Account Based Marketing Archives

Comparing In-house Vs. Outsourced ABM Execution

February 19, 2019February 19, 2019 by Penny Zheng

Doing it In-House

Many managers feel they have better control over projects if they hire employees that will be sitting close to them so they can mentor, and manage their performance.

However it is important to distinguish between something that is critical and something that is strategic. While you should hire, manage, coach, and build in-house expertise for the products and services you sell, it makes no sense to waste payroll expenses and managerial capacity by hiring for operations that are critical, but not strategic.

Hiring for non-strategic operations such as marketing or IT is a distraction for most companies and only builds internal inflexibility at a time when most small businesses should be nimble and ready to change at any time.

ABM requires a variety of skills and is resource intensive. If you were to assemble the right team in-house, you must be prepared to make an expenditure that is similar to that shown below:

Position		Salary ($)	Qty.	Total ($)
Manager	75,000		1	75,000
Researcher	36,000		1	36,000
Copywriter	45,000		1	45,000
Graphic Designer	45,000		1	45,000
Video/animation	45,000		1	45,000
Social Media	45,000		1	45,000
Email	45,000		1	45,000
Paid Advertising	45,000		1	45,000
Total before burden ($)			8	381,000
Total burdened ($)			18%	449,580
Avg. monthly cost ($)				37,465

Outsourcing Content-Driven ABM Execution

Outsourcing digital content and ABM execution confers an unmatchable ROI for clients on many fronts:

Cost ROI

As shown to the left, doing content-driven ABM right requires setting up a team of digital marketing experts and can run companies a minimum of $35,000 per month.

While larger companies have the customer base and product-market portfolio to cost-justify hiring such a team, most small companies find this a luxury they can’t really afford. In the end, they settle for 2-3 people in their marketing department. Such teams are too small to do all of the work necessary to generate the desired number of high quality leads.

The right strategy is to outsource this critical service to an agency like SOMAmetrics that can build and run targeted campaigns for 20% of what it costs you to do in-house.

Ramp Up ROI

Agencies like SOMAmetrics have worked with dozens of companies across a variety of industries and the expertise to learn any new business quickly, in a matter of weeks, since that is all clients typically give vendors.

Employees, however, are typically given 3-6 months because employers are generally reluctant to fire slow-learning employees.

Flexibility ROI

SOMAmetrics’ agreements are month-to-month, which means clients can stop projects anytime with a 15-day written notice. Firing employees for any reason is harder due to labor laws as well as concerns regarding affecting employee morale. Before you hire, find out more about how you can achieve what you need without the additional complications and expenses.

Why ABM Works: Two Client Stories

February 19, 2019February 19, 2019 by Penny Zheng

Client Story One

1. Situation

The client is a 30-year old mid-sized software solutions vendor in the Mortgage Industry. While it was a dominant player with high name recognition in its industry, the client was primarily perceived as a solution provider to smaller banks and brokerage firms that did under 600 loans per year.

At the same time, the industry was becoming highly consolidated as significant new legislations were forcing smaller lenders and brokers out of business or into acquisition by larger lenders.

Though the client attended a number of conferences and sent tens of thousands of emails each month, its sales grew by under 5% each year.

Clearly, the client needed to improve its effectiveness at marketing and selling to larger lenders in order to continue growing in a highly regulated environment.

2. What Was Needed

What the CEO told us he needed was the ability to effectively communicate that his company was “enterprise ready” to meet the needs of larger lenders making 6,000 loans per month or more—a ten-fold increase in the size of companies targeted.

While the company’s current marketing programs worked at selling to smaller institutions, they were too product feature-oriented to address the issues that senior level decision makers at larger institutions grapple with—issues of lowering operating costs and risks; improving asset utilization; and increasing market share.

What was needed was the means to discuss these issues with authority and demonstrate the ability to address them better than any other alternative—as well as to engage all stakeholders simultaneously time using Account Based Marketing.

3. What we did for them

We started by developing a deep understanding the mortgage industry, which involved focusing on what has changed in the past few years and how these changes impact the business of mortgage lending—the costs, compliance risks, changing consumer/borrower behavior, new non-bank competitors, and more.

Our findings were transformed into a compelling white paper that clearly outlined the new risks and opportunities in the industry, and then explained how a digital mortgage platform addresses the high costs and risks of the old, broken paper-based lending business process.

We then showed how a digital mortgage platform delivers five unmatchable ROIs: reducing loan origination costs by 35%; improving line of credit utilization by 300%; reducing operational risk by 80%; reducing loan fallout rates by 50%; and increasing market reach by 90%. These were all issues that senior executives were measured and rewarded on.

From there, we designed highly targeted email and call campaigns targeting COOs, CFOs, CIOs, and Chief Compliance officers of large mortgage lenders.

4. The Results

Within the first 120 days of the campaign, the white paper was downloaded by 269 executives within large mortgage lending institutions, resulting in meetings with lenders that made anywhere from 6,000 to 15,000 loans per year.

The campaign generated a sales funnel of $1.9 million/year in recurring revenue, plus another 50% or more in upsell opportunities after the second year.

Assuming a closing ratio of 25%, the four-month campaign yielded a return of 792% ROI for the first year, with a new business acquisition cost of 12.6%, and an average three year acquisition cost of under 3.1%.

Client Story Two

1. Situation

The Client provided tools for CEOs of mid-market companies to help them consistently achieve their growth priorities such as new product launches, new market entries, hiring top executives and more.

While the Client consistently won business that came from referrals and its own network, it had little success generating business from any outbound campaign.

