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)

capability assessment

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)”.

How to Develop New Business and Break Into New Industry Sectors (Quadrant 4)

develop new business

“How to Develop New Business and Break Into New Industry Sectors” is part of our “Four Quadrants for High Growth Quick Start Guide”.  To access the full series click here

 

Quadrant 4: Develop New Business Outside your Industry

Overall Goal: Find a new customer type for each new product every two years, thereby increasing sales by product by another 10%-20% every two years.

By now, it may be apparent that the first three quadrants are very similar to each other. Quadrants 1 and 2 are closely related  since they consist of your existing customers, and Quadrant 3 addresses the same industry as your existing customers.

Quadrant 4, however, is different. It consists of non-customers from different industry sectors than those you normally market to. It is actually an exercise in new business development.

The right approach to developing Quadrant 4 is to follow Geoffrey Moore’s advice in Crossing the Chasm and first establish a beachhead.  Assemble a team of your best people to target a few selected accounts that will generate key wins for you within the new industry, allowing you to establish credibility early on. Your team members should be highly entrepreneurial and have a very strong “whatever it takes’’ attitude to winning these new customer types in an industry that no one in your company is familiar with.

In Quadrant 4, your objective to sell a product you first developed for a different market segment, with some modification and customization. You have some idea of what that customization might look like, but in truth you won’t really know until you are trying to make your first sale in that segment. This is more like a custom project, which is why you need a team that is highly entrepreneurial— capable of building something from the ground up and finding  solutions for problems that you have never really addressed before.

Below you will find a Best Practices checklist for optimizing high growth within Quadrant 4 for Marketing, Sales, Customer Service, and Innovation.

 

Marketing Checklist

GOAL

Identify other market segments similar enough to your current market segment so you will be able to leverage many of the capabilities you already have.

KEY OPTIMIZATION ACTION ITEMS
  • Set up a Market Strategy team that explores applications of your current products in solving problems outside your current market.
  • Build a disciplined market segment analysis approach to identify the best opportunities.

 

Sales Checklist

GOAL

Find the early adopters and key accounts in the new market segment

KEY OPTIMIZATION ACTION ITEMS
  • Set up a New Business Development unit charged with finding the right entry points within the selected potential growth area.
  • Define the compensation plan for rewarding success.

 

Customer Support Checklist

GOAL

Do everything necessary to create highly satisfied and referenceable customers.

KEY OPTIMIZATION ACTION ITEMS

Set up a “Special Accounts” team whose priority is to do whatever it takes to make these early adopters highly successful with your products.

 

Innovation Checklist

GOAL

Make it easy to custom fit your products to new market needs within 90 days.

KEY OPTIMIZATION ACTION ITEMS
  • Create a platform for your products that enables you to customize and support various versions of your products.
  • Rapidly complete Proof of Concept (POC) projects.
  • Rapidly convert approved POC into stable products.
 

How to Increase Your Customer Base with 4 Handy Checklists (Quadrant 3)

“How to Increase Your Customer Base with 4 Handy Checklists” is part of our “Four Quadrants for High Growth Quick Start Guide”.  To access the full series click here

 

Quadrant 3: Increase Customer Base

Overall Goal: Increase the number of your customers by 15%-20% per year

Quadrant 3 Sales is what most companies think of when they talk about revenue growth—increasing your customer base numbers. In fact, many of the companies we work with invest so much time, effort, and money into Quadrant 3 that they neglect Quadrants 1 and  2.

At the same time, most of these companies do not use the most critical strategy for farming in Quadrant 3: Four Funnel Framework. This is the most important strategy for winning new customers because it ensures tight integration of Sales and Marketing efforts. We will discuss the Four Funnels Framework in more detail in the next section.

Below you will find a Best Practices checklist for optimizing high growth within Quadrant 3 for Marketing, Sales, Customer Service, and Innovation. 

Marketing Checklist

GOAL: Deliver the necessary number of Marketing Qualified Leads.

