-handedly saves the entire quarter.

We discuss the first operational area, “Marketing”, here.

What Do Buyers Want?

The Three Basic Types of buyers

Three kinds of buyers exist in the B2B market: Visionaries, Pragmatists, and Conservatives. Because these are very different types of decision makers, they respond to very different messaging.

 

Characteristics

Role of Content & Messaging

Visionaries

Visionaries constitute a mere 15% of all B2B buyers. This group spends more than average before they hit the buying pain threshold. They are always in pursuit of competitive advantage and are willing to take big risks to gain big wins.

Visionaries are attracted to the new and first of a kind. They don’t mind that no one has used the product or service before. They buy based on the promise of “game-changing” advantage. Content and messaging should show “possibilities” rather than what is already proven.

Words such as “latest”, “bleeding edge,” and hyperbolic statements in general are OK to use.

Change is everything. Vision is the key here. Product position is the goal.

Pragmatists

Pragmatists typically make up a third of B2B decision makers on average. Generally, they view themselves as rational, numbers oriented, and unemotional decision makers. They typically look for incremental improvement in productivity and are willing to spend more to get more.

Pragmatists look for quantifiable evidence before they make a purchase decision. White papers, case studies and ROI calculations (not brochures) are what they typically want to see before they begin serious evaluation. Statements must be measured and low key—key phrases include “benchmark”, “A/B testing”, “cost benefit analysis” and so on. Market positioning is what works best.

Change is not an issue as long as there is demonstrable value with change.

Market position is the goal.

Conservatives

Conservatives love saving and hate spending. Approximately a third of B2B buyers are conservative.  Conservatives value price discounts more than additional features. They would rather pay less for something they already receive rather than pay the same for more features or capabilities. Therefore, it is very hard to sell new products and upgrades to conservatives.

Conservatives respond to “establishment” marketing—how long you have been in business, how many customers you have, what recognizable companies are your customers, etc.

Words such as “oldest” draw them in.,

Change is the enemy, and companies that sell to conservatives must communicate that they will not change anything.

Company positioning is the goal.

 

A recent SAP study found that only 52% of B2B buyers believe their most recent purchasing experience met their expectations. Approximately 91% of all companies have increased their expectations of B2B interactions in the last two years. This failure in B2B sales is due to sellers falling short in three key areas:

Personalization

The 21st century has brought about an era of customization in B2B relations and sales. B2B buyers now expect sellers to present them with individualized and customizable solutions and purchasing processes. Most businesses attempting to sell to other companies use generic marketing messages and content that is mass circulated to every potential lead. This approach is outdated and fails to generate leads. Buyers want sellers that consider and market to their unique challenges and priorities. They demand that sellers provide metrics-based, scientific approaches that create.

Value

B2B buyers are tired of hearing generalized pitches from sellers. Instead, they want to hear messages full of new information about their industries and business concerns. A recent LinkedIn report revealed that buyers are five times more likely to engage with sellers that provide them with new insights about their businesses. Buyers require hard data and unique insights, not standard cut and paste sales messages, to engage in a transaction.

Content

The creation and distribution of content is key. B2B buyers are increasingly dependent on written content to guide them through the purchasing process. On average, buyers review a minimum of three pieces of copy in any given buying scenario. A 2014 Demand Generation survey of 600 companies found that 65% of businesses rated content as the most significant influence in a purchasing decision. It is important to note that content produced and distributed to generate B2B leads and clients must contain new, quality information that buyers were previously unaware of in order to be effective.

The New Realities of B2B Sales (Part 2)

In “The New Realities of B2B Sales (Part 1)”, we discussed shifts in Business-to-Business (B2B) due to the growing number of Millennials in the B2B market as well as the difference between strategic procurement and purchasing.

In Part 2, we have outlined two more changes to the realities of B2B sales and marketing due to shifts in the industry.

 

Reality 3: Competition is Global, Local, and Trans-Industry

Today, competition is local, global, and across industries. There are no longer any reliable boundaries that protect insiders. Competition can come from anywhere, in any shape, and in any size.

The Internet and the accelerated globalization resulting from it are changing market structures faster and faster, creating space for new entrants. Companies must be constantly vigilant in order to identify and close out these gaps. B2B companies in the US are generally slower in perceiving these changes since they are primarily looking at domestic markets. They miss competitors from outside the US and from outside their industries. They postpone changing until the pain and risk of innovation becomes less painful than the cost of maintaining the current company situation. This stagnation and commitment to the status quo makes it difficult for B2B companies to grow in their current geographic markets, let alone compete globally.