2. What Was Needed

The Founder told us that they needed a way to target Private Equity funded mid-market companies as the CEOs of such companies were under great pressure to perform and achieve planned targets.

And, while the company was generating thousands of inbound leads through its landing pages, these leads went nowhere. The leads that came in were too low level since they were primarily downloading “how-to” type of content, while the company’s targeted audience was clearly the C-suite: CEOs, COOs, CFO, and Chiefs of Strategy.

At the center of the issue was their messaging. CEOs continually were telling them they already had a project management tool and to talk to their Project Management team. The Client was battling this positioning problem of not being confused with a project management software, rather than articulating what they were.

And while referrals gave them the time to do a demo and thereby show why their solution was different, they had no way of articulating the value of their solution to generate quality leads from their outbound campaigns.

Until the Client found a way to make its outbound campaigns successful at generating the quality and quantity of leads they needed, they were certain that they could not meet their revenue goals of growing 50% each year.

3. What we did for them

We decided the best way to understand the unique value proposition of the product was to hear about it from their customers.

After watching a number of testimonial videos and reading what their customers said about them, it became clear to us that what they provided was an Intelligent Work Platform that enabled CEOs to get all of their employees in every department to work as one team.

From this message, we created a white paper showing the challenges that mid-market CEOs face, the solution, and how our Client’s product automates the ability for a CEO to see where the bottlenecks were in order for them to move quickly to change course so that all the company’s core objectives are achieved.

We then developed videos, case studies, and a nurture email campaign targeting CEOs, CFOs, COOs, and Chief Strategy Officers of PE backed mid-market companies.

4. The Results

Here were some of the key results that we saw within the first 60 days of the project:

Email Metrics	Of about 3,119 emails that were delivered, there were 117 downloads of the white paper. This in itself was significant because nearly half of those that opened the email downloaded the white paper.
Demos and Trials	About 14 demos were booked in the first three weeks of the campaign with C-suite leads that came directly from the campaign.
Sales	The Client closed two deals from the campaign within the first 60 days, both coming from leads generated by the campaign.

Click here to read about the different between in-house versus outsourced ABM.

The Anatomy of High Value-Add Digital Content

February 19, 2019February 19, 2019 by Penny Zheng

At the very heart of Account Based Marketing is content with new, compelling, useful, and highly relevant information that is 100% focused on the Buyer and is also verifiable. In fact, the success of ABM campaigns depends entirely on such High Value-Add Digital Content.

The lack of high-value add content is why Marketing fails to produce high quality leads in the desired numbers and why many Sales teams complain about the leads they receive from Marketing. It is easy to see why HVADC is critical to generating high quality leads.

We are all busy people who have a lot to do each day. To add to our workload, we receive countless emails and calls that have very little to do with us, and much more to do with the Seller’s products. We quickly become weary of useless and irrelevant information, so that our fingers automatically hit the delete button.

High Value Add Digital Content, on the other hand, is clearly intended for the audience that receives it; understands their issues and concerns; provides a logical and easily implemented framework for addressing the problem; makes the process even easier by providing ready-to-use solutions; and provides evidence of how and why it will work.

Furthermore, true High Value Add Digital Content comes in different modes and is distributed via a variety of ways so Buyers can consume it in their preferred format.

New	The content must provide something new to be of value—a new and important detail; a new way of looking at an old problem; or a new approach that reduces complexity or ambiguity so that the problem can be addressed more effectively.
Compelling	The content must tell a story that pulls the viewer in deeper, wanting to find out more.
Useful	The content must provide information that clearly identifies relief from significant pain and appears to be readily implementable
Targeted	The content is highly targeted on the audience as it discusses their challenges and opportunities, as well as how the solution would be implemented within their context.
Verifiable	The content must fortify its claims with research-based evidence, case studies, and other forms of evidence that demonstrate the efficacy of the solution.

Assembling such High Value Add Digital Content requires a good deal of thought, research, and story-telling ability— not to mention skills in writing, visually packaging, and digitally distributing the content over a variety of media. It takes both skill and intensive labor to produce. However, HVADC dramatically improves both the quality and quantity of leads generated, as we can see in the following two client case studies.

Sellers that implement ABM with High Value Add Digital Content can see their sales pipeline grow by as much as 300% to 500% within six months.

Click here to read about how the implementation of ABM helped two clients meet their business goals.

The Four Critical Steps of Content Driven ABM

February 19, 2019February 19, 2019 by Penny Zheng

Execution Steps

While Account Based Marketing originally meant one-to-one marketing (for example, targeting a specific Account such as IBM or Chase Bank), it has been found to be just as effective on highly targeted group of a few hundred accounts. The key to success is truly understanding these accounts and deeply engaging them as shown below.

Step 1: Identify the Target

In Account Based Marketing, there are three elements that have to be selected for targeting: the industry vertical or some well-defined market space; the account types/sizes to be targeted; and the personas of decision makers and influencers that will be targeted.

This is the first and most crucial step. Without this step completed, none of the remaining steps will produce effective results.

Step 2: Define the Value Proposition

With the target identified, the next step is to identify a compelling need that this defined target faces, and then to explain how you will solve this need or problem for that group better than any other alternative they have.

The value proposition that emerges from this step has to be very clear, compelling, and believable. Your customers must be able to quickly understand how your product or service will immediately impact their business. The only thought remaining should be that they want to understand better how you will deliver on your claim.

Step 3: Back your Claim with Overwhelming Evidence

This is a crucial step in ABM, which can make or break it. Your prospects want to know if you know what you are talking about more than your competitors do, and the best way to demonstrate this quickly is through an assortment of High Value Add Digital Content: white papers, e-books, workbooks, videos, infographics, webinars, and more.

