Operational Excellence (Part 1): Marketing

Person looking on phone and writing on paper marketing statistics

The whole point of B2B marketing is to get your sales people onto the short list of vendors that a prospect is considering.

That can only happen if your marketing is compelling, which will only be the case if you have identified real problems you can solve. The process of identification is a lot easier if you focus on a well-defined group of customers that you fully understand, rather than going after a large number of prospects that you don’t really understand.

Focusing on a well-defined group of prospects is what makes marketing work. Everything else might as well be junk.

Objective(s)

The number one objective of marketing is to get your prospects to actually reach out to your sales team. These are people who are ready to evaluate potential vendors. Their numbers are likely to be small—typically under 10% of your target market.

Next to that is fully engaging the remaining 90% and gradually converting them into Marketing Qualified Leads, or MQLs—people who are interested in finding out more, and may even be willing to meet with a sales rep.

Best Practices

Awareness→ Curiosity→ Interest→ Action

The process always starts with the prospect’s awareness: awareness of the extent of her own problem, that there is a solution to her problem, and that you have a potential solution. You want that awareness to be converted into a curiosity to find out more, and then an interest in learning more, which ultimately leads to some action—such as a willingness to attend a webinar, download a free trial, or talk with a sales rep.

In rare cases, the above journey might only require the first email you send out because the prospect is actively searching for a solution. In other words, she was already aware and interested before she even knew you existed. As soon as she finds a potential candidate, she is ready to meet and evaluate.

Most of your prospects, however, are not aware that they have a problem, much less the type or extent of the problem. If they are aware, they don’t really think the problem is a pressing issue. It is the responsibility of your marketing team to convert a mild and vague concern into an urgent one that must be dealt within sooner than later.

That is accomplished primarily by gaining a nuanced understanding of the prospect’s world through research, developing highly relevant and engaging content around it, and then distributing that content where the prospect is most likely to find it.

Key Metrics

Here is what you are trying to find out: did your prospect come across your message (awareness)? Did she view it (curiosity)? Did she take further action after viewing it (interest turning into some type of action)?

Key indicators are (in the order listed): Emailing or calling you based on your marketing; attending or registering for a webinar; filling out a form; viewing a video; liking/following you on social media; clicking on a link; and opening an email.

Read about the second crucial operation of B2B Sales, “Prospecting”.​​

Decision Point: Build or Buy?

Business man holding blank notecard

As you can see, there is a lot that goes into building and maintaining the operational excellence necessary for generating consistent revenue growth. Not only does a company need to produce high quality and compelling content regularly, but it must also continually distribute this content to its targeted audience, track engagement, make necessary adjustments, and pass those that are ready to the next operations team.

A common mistake that many companies make is to think that they can hire one or two people who will take on the various roles shown in the chart to the right. It doesn’t seem to work out that way, no matter how hard the marketing team tries to learn and master these various disciplines.

 

Position

Salary/yr.  

Marketing Head

$108,000

Researcher

$45,000

Copywriter

$84,000

Graphic Designer

$84,000

Video/animation

$84,000

Social Media

$60,000

Email marketer

$60,000

SEO specialist

$60,000

Prospecting Head

$84,000

BDR

$55,000

Sales Support

$45,000

 

A better alternative is to keep your marketing team lean with just the Head of Marketing, who is responsible for developing your marketing strategy, and a smart, energetic product marketing manager who will work with sales to develop product marketing campaigns.

With your internal team controlling your marketing and sales goals, strategies, and metrics, you can now work with a partner to provide you with both the Marketing Operations and Prospecting Operations deliverables you need.

This approach gives you the following benefits:

Focus. You focus all hiring where it matters the most—on those that are integral to the design and development of your products and services.

Rent-to-own. You let others make the required investments toward achieving the operational excellence that is necessary to deliver the quality and quantity of results that you need to consistently grow your revenues.

It is the classic case of paying for what you use, rather than for the infrastructure needed to deliver what you use.

 

About SOMAmetrics

SOMAmetrics is a sales productivity enhancement consulting company that enables clients to consistently grow their revenues by fixing three critical sales hurdles—insufficient sales pipeline, low conversion rates, and access to new markets.

We provide the best practices, new market research, SEO, digital marketing, sales enablement, performance metrics, and sales and marketing automation services that clients need to consistently achieve their revenue objectives.

Our best practices, systems, and processes have been honed through working with over 100 small and mid-sized B2B companies serving a wide range of industries including: Financial Services, Education, Healthcare, Manufacturing, and Data Centers.  Please contact us today:

Phone

510 206 9264

Email

eskinder@somametrics.com

Website

www.somametrics.com


Operational Excellence (Part 2): Prospecting

Person drawing a sales funnel the displays the words leads, prospects, and customers

If your marketing is working, you will find that a lot of people are opening your emails, clicking on links, downloading papers, and attending your webinars and other events.  All that is great. However, not all of these people are qualified to see your most expensive resources—your sales reps.

