Wednesday
Mar082017

Increasing Close Rates on Marketing Leads

Many times your company’s products or services provide great value to your prospective customer, but you still don’t get the business.  Often times, this is due to your prospect’s imperfect business decision process. Common process imperfections include:

  • Lack of an internal champion to push through the decision process
  • Internal champion does not have institutional authority, skills, or knowledge to drive decision process
  • Decision maker is immersed in latest firefighting activities
  • High priority project is demanding everyone’s attention
  • Prospect is distracted by projects with lower ROI than your offering
  • No forum for exploring the economic value of your solution
  • Only a portion of the economic value of your solution is understood by the prospect
  • In competitive situations, the process focuses on a laundry list of features (i.e. some RFPs) as opposed to the capabilities that will provide the customer the greatest business benefit

 In these situations, converting the lead into closed business is dependent on the ability of your sales team to improve the prospect’s business decision process.

Let’s take a quick look at the typical abilities of three categories of sales people:


1. Order Takers

This is the only level that does little work, and simply acts as an administrative order taker.

 

 2. Information Providers

The majority of sales people fall in this category. Anyone whose has had a job picking apples knows this is very hard labor, even if your range is limited to low hanging fruit. Level 2 sales people follow up on leads and respond to all requests emanating from the customer’s business decision process.

If the fruit is within reach, they are able to convert the lead into closed business. If any of the common decision process imperfections like the items above exist, these sales people are unlikely to get the order.

They require large numbers of qualified leads to meet quota, and success depends heavily on finding an existing internal champion within the prospect’s organization. Since these internal champions are likely to already be looking for solutions, they have likely contacted a number of your competitors. Count on a lot of competition.

In addition to low lead conversion rates, these sales people have a difficult time forecasting odds and close dates. They are merely providing information to the decision process, and have limited insight into what is happening within the prospect’s company. Great amounts of sales time are lost pursing “high” odds opportunities, which are in fact are low odds opportunities.  Typically, time allocated to developing new leads suffers, which can result in months of missed sales goals.

“Information Providers” need a different approach; they need ladders and other tools to reach the higher fruit.

 

3. Decision Process Contributors

Contributing to a prospect’s business decision process is analogous to using a ladder to get at the fruit higher up in the tree. The sales person’s deeper involvement through improving the prospect’s business decision process increases lead conversion rates, and results in more reliable forecasting of opportunity odds, revenue, and close dates. Accurate forecasting has many benefits, and saves significant amounts of sales resources wasted on opportunities with inflated odds (see Opero Partners article “Highly Accurate Sales Forecasting”).

The following is a partial list of approaches used by “Contributors” sales people use to address the process imperfections mentioned in the first paragraph of this article.

  • Using business information to frame the conversation, versus product/service/feature/demo information
  • Helping prospect identify and structure all of the steps of a complete decision process
  • Helping prospect identify the participants in the decision process and their roles
  • Working through prospect business issues essential to effectively utilizing your company’s product/service
  • Contributing to the prospect’s internal recommendation document with high-value items such as ROI materials
  • Assist the prospect’s champion in navigating their internal decision process

Prospects will only let sales people contribute to their decision process when they provide clear value, and some processes (e.g. RFPs) are highly structured and resistant to improvement. However; even in these highly structured process there are opportunities to contribute to the prospect’s business decision process.

Often times level 2 sales people sequence activities in the opposite order of level 3 salespeople. For example, Level 2 sales people often rush to present product demos on the hope that an attendee will champion the decision within their company. Prospects are forced through long presentations of product features and functions, and then do all the work to sort out which features may be of value to their business. Level 3 sales people work with their clients to identify the business value by focusing on capabilities of their solution that contribute value to the prospect’s business.

While this article strongly advocates the benefits of Level 3 selling, in the real world each opportunity requires an assessment of how likely you are to close the business without contributing to the prospect’s decision process, and how much process involvement is required to substantially increase your odds of success. Getting involved in the prospect’s decision process has risk and requires executive level conversations, which is the principal reason many “Information Providers” are stuck in level 2. To minimize risk top sales people find incremental opportunities to deliver their value, and gain the prospect’s trust.

While all companies strive to hire the best sales people, “Decision Process Contributors” have many job opportunities and migrate to the hottest companies. Fortunately, companies can develop and teach level 3 selling to their existing sales people. We have had considerable success in growing sales people from “Information Providers” to “Decision Process Contributors” using a set of practical tools and processes.

Summary

Remember, your prospects deserve the opportunity to fully understand how your service and products can improve their business. Get involved, and add value.

If you would be interesting in other articles or to discussing B2B sales over coffee, please feel free to contact me:

Phil Solk

650-854-2846

email phil@operopartners.com

Monday
Apr252016

Gaining access to the customer decision maker 

Keys to Sales Success Series

#1 Gaining access to the customer decision maker

 

Shortening sales cycles, increased sales success and deal size all depend on working directly with the decision maker who will buy your product or service.  All too often, sales people spend countless hours and resources working with a customer sponsor, only to find out their manager had very different criteria for buying.  Additionally, the most effective sales techniques using value justifications are very effective with decision makers, but less so with customer sponsors lower in the organization.  These sponsors frequently focus on features and functions at the expense of overall value of your solution to the customer’s business. 