Step 4: Engage Your Audience with Targeted Campaigns

Up to this point, you have identified the right companies and people to work with; defined your compelling message for them; and assembled the evidence you need to support your claim.

It is now time to connect with this audience through your message. You must have a comprehensive but highly targeted set of inbound and outbound campaigns to reach them through: emails, calls, social media postings, highly targeted advertising campaigns, field events, and search engine optimization of key landing pages.

These four steps demonstrate how you can generate enough high quality leads that convert faster and at higher rate for your Sales team to consistently achieve their sales targets.

Click here to read about the benefits of high value-add digital content.

The Past and Future of B2B Selling

February 19, 2019February 19, 2019 by Penny Zheng

The End of B2B Sales As We Know It

B2B Selling has changed—forever.

In times past, Business to Business (B2B) Sellers relied almost entirely on their sales teams to generate revenue. Marketing was primarily for branding, as few Sellers understood how Marketing could be used in other ways to grow their businesses.

The bigger the sales organization, the faster the company grew—or so everyone thought. Cost of sales were expected to fall within the range of 20% to 40%; no one really seemed to know how much it should be.

Sales reps were taught how to present their products, how to “get in the door,”, get past the gatekeepers, handle objections, and always be trying to close. That was all they were taught or expected to know.

There were always one or two great sales reps that made the effort to study their customers’ businesses, competitors, and changing demographics and regulations, making it their business to be experts on their market space. Their customers valued them and regularly gave them business because they trusted their judgement. And although these sales reps brought in the lion’s share of sales each year, they didn’t seem to know much about the features of the products they sold. Still, B2B sales continued to revolve around aggressively getting in the door, taking charge of the sale situation, and focusing on features.

Buyers hated this process and thought it was a colossal waste of their time, but their options for getting information they needed were limited. They would entertain a parade of sales reps in hopes of finding the one who truly understood their needs and could help them. At the same time, Buyers learned to screen and keep out the time suckers.

Then the Internet—and Google—happened. That changed everything. Buyers no longer had to see sales reps to find information—they just googled it. And while Sellers struggled to adjust, The Great Recession occurred and changed the future of B2B Selling.

Companies enacted stringent procedures to control purchasing, which put the Head of Purchasing in a strategic role.

There was no longer a single “decision maker.” One person would sign the contract in the end, but only after significant input and buy-in from many stakeholders—as many as 17, according to research by IDG. In addition, 77% of Buyers now conduct more detailed ROI analysis prior to a decision.

Today’s Buyers fully control their own buying journey:

Senior management identifies some key initiatives and assigns one or more execs to head that. That exec then assembles a team, breaks down the initiative, and assigns portions to individuals or team members who are to conduct research and report back.
In almost all cases, those tasked with researching and reporting back are younger—typically under 40—and immediately go online to conduct their research.
These young people don’t care about the older, established brands—they just google and begin reading and organizing their findings.
Then they report back. Their boss works with them to assemble a short list of potential solutions and asks one or more to reach out to the vendors and arrange a meeting.
Part of the seller requirements is analysis on ROI and payback period. Sellers that provide that information have a strong chance of being invited, while those that don’t likely won’t make the cut.

What this means for you is that if you don’t have sufficient, mobile friendly digital content that helps these digital natives answer their research questions—including ROI—you practically don’t exist for them. Your brand will no longer guarantee success.

And if you are not found by these digital natives, then you are not on the short list that your target “decision maker” sees.

It doesn’t just end there. If the “decision maker” reaches out and asks, “Hey, do you know these guys?”, the answer has to be, “Yeah, I read something interesting about them…” to get further up the list.

That is how Buyers now want to buy. The question is, what is your strategy for aligning how you sell to how your customers want to buy?

The Future of B2B Sales: Content Driven Account Based Marketing

As we have seen above, Buyers today manage their own buying journey and want to engage Sellers by invitation only. To get invited, Sellers must demonstrate knowledge and understanding of the Buyer’s situation. The best way for Sellers to demonstrate this is through comprehensive digital content that the Buyer can easily find and review.

The right sales process today is one that fully aligns with how Buyers want to buy by facilitating their journey, rather than attempting to control the process.

The Account Based Marketing strategy considers this a top of funnel, middle of funnel, and bottom of funnel content strategy that naturally invites the Buyer deeper and deeper into your content world.

Different types of content address different needs and appeal to different types of stakeholders. Remember that today’s Buying team can consist of as many as a dozen or more stakeholders, each with a unique set of concerns, needs, and issues that must be addressed.

White papers provide a holistic understanding of the changes occurring in the industry, what they mean, and how to mitigate the risks of these changes while taking advantage of the opportunities. Videos provide a different but related narrative.

Even with white papers, you want to distinguish between a C-level and a Stakeholder paper. The C-suite white paper must be a business paper that shows how your product can cut costs by automating an otherwise labor intensive business process, or how it can increase revenues by helping operations managers identify assets that are not fully utilized.

Your technical white paper informs technical stakeholders such as CIO, CTOs, or Directors of DevOps on how your product integrates with existing systems, is highly secure, and provides software to facilitate installation and integration—things that these folks care most about.

The key is to cover your intended audiences’ concerns and needs in a variety of formats so that they all come to the conclusion you want—contacting one of your sales reps for a meeting.