What you want to do next is pre-qualify these prospects to make sure that your sales reps are meeting with the right people, at the right time. You want to give your sales team the truly Sales Qualified Leads (SQLS).

 

Objective (s)

The objective of the Teleprospecting process is to pre-qualify MQLs and set appointments for the sales team with qualified prospects who are decision makers and ready to meet with a sales rep.

Best Practices

Call→ Connect→ Key Conversation→ Qualify—Set Appointment

As we mentioned earlier, only a small portion of even your most actively engaged audience will reach out to you asking to be contacted. The vast majority will continue to view your new content and attend many of your events without making a move to buy.

You need actual humans to call them, qualify, and then set appointments with your sales reps for the qualified prospects.

This is far harder said than done:

  • In today’s B2B world, it takes between 25-40 dials to reach someone, and it may take two rounds to reach the right person. Therefore, it is vital that the target list ONLY contains highly targeted prospects rather than a wide audience.
  • Once you reach the right person, you have about 20 seconds to get the attention and curiosity of the prospect before she says, “No thanks” and hangs up on you. During that brief moment, your rep must make a compelling value proposition; keep the prospect engaged, and qualify her adequately.
  • Since your reps have less than a minute or so before the prospects says she has to go, they need to immediately ask your most critical qualifying questions—those that would absolutely qualify the prospect IN or OUT. First, is the pain a pressing issue; next, is this the right person to talk to; after that, are there any disqualifying criteria; and finally, if it’s all a go, schedule the meeting.

Clearly, you want to use highly experienced Business Development Reps (BDRs) for prospecting. They must have at least 5-7 years of experience in B2B prospecting, and preferably have had quota bearing inside or field sales experience as well. Remember that this is your first line team, not a place to try and save a buck or two.

Key Metrics

Besides the actual number of appointments set per month per BDR, you want to track how many of these were added to the sales pipeline (conversion rates); how many were attended or rescheduled; and how many were no-shows. You also want to track these numbers not just in the aggregate, but per BDR and sales rep to see if there are anomalies you need to address.

Read about the third operation in B2B Sales, “Sales”.

Operational Excellence (Part 3): Sales

Business man and women shake hands over a sale

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.

The Four Pillars of High Quality Lead Generation (Pillar 1): Segmentation


Market segmentation, at its core, focuses a company’s sales and marketing efforts. Simply put, it is a decision to pursue a specific market. Once a company identifies a target market segment, the company will channel all of  its marketing and selling efforts into that specific market.

The purpose of market segmentation is to enable a seller to produce an unmatchable offer within that segment, making it the vendor of choice—and to do so profitably.

B2B market segmentation typically consists of three elements: Role, industry, and geography—in that specific order.

Making an unmatchable offer for these outliers becomes increasingly expensive until it becomes a losing proposition.

Role

In a B2B context, products are sold to solve the problem of a specific business manager (also called a business driver). This person may or may not also be the decision maker in their respective company. Role is the single most important criterion for segmentation, as all features and capabilities of a product/service are targeted towards making that Role’s headaches go away.

An example of a Role of a business driver might be “Head of HR,” “Head of Sales,” or “Head of Compliance.”

Industry

While Role is the most important segmentation factor, adding industry to segmentation will make it significantly more targeted, allowing for better optimization of limited resources.

For example, 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 is different. Products for highly regulated industries need more controls built in.

Some industries are also more concentrated than others. Concentrated industries tend to be more uniform in size and type, while more fragmented industries have significant variations in size . The concentrated nature of the former makes it significantly easier to mass-market to the whole of that industry. In  fragmented industries, businesses may need to seek out more niches to market their products and services to.

Location

The geographic location of a company is important because the farther away the customer is from the provider, the higher the cost. The most obvious cost is that of travel, but there are additional costs of  distance. These include differences in time zones, language, and local customs and laws.

Itis often important to meet face to face with customers in order to build rapport. This process is expensive when the customer and sales rep are far apart. Either the provider has to incur traveling expenses, or it has to open and maintain an office near the customer.

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

In the end, the purpose of segmentation is to make it profitable to build an unmatchable offer for a specific segment.

Read about the second pillar of high quality lead generation – “positioning” – here.

The Four Pillars of High Quality Lead Generation (Pillar 2): Positioning

Positioning is the second pillar of High Quality Lead generation because it succinctly clarifies:

  • Exactly what a seller does
  • Why the seller is different from others
  • Why that difference should matter to the buyer

The goal is to communicate an unmatchable offer, and the positioning statement should do so in a way that is both clear and credible. The more specific the target segment is, the easier it will be to make an offer that is both compelling and credible for that segment.

