The lack of communication and Sales-Marketing alignment sounds like kicking in an open door. Yet, once more, I tumbled on the same problem when investigating lead generation issues with a customer.
2 immediate problems jumped out:
- Different metrics: Marketing had a lead gen KPI and Sales a conversion KPI. Both in itself good metrics’s but meaningless if measured in a separate way.
- Sales and Marketing were using a different definition for ‘a lead’
Here are some tips to improve the lead conversion rates:
- Write a common definition (universal lead definition) for ‘a lead’ and make sure it’s known by all concerned.
- define a process describing ‘who does what’ and ‘what needs to be reported’ to one another.
- Make sure Marketing talks to Regional and Country Sales about their lead generation programs prior to decisions. This allows the creation of an integrated approach and making sure Sales will be ready with an adapted approach to be part of the process.
- Define a common dashboard to track the results and attack funnel frictions from a corporate point of view instead of departmental.
- Implement a process and reporting mechanism based on the readiness to buy, such as the buying clock™, instead of a process based on steps already taken.
- Make sure that sales is using the same buying cycle mechanism for their forecast and plan of actions. It will allow them to
- Be focused on the customer and adapt their next step accordingly, instead of following a pre-defined series of steps;
- Adapt their next step in function of buying readiness of each individual person involved in the decision making process;
- Get all their contacts synchronized avoiding them to be the reason for complications (i.e. a DMU member you didn’t meet yet who becomes a non-supporter because of some wording or content in a proposal that was send too early in the overall buying cycle);
- Avoid doing the right type of action at the wrong time and maybe the wrong contact.
The Buying-Clock is based on the mental phases a buyer is going through from happy user over admitting pain all they to buying, implementing and using a new solution. The 24 hour of a clock represents a full cycle .
Stay tuned over the next coming weeks for more sales efficiency and demand generation tips.
A lot of books and blog posts have been written on the importance of implementing a universal lead definition. Yet, it’s not evident to find a ‘how to’ build one.
Discuss and take the decision with the involvement of people from sales, marketing and management to come up with your specific universal lead definition. A good universal lead definition should consist of 5 levels. Example:
Level 1:
A response from an individual to a marketing campaign or someone who has taken proactive steps to demonstrate interest in your message or solution.
Level 2:
A meaningful interaction (phone or e-mail) with an individual meeting the requirements of a fully qualified company. Thus the company belonging to one of your market segments.
Level 3:
Level 2 + the individual demonstrates a specific need for, and interest in, your offering.
Level 4:
Level 3 + the individual is in the process of defining requirements for a solution such as you can offer.
Level 5:
Level 4 + the individual is a key-contact in the decision making process. Add Buying-Clock™ time past 6 o’clock for those people already using the Buying-Clock.
I deliberately did not mention a defined timeline for the purchase and budget availability in level 5 as these are part of long debates in companies when going thru the process of building a universal lead definition. There is no need for those 2 elements, in my point of view, as long as the key-contact admits a pain (problem) on KPI level. (i.e. VP marketing: too low ROI on marketing investments) This is the definition of 6 o’clock on the Buying-Clock. The mental buying phase should be the key driver in deciding next steps. Elements such a strategic account or not, size of the company and type of solution will determine whether or not it is time to have a meeting with a sales rep. This type of lead allows you to have a pro-active approach and influence the requirements before the market research phase is started. This is the moment when the key-contact has a budget available and will start contacting multiple vendors for comparison.
Good luck in your process of defining and implementing a universal lead definition. Remember to make sure that the lead definition is well communicated to all concerned.
Companies have been doing their segmentation based on industry verticals for several decades. Vertical knowledge as a key differentiator has been added into the equation in a more recent history. Yet not all companies in a vertical are faced with the same problems and priorities at the same time. All of this has led to some important inefficiencies.
- People had to be trained on specific vertical knowledge and product knowledge leading to long ramp up times for people in a multi offering company
- Sales & Marketing facing difficulty to match specific needs in a vertical to the product offering
- Sub optimal Product/technology innovation due to conflicts in priorities
- Product releases not adapted to market readiness leading to a high cost of sales and low hit-rate
- A frustrated sales force and an unhealthy tension between departments because their concerns are left unanswered by management
- Sales loosing a lot of time in finding the “needle in a haystack” prospects
A lack of “scalability” throughout the entire value chain is the root cause . The impact on scalability of an organization should be taken into account in each decision you take.
Let me propose how to use segmentation as a way to better align marketing and sales thus improving the scalability of your organization:
- Get to “really’ know your customers by understanding the problems their faced with.
- Define KPI-level pains a prospect should be confronted with in order to seek your leadership. (i.e. VP-Sales- not meeting sales target or too high cost-of-sales)
- Map your differentiators and delivered capabilities to those pains.
- You will now be able to create a set of “pain-based segments”
- Plot your segments in terms of size, solution awareness in the market and level of differentiation.
- You will now be able to prioritize your pain-based segments
- Identify the impacted people in their organization as high as possible on the org-chart which could or will be involved in a buying cycle (key-contacts)
- Map above information for each of them and rank them in terms of impact. The most impacted person will become key in your marketing and sales approach
- You should now be able to write a value proposition for each of the targeted segments. This value proposition is the foundation for all buyer-aligned deliverables such as white papers, solution briefs, case studies, product collateral etc.
- Build a sales kit per segment covering the quantified pains, their causes, needed capabilities, quantified results, ideal buying criteria, benefits and unique features per key-contact
- Populate and qualify your database with suspects based on their pains and readiness to buy and launch a lead generation and/or lead nurturing program to start generating qualified leads for sales.
Above will result in an increased focus:
- More engaged employees
- A lower time to productivity as low as 6 to 7 months for complex solutions
- Increased hit-rate up to 75% and more depending on the level of differentiation you can proof
- Decreased cost of sales by at least 22%
Above shows how segmentation can have an important impact in terms of a better sales and marketing alignment.
Write a comment or question to dig deeper into this improved way of segmentation.
Dirk Verhaeghe, a recent new colleague, asked me the following question: How did you come to the conclusion that growth maximization is only achievable if you “design for scalability”?
People that work(ed) with me know and experience my passion to find ways to maximize the market potential of an organization at any given moment in time. But always taking the human factor into account and knowing that innovation and an entrepreneurial spirit are key to success.
Challenges such as:
- The right business model
- Aligning the whole value chain and not only sales and marketing
- Understanding customer needs
- Selling value not price
- Aligning the product road-map to market readiness
- Organizational change and structure
- Creating continued competitive differentiation
- And many more
are all part of the day to day life of people working in B2B environments.
The common denominator is the fact that each of above mentioned challenges has a tremendous impact on the business results, profit and the company growth. This both in terms of top-line and bottom-line results.
The fact that I summarize all these business and commercial aspects as “scalability” issues is far from surprising if you know my ICT background where scalable solutions, databases etc are part of the day to day vocabulary. That’s how the concept of “design for scalability” was born as a foundation for the methodology which I co-developed.
Underneath is a picture representing the ”design for scalability” concept.
Wikipedia is also referring to commercial scalability in above described way.
Feel free to start discussing how we can make companies more scalable in a pro-active way.