Campaign	Assets used	Goal
Top of Funnel	Website; LinkedIn; White papers; videos; blogs;	Provide useful information to the reader to intrigue, interest, and begin the engagement as a trusted source of useful information
Middle of Funnel	Targeted articles; webinars; product videos; ROI analysis	Provide deeper information to win the position of a trusted thought leader
Bottom of Funnel	Case studies; pilot studies	Increase the prospects trust and commitment level by providing additional evidence of effectiveness of solution.

Click here to read about the four critical steps of content driven ABM.

The High ROI of Capability Assessments

November 15, 2018November 15, 2018 by Eskinder Assefa

Though capability assessments are important tools for driving corporate success, businesses are often unable to recognize the importance of examining and fine-tuning their capabilities. The Boston Consulting Group explains the term “capability” in the context of business as “an ingrained ability to do something well in a way that improves business performance.”

At the core of a capability are behaviors— “the activities, interactions, and decisions made by a set of individuals in a company who exemplify that capability.” In addition, a capability is built on four underlying components that strengthen each other and pave the way for long-term behavioral change in a company:

Competencies: the skills, knowledge, and beliefs of employees.
Tools: IT, databases, apps, and related systems.
Processes: activities, resources, and responsibilities that regulate the division and execution of work.
Governance: accountability, KPIs, incentives, and reporting structures.

Many companies launch transformations that involve changes to company strategy, business model, culture, organization, and more in order to stay competitive. These transformations often serve as much-needed responses to the changing demands of a dynamic industry. In other instances, transformations prepare companies to enter new market segments in search of growth. Whatever the motivation, transformations are essential undertakings that can yield growth, profitability, customer loyalty, improved manageability, and predictability for businesses— among other benefits.

However, transformations fail to deliver lasting results when companies focus too much on the end goal and not enough on the capabilities needed to reach and maintain the end goal. Lasting transformations depend on capabilities, which must be initially evaluated using a capability assessment and then systematically integrated into the transformative process. According to a Boston Consulting Group study, behavioral capabilities such as strong leadership, engaged employees, and collaboration are closely tied with a company’s ability to create value. Building capabilities is an indispensable element of transformation, though it poses some serious challenges.

Capability building requires coordination across different departments and functions, but most companies find it difficult to unify their groups and end up performing a cursory attempt at what should be a thorough process. Business executives hand the job to HR or set aside a few days for training, neither of which yield potent or sustainable results. New capabilities also call for behavioral changes, which are not easy to sustain. Without a comprehensive and systematic approach, businesses tend to revert to their old behaviors once the transformation stage is over. For reasons such as these, attempts to bolster capabilities fall short in the long-term.

In a 2014 McKinsey global survey of business executives, 50 percent of respondents ranked capability building as one of their top 3 priorities. However, survey results showed that few respondents had effective approaches to assessing their current capabilities and identifying skill gaps. Only 18 percent of respondent organizations used structured and objective third-party diagnostics, as most respondents preferred manager assessments or self-assessments. Unsurprisingly, 37 percent of respondents cited a lack of credible metrics as one of their companies’ biggest challenges in building capabilities. 1 in 5 respondents reported that their organizations did not measure the efficacy of their learning programs at all.

In order to successfully build and sustain capabilities that generate value for the company, businesses must diagnose their skill gaps through objective and systematic capability assessments. Objective third-party assessments help companies assess their skill gaps relative to industry peers and quantify the potential financial impact of addressing these gaps. Once this step is done, companies will have a deep understanding of their capabilities that allows them to more effectively design learning programs and enact sustainable transformation.

Before hiring more resources in order to meet your growth targets, conduct a capability assessment to find where gaps are that might hinder performance. Without removing these performance obstacles, your investments in new payroll or systems will not likely payoff to the extent you expect.

SOMAmetrics provides a complete sales and marketing assessment that takes 3 to 5 days to perform. A thorough investigation of the company’s internal capabilities and adherence to stated Senior Management goals is conducted through interviews and a review of systems, processes, and publications.

Schedule a quick call to see how we can help.

Insights into Missed Sales Quotas

January 11, 2019November 8, 2018 by Tatiana Su

Missed sales quotas are becoming the new norm

Misses sales quotas are becoming the norm rather than the exception. An extensive digital transformation of the commercial world has left many B2B sellers floundering in the dust. Accustomed to the personalization, immediate fulfillment, and transparency of consumer experiences fueled by artificial intelligence, buyers have changed their expectations of sellers. Unfortunately, B2B sellers are too often unable to meet these new demands. According to CSO Insights’ 2018 Buyer Preferences Study, about half of sales representatives were meeting or exceeding their quotas in 2017— the 5th straight year of decline in quota attainment.

The main challenge for today’s sellers is that “buyers are changing substantially faster and to a greater degree than sales organizations.” Sellers are slow to change alongside the rapidly developing array of consumer options available to business buyers, who transfer their consumer experiences into buying expectations. Buyers no longer view salespeople as a valuable resource, since so much information is available online and through Artificial Intelligence technologies. A CSO Insights survey of business buyers revealed that only 23 percent of buyers view vendor salespeople as a top three resource to solve business problems. In general, vendor salespeople placed ninth out of ten buyer preferred resources.

Sales Reps are no longer the preferred source of Information for Buyers

Because sellers are no longer as valuable to buyers, buyers are not inclined to engage sellers early in the buying process. CSO Insights found that about 70 percent of buyers preferred to engage a seller only after they had already developed a clear understanding of their needs, while almost half of buyers preferred to wait until they had also identified a solution to their needs.