Global competition— from countries such as Brazil, China, and India— is increasing, as businesses in these countries are quick to identify and exploit new opportunities. These rising global powers are less tied to old ways; they readily embrace and encourage change in their sectors. US companies will have to “adapt or die” in order to remain relevant in their industries. They need to integrate the Internet, social media, and mobile applications into their sales models.

 

Reality 4: Digital Transformation of B2C Industries

In 2015, The Accenture Digital Transformation Study argued that the advent and modernization of technology has placed consumers in control of purchasing. With a plethora of eager sellers at their fingertips, consumers are now free to choose companies whose products meet their exact requirements. Consumers now demand valuable, relevant, high-quality content which can be accessed anywhere at any time. To remain competitive and profitable, businesses have little choice but to embrace these consumer demands.

B2C industries are attempting to meet the needs of their customer bases by turning to digital marketing and selling platforms, particularly in the mobile arena. Now and more than ever, the quality of the experience customers have while interacting and buying from a company is the biggest indicator of whether or not they will repurchase. In response, B2C companies are attempting to set themselves apart and improve customer satisfaction through digitized sales platforms.  

However, traditional B2C industries such as Financial Services, Retail, Travel, and Education are unsure whether to delegate online marketing and sales to in-house staff or to outsource. Over 90% of B2C companies now use 3rd party contracted companies to manage their digital marketing initiatives.  While they are figuring that out, high tech startups are taking away their customers by offering the same services faster, easier, and cheaper. Vendors that sell to B2C companies must step in and help their customers or lose them one by one as they go out of business.

These are some of the fundamental changes taking place in B2B selling. Sellers that are not making the necessary shifts to adapt to these changes will find it harder and more expensive to grow sales.

The New Realities of B2B Sales (Part 1)

The 21st Century Reality

A fundamental shift we see in Business-to-Business (B2B) is that prospecting and sales results are becoming more difficult, time-consuming, and expensive to produce. Lead conversion rates are lower, sales cycles are longer, and closing ratios are not what they used to be.

The success of acquiring and retaining customers relies on delivering exactly what customers want and in the manner they want it. For modern B2B companies, this means developing highly personalized and specific products and messaging to address individual business needs. The idea of marketing and selling the way customers want to buy is not something that most B2B companies truly get, let alone do well. Most tend to have a standardized method that fits their internal needs, which they try to force on their buyers—who consequently shut them out.

The realities of B2B sales and marketing have changed, and we have outlined two of these changes below.

In coming articles, we discuss other changes and recommendations for better aligning with Buyers to increase the number of quality leads that close faster and at a higher rate.

 

Reality 1: The Millennial as the New Buyer

A 2016 American Marketing Association survey discovered that 73% of all millennial workers are in some way involved in the purchasing decisions of their companies. Furthermore, the number of Millennials in charge of B2B purchasing power increases every year. In 2016, 34% of sole buying power was in the hands of employees under age 35.

With millennial control comes the digitization of the buying process. As consumers, Millennials conduct 80% or more of their transactions online—preferably on mobile devices.  They do not see why they can’t do the same at work. Millennial buyers are also more likely to research and review companies and their products, rather than wait for sellers to approach them. This process allows them to feel more confident in finding  sellers whose services and products fit their specific needs.

In addition, Millennials incorporate social media into their businesses and use them as purchasing resources. The collaborative aspect of social media helps companies form teams that review and analyze potential products before making a purchase decision. Perhaps as long as ten years ago, B2B sales transpired in a linear fashion from sellers to buyers. Today, sales often begin with buyers checking out the reviews and advice of their companies’ network before considering a purchase. Purchasing is now strongly influenced by buyers operating in a web-like system.

 

Reality 2: Strategic Procurement is Not Purchasing

The terms “procurement” and “purchasing” are often wrongly used interchangeably. Procurement is the process of selecting vendors, which involves vetting, establishing purchasing terms, and negotiating contracts on behalf of prospective clients. ItProcurement refers to the broad range of processes that lead up to the purchase of goods and services.

Procurement is a strategic procedure, while purchasing is transactional. When developing strategic procurement, businesses integrate and align the purchasing needs of their various lines of businesses and departments with their overall company-wide objectives. Doing soThis not only controls costs, but also controls the quality and reliability of input products and services needed. Through strategic procurement procedures, B2B companies can continuously improve and re-evaluate their purchasing actions to optimize their resources and generate efficiency.

B2B sellers that fully appreciate this difference and align their marketing and selling strategies with the procurement strategies of their buyers will find more success.

Read about how the globalization of competition and digital transformations of B2C companies are changing the landscape for B2B companies in “The New Realities of B2B Sales (Part 2)”.