Decision makers who have to get approval from one or two layers higher in the organization are simply another type of Sponsor.

The decision maker not only has the authority to select the solution, but can also write the check. This is the person who can truly sponsor your business solution.  For this reason, we will call this person our “Business Sponsor”.  All other customer contacts are simply Sponsors.

In this article, we’ll discuss the basic flow in the three phases of accessing the Business Sponsor:

1)      Determining if the Sponsor we are talking with is the Business Sponsor

2)      If we are not talking to the BP, how do we determine who the BP is

3)     How to gain access to the Business Sponsor

 

1)     If a Business Vision for your solution has been successfully created with a Sponsor, they will naturally want to proceed with validation steps. Validation steps could include demos, customer references, value justification spreadsheets, or any other activities that can verify your company’s ability to deliver the value achieved through your solution.  This is a key Pivot Point.  Your prospect is asking you for something, so it is reasonable to request something in return. It is very fair for you to ask “If we complete these validation steps to your satisfaction, are you able to commit to buying our solution or do others need to be involved in the final decision?” If you are talking to the true Business Sponsor you will receive an unqualified conformation of their ability to make the final decision.

 

2)     Any hesitation is your clue that you are not talking to the Business Sponsor, and you need to ask if any other people will be involved in the final decision.  Make sure you are thorough in investigating this area to ensure you can identify the final decision maker.

 

3)  Once the Business Sponsor is identified, ask to meet with them to add their validation steps to the Validation Plan. If you sense the Sponsor is not going to support this reasonable request, ask to speak with the other people the Sponsor mentioned. Perhaps one of these people will help you get to the Business Sponsor.   If the Sponsor won’t introduce you to other potential Sponsors, you need to find another way in or consider dropping the opportunity. While talking to any prospect seems like a good idea, you time is often better spent developing new leads.

Please feel free to post any questions or thoughtful opinions on this article. Contrary views are welcomed!

Highlighted phrases are key concepts that will be discussed in future articles.

Friday
Jun242011

Rapid growth? Congratulations; you’re in trouble!

Every entrepreneur works hard to achieve the ultimate in sales performance – the “hockey stick curve.”  This is not actually shaped like a hockey stick; it is known in mathematics as an exponential curve, and it’s what you get when growth is constant over periods of time.  For example, I recently worked with a company that grew its sales by about 90% per quarter for five quarters after its product was released.

While growth like this is exciting and certainly desirable, it can lead management to focus prematurely on scalability at the expense of keeping an eye on the match between its value proposition and the marketplace.  Early adopters may be purchasing the product for different reasons than the broader market will. This is where high-tech businesses in particular can get into trouble.

The problem is that the exponential curve has some worrying implications:

Early buyers are technology scouts. Most large organizations have applied research groups that serve, among other purposes, as technology scouts.  To you, they will look like they are buying your product in order to apply it to a serious problem that their company faces, and in fact they are doing so. But they look to their employer like they are buying your product in order to learn about using your technology and to assess its potential application to their business. In other words, their decision criteria are different from those of later buyers.

In my first startup, I was very proud to have an early customer list with many Fortune 50 companies. It was only after years of working with diverse startups throughout the high-tech space that I realized that the same early buyers showed up on the customer list of virtually every startup that was having early success.  It’s indeed a very encouraging sign that they’ve bought from you; just be aware that they’ve also bought from the early leaders in every market segment potentially relevant to them, and never bought in volume from most of them.

 

Almost all buyers are late buyers. The nature of the exponential curve is that the buyers you see next year will become the majority of your installed base, and they may not be like the buyers you know and love. They will likely be less sophisticated, buy in higher volume, and be more price-sensitive. Unlike the early adopters, who buy because your product is high-tech, they buy despite the fact that your product is high-tech. “High tech and new” equates to “risk” for the buying organization and, in particular, to job risk for the decision maker. They will buy the lowest-tech solution that meets their need. So you’ll need to evolve your product to hide the technology “under the hood,” and make it as similar to conventional offerings as you can.

 

Later buyers are less sophisticated than early buyers. The product will need to become simpler, easier to understand, and easier to use. The requests from early users for more sophisticated features must be balanced against the likelihood that later users will not only not care about them, but find their presence makes it hard for them to learn your product. Product support will become more critical as the background of your users becomes more diverse.

 

Sales will be made through increasingly indirect channels Your in-house sales team will be unable to grow exponentially. You’ll need to find other organizations who can engage the exponentially increasing number of prospects. Your expression of your product’s value proposition will need to become simpler, so that salespeople who are not your employees can effectively sell it to buyers who are not like the ones you know.

 

These are all challenges that can be met through effective execution. The reason most startups with fast initial growth don’t make it, I believe, is because management fails to anticipate these issues and fails to see that rapid growth means not just scaling up, but also transforming every aspect of the product and the organization to meet the changing nature of the next customer.