Unfortunately, the longer a buyer waits to engage a seller, the less value a seller can offer to the buyer. If key buying decisions have already been made, sellers have less time and creative space to demonstrate their value. Instead of helping the buyer identify and prioritize needs, sellers are relegated to explaining their products while asking questions to understand what the buyer has already learned.

As a result, sellers start to look alike to the buyer. In fact, almost 60 percent of buyers in CSO Insights’ study saw little difference among sellers. Buyers see sellers as representatives of products rather than solvers of business problems, which drives their tendency to engage sellers later in the buying process once they have already identified a solution, which in turn constrains the seller’s ability to demonstrate value and ultimately feeds back into the perception that sellers are merely representing products. If sellers continue to be perceived as lacking value, they can be excluded from the buying process altogether.

However, 90 percent of buyers are open to engaging with salespeople earlier in the process— which would allow sellers to break out of this dangerous cycle. According to the CSO Insights study, there was more interest in early engagement when the business challenge was new for the buyer, perceived as risky for the business, perceived as risky for the buyer, or complex— in that specific order. Those who feel that salespeople exceed their expectations are more likely to involve sellers in the initial stage of buying. So, how do sellers demonstrate that they are valuable, expectation-exceeding resources?

What Sales People should do to become Relevant to Buyers Again

Today’s buyers want four things from sellers:

1. Understanding of the Buyer’s Business

Because retail websites collect data about customer digital activity in order to provide tailored recommendations and customized search results, consumers are used to the idea that sellers already know their needs and preferences. Buyers want sellers who have already conducted extensive research on their businesses and industries. What they don’t want is having to waste time explaining their challenges and circumstances to the seller.

2. Excellent Communication Skills

For today’s buyers, every interaction needs to be compelling, concise, and worth their time. Each interaction can either build or degrade the seller’s relationship with the buyer.

3. Focus on Post-sale

Buyers feel that sellers focus too much on the buying phase and fail to demonstrate enough commitment to the post-sale phase. Sellers need to show continued interest in the company’s success after the sale, as long-term relationships require long-term investment.

4. Insights and Expertise

Providing perspective is the seller’s biggest opportunity to exceed buyer expectations and differentiate themselves from other sellers. However, this capability can only be mastered if the seller has already acquired the first three— deep understanding, communication skills, and long-term focus. Buyers want to learn new methods for progressing toward their future goals, along with insights that shape their vision and expand their expertise.

Integrating these four components into the selling process will require commitment to holistic change. In order to close the gap between buyers and sellers, sellers need to employ a systemic solution in transforming the way they sell. SOMAmetrics is here to facilitate this process so that sellers can consistently win new business in a changing commercial environment.

SOMAmetrics designs and executes its proven 4-step Digital Account Based Marketing programs to deliver more leads that close faster and at higher rate for 20% of what it costs clients to do it themselves in-house.

We have worked with nearly a hundred companies, from startups to Fortune 500 companies, spanning a number of industries including Healthcare, Financial Services, Education, Local and State Government, Data Center Services, Manufacturing, and more.

Our experience enables us to learn our clients selling environment quickly and deliver world class digital marketing and lead generation services faster and cheaper than what it costs our clients to do in house.

We obtain superior results because we are deeply committed to the Principle of SOMA, “Sales Optimization and Marketing Accountability”. The key to optimizing Sales is to make Marketing accountable for consistently delivering high quality leads that close faster and at higher rate so that Sales can consistently hit revenue targets.

Schedule a call today.

The Future of B2B Sales Has Changed. Here’s the Data that Proves It.

May 8, 2019March 27, 2018 by Eskinder Assefa

When it comes to B2B sales, 73% of all B2B companies say that winning new customers is their top priority.

Yet, 50% of B2B Sales Leaders don’t believe they can meet their targets.

Here is the research data that explains why.

Business-to-Business (B2B) buying has always worked the same way. When a new initiative or need arises, staffers are directed to conduct research and report back with a short list of recommended solutions and providers.

In the past, the short list predictably consisted of well recognized sellers. It paid to attend conferences, shake hands, and pass out plenty of business cards.

However, the old selling model is not working as well today. In fact, B2B sellers report a 57% increase in cost of sales since 2011.

The way B2B buyers make purchasing decisions has dramatically changed in the last five years (download the list of additional findings here):

90% of all product and vendor searches happen online (with 50% of them on mobile devices while at work)—without ever speaking with a sales representative.
71% of B2B researchers start a generic search for a solution to their problem with little regard for brands.
As a result, 57% of the buying journey is completed by the time B2B buyers begin contacting sales reps.
It’s no wonder that 90% of B2B buyers reportedly NEVER respond to cold calls. They believe it’s just a waste of their time.

The seller that ends up on the short list today has compelling information that buyers need on an online, preferably mobile platform and knows how to drive its prospects to that information with highly targeted marketing and business development campaigns.

This is the only proven way to continue to win new customers in a highly competitive digital era. Here is a case study that demonstrates this model.

We are here to bolster your sales and facilitate growth. Please contact us to set up a quick call to find out how we can help you consistently win new business.

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How to Enter New Markets

November 2, 2018November 30, 2017 by Eskinder Assefa

Why Companies need to Enter new markets

Companies enter new markets in hopes of increasing revenues. Most often, this happens when they find it difficult to meet revenue targets in their current market(s).

However, experience tells us that successfully entering new markets is a far more difficult task to achieve than it may seem.

Companies tend to severely underestimate the time and cost required to generate adequate sales in new markets. In fact, many have bailed out of new markets after sinking significant money without seeing the returns they expected.

Does this mean that entering new markets is a bad idea? No.