As discussed in a previous section, there are three basic types of buyers, and these different types of buyers respond to three very different kinds of positioning statements.

B2C companies are generally much better at positioning than B2B companies because they understand and take full advantage of the different types of buyers.  B2B companies tend to ignore these differences and use general statements that have something for everyone, but not enough for anyone.

Visionary Buyer

Product Positioning

Visionary Buyers are interested in accomplishing something that has never been accomplished before, and as a result, ONLY interested in a product that will enable them to be among the first to do something.

Therefore, all positioning is focused on demonstrating how this product is far better and faster than any other product out there. Anything less is not compelling.

Pragmatist Buyer

Market Positioning

Pragmatists want to see data and evidence. Therefore, they want to see some market forming around any new product so that there can be sufficient data on the efficacy of that product.  What is important here is to show the growth and credibility of the market and that the seller is a leading force within that market. Anything less is not compelling.

Conservative Buyer

Company Positioning

Conservatives care about relationships, and relationships take a long time to develop. It is the company, not the product or even the market, that conservatives buy from. Conservatives will loyally accept an inferior value from a company they know and trust, rather than a superior value from one they don’t.

As the goal of all marketing is to drive a product to a leadership position within a defensible space, positioning has to first identify the intended buyer group, and then give that buyer group every reason to believe this is an unmatchable offer.

Positioning is a complex subject, and we cannot do it justice in this paper. However, there are many excellent books and articles written on this subject that we encourage B2B executives to study,as they will make a significant difference in the quality of leads their companies can expect to generate.

In order for positioning to be effective, sellers must continually think about what buyers want by developing quality content. Read about the third pillar of high quality lead generation (“content”) here.

The Four Pillars of High Quality Lead Generation (Pillar 3): Content

Positioning is the claim a business makes, but in order for it to work, it has to be believable. Developing quality content is the most effective way to be seen as the authoritative resource on a specific subject in a specific space.

It is worth repeating that buyers don’t want products or services—they want solutions to their problems. Many sellers, on the other hand, make money by selling products and services and continue to think that is what buyers want.

Content is the link between what buyers want and what sellers want. Through content, sellers demonstrate both a deep understanding of the buyer’s challenges and their ability to solve those challenges. That is how sellers provide the confidence that buyers need to engage in a favorable purchase decision.

It is important here to define what we mean by content. For it to have any value to Buyers, the content has to have the following qualities:

  • Relevant – The focus of the content must be on buyers, not sellers. It has everything to do with the buyers’ world, problems, and challenges, as well as the world-view and culture of the buyer. As we have shown above, what is relevant for a visionary buyer is not so for a pragmatist, let alone the conservative buyer. And vice versa.
  • Useful – The content should help buyers solve their problems — at least partially, regardless of whether or not the sellers gets anything out of it. Buyers have many options, so the seller’s first hurdle is to prove to be a more valuable partner than its competitors. The best way to accomplish this is to prove it up front, before the selling even starts. Proof is again different for each type of buyer—for a visionary, it is a demo; for a pragmatist, it is a pilot; for a conservative, it is a reference from an already known entity.
  • Fresh – Buyers can conduct their own research and find what they are looking for. Therefore, simply copying or repeating what others say, though that may sound safe and expeditious, will backfire. For sellers to make their positioning statements believable, they must provide original content that is hard to find elsewhere. Ironically, while conservatives are the least likely to want new information, they are also the most skeptical and will only accept something from an already well-established seller.
  • Depth, not breadth – The mistake many sellers make is trying to “cover all their bases” and generate shallow content for a wide audience. In reality, they need to do the exact opposite. . Buyers want someone who knows everything there is to know about the problem they have. It is the depth of knowledge they care about. This is why segmentation is the first pillar. It would be financially unsustainable to have both breadth and depth. Since buyers want to work with top-tier vendors, sellers must demonstrate depth and must choose where they will show that depth. Depth is especially important to Pragmatists who demand quite a bit of evidence. Conservatives want to know that there is a lot of evidence, but they typically do not “pour” over a lot of content.

As one can imagine, content development is resource intensive. It requires creativity and subject matter expertise, as well as skilled researchers, writers, and designers, to consistently produce high quality content.  One way to measure the quality of a lead is to gauge the lead’s level of engagement and interest. The content that the lead views (in terms of page visits and downloads, for instance) can inform sellers of the lead’s degree of readiness to be further engaged by Sales.

Finally, the use of metrics in comparing results to desired outcomes is the fourth step in generating high quality leads. Read more about measuring results here.