KEY OPTIMIZATION ACTION ITEMS:

  • Define the marketing content (assets) necessary to drive prospects through the various levels of interest: awareness, understanding, acceptance, preference, and conviction. The marketing assets must deliver the first three stages to generate Marketing Qualified Leads (MQLs)
  • Build the automation that scores the activities of very early prospects and provides them with more marketing assets until they score high enough to be MQLs ready for handoff to the Tele-prospecting team

Sales Checklist

GOAL: Increase the number of customers by 15-20% per year.
KEY OPTIMIZATION ACTION ITEMS:
  • Define the qualification criteria that makes a Sales Qualified Lead (SQL).
  • Develop the qualification and SQL acceptance process and build it into the Sales Operations and Sales Automation system.
  • Automate the handoff and notification process so that Sales immediately follows up on SQLs.
  • Build the right compensation plan that rewards progress through the Sales Cycle so that deals do not get stalled in the middle.
  • Build the right comp plan that rewards hunters for getting even small deals in key accounts that have significant upside potential.

Customer Support Checklist

GOAL: Convert new customers to happy and fully satisfied ones within the first 2-3 weeks.
KEY OPTIMIZATION ACTION ITEMS
  • Design the new customer onboarding process to be as quick and as painless as possible.
  • Develop a scorecard that identifies the components of onboarding a new customer and rates the new customer onboarding team along each component.
  • Map the components of the scorecard into the customer support system and processes so that agents can do their work with a high level of efficiency and accuracy.

Innovation Checklist

GOAL: Make your products easy to learn, use, and support in order to free up scarce resources for new products.
KEY OPTIMIZATION ACTION ITEMS
  • Review your current products and determine how they can be centralized, standardized, componentized, and optimized so that they are easy to sell, support, and use.

How to Sell New Products to Existing Customers (Quadrant 2)

existing customers

“How to Sell New Products to Existing Customers” is part of our “Four Quadrants for High Growth Quick Start Guide”.  To access the full series click here

 

Quadrant 2: Introduce new products

Overall Goal

Increase the number of products that each customer uses by 15-20% each year.

Quadrant 2 is all about selling products and services you offer that your customers have not yet purchased. The most important of these are Upgrades, Add-ons, and Bundles or Packages. Quadrant 2 offers some highly attractive growth opportunities for a company that is set up to take advantage of it.

Below you will find a Best Practices checklist for optimizing high growth within Quadrant 2 for Marketing, Sales, Customer Service, and Innovation.

 

Marketing Checklist

GOAL

Continually market to current customers by demonstrating how the value of their existing products increases significantly when used with another product that you sell, but that they don’t currently use.

KEY OPTIMIZATION ACTION ITEMS
  • Have an accurate database of which customer has which products installed.
  • Build an automated marketing strategy? system? that works on the logic: “If a customer has product A, then use Campaign X. If a customer has products A and B, then use campaign Y”, and so on.

 

Sales Checklist

GOAL

Build an effective account management team that excels at selling new products to existing customers with the goal of increasing revenue per customer.

KEY OPTIMIZATION ACTION ITEMS
  • Set up an account management system that uses the marketing database to call on customers to cross-sell and upgrade them to higher tier products.
  • Build your compensation plan to reward such account penetration.

 

Customer Support Checklist

GOAL

Make customers highly successful at using your new products within 30 days of acquiring them.

KEY OPTIMIZATION ACTION ITEMS
  • Build a library of training material and resources to enable customers to teach themselves to use new products.
  • Build scalable support infrastructure such as chat and self-help portals to provide quality customer support with less impact on the Support organization.

 

Innovation Checklist

GOAL

Introduce new products and services on a regular schedule—at least every 2-3 years.

KEY OPTIMIZATION ACTION ITEMS
  • Set up a Product strategy team that continually reviews the product pipeline and prioritizes new projects.
  • Set up agile development practices to enable rapid and iterative releases of products to enable quick changes based on shifts in customer priorities and preferences.
  • Set up Product Management to translate big initiatives that come from Product Strategy into clearly defined tasks that are implemented through the agile development process.