It simply means that companies should know what they are getting into before spending money. They should have a much firmer grasp on the level of investment in money, time, and effort required. In addition, they should have more realistic expectations of how much revenue they can expect and by when.

Below is an outline of what we believe is the minimal preparatory work necessary for successfully entering new markets.

Definition: Let’s start by defining a new market as one in which you have little or no presence today.

The Basic Elements

We can think of 9 basic elements to consider before entering a new market.

1. Compelling Need

Identify a compelling need that your product can solve in that market. This is the most crucial and most difficult step for many companies, which could explain why their new market entry efforts don’t produce the desired results.

Definition: A compelling need is a problem that customers cannot live with any longer than they absolutely have to.

If you have identified a compelling need, customers with such a need will jump at the chance to try out and purchase your solution. If the need is not compelling enough, they may still try it but will think too long and hard about spending the money, if at all.

Lack of compelling need makes market entries a very prolonged and expensive exercise in futility. If you cannot identify a compelling need, it is better to wait until you find one before entering a new market.

2. Target Segment

Very few products solve compelling needs across a wide range of customers. Such “Killer Apps” are few and far between.

In the vast majority of cases, we can at best define a compelling need for a specific group of customers who have the same or highly similar operational context and pain.

According to Geoffrey Moore, the noted high tech marketing guru, a market segment consists of a specific business role (someone charged with achieving specific business results) in a specific industry and probably in a specific geographical setting.

For example, “Chief Medical Officers in hospitals with 200-500 beds in California” is a well-defined market segment. “Healthcare CXO’s” is not.

The more precise the segmentation, the easier the rest of the market entry work will be.

The best market segment to select is one that is adjacent to the segment you are currently serving, and for which you have identified a compelling need that you can address.

3. Access to Decision Makers

The next challenge is determining how to access the above target group. Are they members of any organization? Do they regularly attend certain conferences? Do they subscribe to certain trade journals? Do they open emails or take calls from unknown sources? Are they active on any social media network?

In short, what are the best ways to reach them, and how cost effective are those?

While the cost of your marketing and sales is expected to be quite high initially , you want to ensure its reduction to acceptable levels (no more than 30% of sales) once you achieve a certain degree of name recognition and presence in that market—which should happen after 12-18 months of consistent marketing and sales efforts.

4. Competition

All sales are replacement sales, since you are trying to replace an established product with something new— your product.

No matter how compelling a need you may have identified, you must assume that your target customers are currently solving their problem in some way, to some extent.

Competition always exists. That is a given.

What we must clearly know before moving forward are:

How currently underserved/poorly served this new market is.
If there are any entrenched competitors that are complacent today but will wake up and fight back if challenged
How capable and willing they are to fight back to keep their customers

The more you know about whose business you are trying to replace with yours, the more successful your strategy shall be.

5. Complete Product

One common fallacy is to assume that the same product will work across different segments.

For example, an accounting package that was originally created for manufacturing companies will not, out of the box, work adequately for hotels. Yet, product makers routinely think that they can simply make some cosmetic changes (such as a new name) and expect the same sales results in a different market. A mechanic may think a car is a car, but a Mercedes owner never thinks her car is the same thing as a Kia.

If you don’t know the customer’s context—what drives their business, what their top challenges are, where and how they make money, how they are regulated, who they compete against, and so on— then you don’t know enough to make a product that addresses their needs.

A product must completely address the compelling need for which it is made. It must work turnkey.

If you expect your customers to buy your product as is and then figure out how to make your product fit their existing systems/processes and business model, you may do a lot of demos but will close very little business.

The only reasonable way to build a turnkey product is to limit the scope of what that product is expected to do— go narrow but deep. This can only be accomplished through the pursuit of a very specific market segment rather than a broad one.

6. Pricing

Products must be priced to sell, which means that neither the amount nor the pricing model should create a sales hurdle.

The amount itself must work—it must be easy to show financial metrics such as a reasonable Return on Investment (ROI) and Payback Period. If the price is too high, these numbers will be too weak and you will find it hard to close deals.

It is also critical that the pricing model (how customers pay) works as well. Many companies continue to use the same pricing model when they enter new markets without first researching how the target customer expects to pay for a similar product or service.

For instance, if customers are used to paying at the end of the month, they will be outraged if you expect them to pay up front for 12 months. If the payer in the new market is typically someone other than the end user in a similar context, end users will be upset if you expect them to pay for the product.

Remember the early days of cable? Cable network providers were tasked with convincing TV viewers to pay for what they were already getting for free, since advertisers were paying the TV stations.

Cable companies had to provide considerably more channels with fewer/no commercial interruptions, as well as a much better quality of reception, to convince viewers to pay $10 a month. Today, many TV viewers routinely fork out $200 or more per month for cable subscriptions.

7. Communication

Communication consists of more than just the message. It is also the mode of delivery (online, mobile, print, broadcast, face-to-face, etc.), the timing (when, how frequently), the freshness, relevance, and usefulness of the message that makes it work.

Companies often replicate their communication from their current market to be used for the new market with little or no change. This will not work. Even worse, it actually turns off the new market since the vendor clearly doesn’t know anything about them.

However, the message is only one component of communication that needs to be customized. The whole communication strategy must be redefined around the new target market.

In some cases, customs dictate what is acceptable and what is not. It is not a good idea to send a message that sends the wrong message (no pun intended). Crossed fingers may mean, “hoping for good luck” in the US, but it could mean something totally different in another culture. Do your market research.

It is not just customs that we need to worry about—we could inadvertently violate laws. For example, some countries allow calls only between certain hours of the day, while others have no restrictions. Still others have very specific laws as to how emails are sent, and so on.