The Build or Buy Decision of Lead Generation: Strategic Outsourcing

None of the fourteen (14) car manufacturers today make the brake systems deployed in their cars. As critical as brake systems are to the safety of cars, car manufacturers outsource this vital component to other companies. There are good reasons why:

  • A brake system is sufficiently different from all other systems in a car so that the technologies employed are not transferable to other systems. Therefore, the R&D expenditure can only be amortized on brake systems.
  • Brake system makers, on the other hand, can spend the R&D to build products that will be purchased by more than one car manufacturer. In other words, they can leverage the R&D on brake technology better than a carmaker can.
  • Even brake systems are complex systems, and some parts are made by very specialized vendors that make nothing but those parts.

This focus on core enables these companies to bring to market superior products at a faster rate and much lower costs than car manufacturers ever could.

If car manufacturers can build strategic partnerships with brake system makers and trust that they will be provided with  high quality, 100% reliable brake systems, B2B companies can build strategic partnerships with High Quality Lead generation providers.

As with car brake systems, Sellers can never amortize the cost of generating High Quality Leads to the extent that companies that specialize in HQLs can. The lack of cost effectiveness will always put a ceiling on either the quality or the quantity of the leads they can produce internally.

A research study provides some insights as to why.

A 2016 Lead Generation study of 600 B2B businesses found that the top two strategies for generating quality and quantity leads is the generation and distribution of email and content marketing. Of those B2B companies surveyed, 59% named white papers and eBook downloads as the biggest producer of leads. Emails followed in second place with 22% crediting them as the best generator of quality leads.

Despite content marketing being named as the top lead generator, it was overwhelmingly identified as the hardest marketing strategy for companies to implement. This discrepancy occurs because businesses often attempt to deploy these resource-intensive marketing strategies in-house.

Effective content marketing requires a deep, intensive dive into the industries of potential leads. In the presence of a saturated market, B2B buyers tend to only pay attention to Sellers who are aware of the challenges that plague their industries. Acquiring such a thorough understanding of the buyers’ industry requires a massive in-house expenditure from companies. These efforts take away time and money from other avenues such as the innovation of new products and services. By outsourcing marketing practices and procedures, B2B sellers are able to produce effective marketing while saving resources toward developing new products to remain competitive. Through outsourced marketing, B2B sellers achieve maximum quality and quantity leads while preserving essential assets to invest and allocate in-house.

Read about the first and second components of the Build or Buy Decision in Lead Generation.

The Build or Buy Decision of Lead Generation: What Physics Teaches us about Resource Demands

In “The Build or Buy Decision of Lead Generation: Core versus Context”, we discussed how businesses should allocate resources to optimize revenue through differentiation. “Core” refers to the innovative processes that businesses undertake to create differentiation that wins customers. “Context” refers to all other company practices businesses implement. Many companies become bloated when trying to acquire new customers, and begin carrying as much context (if not more) as core. Before long, these companies find that no matter how many resources they add, they can’t seem to escape anemic growth. Perhaps this is because so many of these resources are context (weight) rather than the fuel necessary to maintain growth. Physics can teach us something here.

What Physics Teaches us about Resource Demands

The benefits of outsourcing are best illustrated through the process of launching a rocket into space. When contemplating a rocket launch, the allocation of the crucial resource of fuel is the primary consideration. Approximately 94% of a spacecraft’s fuel is used to complete less than 25% of the entire journey. In comparison, only a mere 6% of the rocket’s fuel is needed to finish the remaining 75% of the distance to the destination.

The rocket requires an extreme amount of resource for minimal payout. This is due to the fact that a spacecraft must first overcome inertia in order to reach escape velocity. Only then can the rocket fly smoothly with minimal expenditure for maximum distance payoff.

If the rocket expended a little bit of fuel at a time, it would never achieve escape velocity. It must burn a huge amount of fuel in a very short time to break out of the earth’s gravitational pull. From there, a small amount of fuel will carry it the rest of the way.

Businesses face the same dilemma as the rocket: if they hire a few resources here and there and spread them out over a number of departments, they will never achieve high growth rate. Like the spaceship, companies will experience flat growth rate unless significant effort is expended to move them out of inertia. This requires concentrating resources on core—not context—activities.

Say a company had $1 million to spend on additional hiring in the next fiscal year, and on average this means ten (10) new headcount.

Would the company get the most bang for its buck by adding all ten to one department, such as product development, or by distributing the ten across all departments for equal headcount growth?

Most would agree that concentrating all new headcount on either core product development or service would bring the company more competitive advantage and win more customers.

Read about the third Build or Buy decision, “Strategic Outsourcing”.