Whether violating customs or laws, both can get companies into real trouble.

8. Sales

Selling can also be different among different markets. Some markets conduct business only after they have met face-to-face, wined and dined, and shaken hands. Others are comfortable closing large amounts of business over emails and phone calls. Customs and traditions are a big deal when it comes to sales.

Salespeople need to have “situational fluency” in the new market. They need to speak the language, know the right words and terms to use, and adequately understand their customers’ business and how they make money (which means understanding their customers’ customers) in order to truly engage their prospects.

Furthermore, size matters. Even in the same vertical space, the size of the customer can make a huge difference. For example, very large banks may behave differently from small community banks. If you are currently selling to very large banks, you may find it difficult to conduct sales with community banks, and vice versa.

This may require that you hire different sales reps who have the right background in the new market you wish to enter. It could also mean that you need to manage and compensate them differently.

9. Positioning

We think of positioning as a shortcut to sales, as it refers to how you make it easy for customers to buy your products by creating a brand they recognize and trust. That is a deceptively loaded statement.

By definition, you have no position in the new market since few customers, if any, know you exist. Only visionaries buy from someone they don’t know who promises to give them something they want badly. The problem in selling to visionaries is that they have their own ideas of what they want from you and are constantly requesting custom jobs. If that is what you want, fine. Otherwise, if you want to sell products, you must focus on the mainstream market.

That is where positioning is really critical.

Remember, all sales are replacements of something already in place.

Pragmatic buyers need to see documented evidence that your product will do what you claim it will do for their business before they rip out what they have and replace with yours. They want to see case studies, benchmark studies and the like. Even more so, they want to see what other companies that they regard highly are using your product. That’s the catch-22.
Conservative buyers are even worse. They want to know that you have been in business for a long time (think a decade or more), have a large installed base, and that you have some highly recognizable names as customers— before they even think of buying from you. Then they want deep discounts.

Winning Strategic Accounts early in the new market is the key to winning in the new market segment.

Critical Success Factors

As we see it, there are three critical success factors (CSFs) to success in a new market segment:

Select a segment that is as adjacent to your current market as possible so you can leverage name recognition and validation.
Win at least 3-5 Strategic Accounts as early as possible. These are the linchpins in that new market. As they go, so will the rest of the market.
Invest adequately in product development, support, marketing and sales for two years minimum. New market entries typically fail because they are starved of the resources they need— or worse, senior management pulls the plug on the whole project too early because of unrealistic expectations that will likely not be met.

Conclusion

In conclusion, while new market entries are a viable way to grow a company, they should only be undertaken after significant internal discussion has resulted in a strong consensus and commitment on the nine elements discussed above, and after adequate preparations on each element have been made.

Companies are especially advised to seriously consider the three CSFs and to refrain from entering new markets until they are fully committed to ensuring that the CSFs will be met.

SOMAmetrics provides the consulting and implementation services necessary to assist clients in successfully entering and developing new markets.

Please contact us for an initial discussion.

B2B Market Segmentation for High Growth

May 8, 2019March 18, 2017 by Eskinder Assefa

What is Market Segmentation

Market segmentation, along with positioning, is one of the two strategic components necessary for effective sales and marketing.

Without market segmentation, there is no marketing strategy. The pursuit of any objective without strategy will likely turn into failure. Even when success looks prevalent, it very likely came about at too high of a cost to achieve truly promising results.

That is, after all, the purpose of strategy – to discover the optimal way with which to consistently achieve an objective.

Therefore, consistently and predictably achieving revenue goals requires a well-thought out strategy; and market segmentation is a crucial foundation element of any revenue strategy.

In this article, we will further explore why market segmentation is critical and suggest a practical approach to properly segmenting a B2B market.

Why Market Segmentation Is Critical

Market segmentation, at its core, focuses a company’s sales and marketing efforts. Simply put, it is a statement of decision to pursue a singular important objective and forego other less fundamental pursuits.

Once a company identifies “XYZ” as its optimal market segment, that company commits to marketing and selling to that specific market, and only that market.

That being said, if a customer from a market other than XYZ comes to the company and indicates that they want to buy its products and services, the company will, of course, sell them what they desire.

There exists a very big cost difference between processing an inbound lead and generating a lead through an active outbound marketing and sales campaign. A company should always process an inbound lead, provided that the prospect is willing to bear the full cost. We are saying that a company should carefully select which market it wants to sell, and then commit to optimizing everything in its power towards that chosen market.

The purpose of market segmentation, therefore, is to enable the optimization of all resources around a chosen customer profile so that it can maximize value for the customer and profits for the company, simultaneously.

Why Companies Don’t Segment their Market

Clearly, experienced executives understand this segmentation concept, so why do they hesitate to pick a specific market segment and commit to it?

The hesitation seems to come from the fear that perhaps they would lose business and profits from other areas of the market if they didn’t elect to go after those as well.

However, what ends up occurring is the opposite:

Either a company must sell a watered-down version of their product to a broad market, losing out to focused competitors who maximize value for the customer, or
A company has to spend a massive sum of money optimizing its products for a broad category of customers, thereby losing out on maximizing profits.

Either option is a losing proposition – hence the need for strong market segmentation.

Sometimes, executives simply cannot choose among a number of segments that all appear equally attractive. In such a case, it doesn’t really matter much which market segment the company chooses to focus on. What matters is that the executive selects one, and only one, segment and commits to it maniacally.

Segmentation Technique

Assuming we have made the case for market segmentation and why it is critical for high growth, we will now turn our attention to the question of how to segment. There are many books on this subject, and segmentation is one of the oldest topics in marketing, especially in consumer marketing.

However, for B2B market space, the techniques are somewhat different. Below, we offer a simplified version.

The steps are to first segment the market and then segment that space by account. We discuss this in some detail below.

Step 1: B2B Market Segmentation

B2B market segmentation typically consists of three elements: Role, industry, and geography—in that specific order. The chart shows that as a company starts looking at potential customers that are further away from its “sweet spot”, they will look less and less similar, making it significantly more expensive to maximize value for these outlying potential customers.

1. Role

In B2B, products are sold to solve the problem of a specific business manager (typically called a business driver). This person may or may not also be the decision maker in their respective company.

An example of a Role of a business driver might be “Head of HR,” “Head of Sales,” or “Head of Compliance”. Note that in some companies, this could be a C-level role, in others a VP role, and still others, a director level role. Therefore, it makes more sense to simply refer to it as a “Head of something” for segmentation purposes. Once an actual list is purchased, specific titles may be requested.

Role is the single most important criterion for segmentation, as all features and capabilities of a product/service are targeted towards making that the Role’s headaches go away and their burdens lifted.

2. Industry

While Role might be sufficient, adding industry to segmentation will make it significantly more focused, enabling both the maximization of value for the customer and increasing profits for the company. The reason is that while the heads of HR of the Hospitality industry have many things in common with the heads of HR of the Financial industry, the degree to which the two are regulated are different, thereby requiring more controls in products for more regulated industries.

For example, if we have products that target heads of Compliance, the degree to which an industry is regulated becomes a significant issue in determining how complete a product is for that market.

Some industries are also more concentrated than others. For example, the Pharmaceutical and Oil industries are typically more concentrated than the Financial Services industries.

Concentrated industries tend to be more uniform in size and type, while more fragmented industries have significant variations in size from the smallest to the largest. Therefore, in fragmented industries, there are more niches than in more concentrated ones.

3. Geographic Location

The geographic location of a company is important because the further out the customer is from the provider, the higher the cost. The most obvious cost is that of travel. But there are additional costs that come as a result of distance including differences in time zones, idioms and languages, local customers and laws, and more.

If it is important to meet face to face in order to build rapport, then selling becomes expensive when the customer is further out than the provider. Either the provider has to spend traveling expenses, or has to open and maintain an office local to the customer.

The issue of geography is typically not a problem in concentrated industries since they also tend to be geographically concentrated. However, in fragmented industries, a provider will either have to pick a geopgraphic location, or find an optimal way to sell products and services on a national or international scale.

Closing Words

The first step in market segmentation is to decide whom to sell to, which is a factor of the targeted role (function), what specific industry, and where is the geographic location of potential customers.

In the end, we want to arrive at a statement for our company such as “Hospitality Industry Heads of HR in the DC Metro Area” – this focuses product development, support, marketing, and sales.

Part 2: B2B Account Segmentation

Once we have chosen the specific market segment we want to go after, the next step is to segment all accounts in that market to focus our resources such that our most expensive resources are allocated to the most profitable accounts.

A simple and practical approach is to segment accounts into three categories: Tier 1, Tier 2, and Tier 3. The chart below shows how we would allocate resources to each tier.

Tier	Description	Resources
Tier 1	These are the crème de la crème accounts and they typically represent between 5 to 10% of all accounts, but probably would represent 50% or more of all sales potential in that segment. Winning these accounts enable the provider to say, “Our clients include Hyatt, Sheraton, and Holiday Inn”, names that most of your prospects would immediately recognize.	Sales Executive Led Your top sales reps aided by highly experienced Business Development Reps (BDRs) to help them get in.
Tier 2	These are less well known, perhaps local or regional players that nevertheless are significant sized customers. They consist of 20-25% of your target segment in number, but probably make up 35 to 40% of the sales potential in that market segment. Winning them brings both sales and profits, but not necessarily name-dropping benefits.	BDR Led Prospect with experienced Business Development Reps (BDRs) and assign to your sales reps.
Tier 3	These are the rest of the market. They typically represent 65 to 75% of the market in number but probably would not exceed more than 10-15% of the sales potential in the market.	Marketing Led Use Marketing to prospect and process only inbound leads.

Doing it In-House

Outsourcing Content-Driven ABM Execution

Cost ROI

Ramp Up ROI

Flexibility ROI

Client Story One

1. Situation

2. What Was Needed

3. What we did for them

4. The Results

Client Story Two

1. Situation

2. What Was Needed

3. What we did for them

4. The Results

Execution Steps

Step 1: Identify the Target

Step 2: Define the Value Proposition

Step 3: Back your Claim with Overwhelming Evidence

Step 4: Engage Your Audience with Targeted Campaigns

The End of B2B Sales As We Know It

The Future of B2B Sales: Content Driven Account Based Marketing

Missed sales quotas are becoming the new norm

Sales Reps are no longer the preferred source of Information for Buyers

What Sales People should do to become Relevant to Buyers Again

Why Companies need to Enter new markets

The Basic Elements

1. Compelling Need

2. Target Segment

4. Competition

5. Complete Product

6. Pricing

7. Communication

8. Sales

9. Positioning

Critical Success Factors

Conclusion

What is Market Segmentation

Why Market Segmentation Is Critical

Why Companies Don’t Segment their Market

Segmentation Technique

Step 1: B2B Market Segmentation

1. Role

2. Industry

3. Geographic Location

Closing Words

Part 2: B2B Account Segmentation

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