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5 Key Dreamforce Sessions and 3 Tips

5keyThere is a lot going on at Dreamforce. How do you choose which sessions to attend? This year there are many overlapping sessions, and conflicts between the keynotes and some fabulous breakout sessions.  It is not possible to cover everything, so you need to be judicious in your selections.

Tip: Remember that Salesforce make most of the keynotes available on YouTube very shortly after the event – so you will be able to catch up on these later.

 

My 5 Key Dreamforce Sessions for Sales Professionals

Tip: To get straight to these sessions in the Dreamforce Agenda Builder, first login to Dreamforce and then click on the title of the sessions here.

 

1. Sales Summit @ Dreamforce 2014: Mon 10/13 @ 10:00am

This is one mega event really. One day. Five sessions. Twelve of the world’s most respected sales minds. This promises to be one of the most educational (and entertaining) days at Dreamforce for sales executives. Bring your toughest questions. Walk away with answers — and a million new ideas on how your company can motivate sales teams and win more sales.

2.  How BMC Software Achieves Smart Sales Transformation: Wed 10/15 @ 8:30am

I am part of this session. BMC’s sales transformation story is amazing – a complete look at how to prepare a sales organization for our increasingly pressurized world.

3. Social Selling: A Live Conversation with Jill Rowley and Koka Sexton: Tue 10/14 @ 4:00pm

Two of my favorite social selling gurus, Jill and Koka think your sales team is on the brink of extinction! They will talk about the why, what and how to do Social Selling.  This session will not be boring!

4. How Salesforce.com uses Account Planning: Wed 10/15 @ 10:00am

If you use Salesforce, and you care about maximizing revenue from your key accounts this is the session to attend. I am thrilled to host two charismatic leaders from Salesforce.com to tell their story.  Everyone who attends this session also gets a free copy of Account Planning in Salesforce.

5. Triple Your Revenue With a Dedicated Sales Development Team: Wed 10/15 @ 2:00pm

There is a strong body of opinion on the rise of Inside Sales or Business Development.  This panel of 7 thought leaders in the area has a lot of insights to share.  Not to be missed.

 

3 Tips to Get The Best Out of Dreamforce

1. Attend the Early Sessions

Early sessions are better – energy level is higher and generally you get presenters who are at the top of their game.  Attend breakout sessions in the morning and visit the Cloud Expo in the afternoon.

2. Appropriate Clothing – Leave the Laptop

Ladies – leave the fancy shoes at home.  There will be a lot of walking. I am told that heels are a no-no. I wasn’t planning on wearing heels anyway :).

Ignore the forecast. It rains in San Francisco – so pack some light rain gear or a small foldable umbrella.

Don’t try to carry your laptop – it will get heavy really quickly. Ideally get a keyboard for your tablet, or carry an old-fashioned notebook and pen!

3. Be Social (Virtually and Physically)

There will be 125,000+ people at Dreamforce this year.  Connect on the Dreamforce app, or on Twitter or LinkedIn. There is a great opportunity to network.  Apart from the gala there are loads of parties – and they often fill up quickly – so pick the ones you want to attend and register.

 

 

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Why LinkedIn is losing its value to me

I don’t know about you, but I am a little frustrated with LinkedIn lately.  Every single day now I am getting multiple generic “I’d like to connect with you on LinkedIn” messages.  Most of these are coming from people I do not know, and as they are mostly generic, I have to assume that the senders are not really interested in making a connection – but simply are building up the contacts they have. That does not make any sense to me. In fact, I think it dilutes the value of their real network. Our Dealmaker Index Global Sales Benchmark Study would suggest that there is little correlation between the number of contacts someone has on LinkedIn and their revenue achievement.  The value is in how you build connections, not how you accumulate contacts.

I am a huge fan of social networks and have personally built relationships and won business directly as a result of our social media activity.  We have even built LinkedIn and Twitter integration directly into our Political Map Express and Dealmaker Smart Opportunity Manager products to make it easier for our customers to leverage their social networks.

At The TAS Group our core philosophy has been to shape thinking, cultivate customers and earn permission to engage. We try to follow 4 key principles:

1. The Social Universe is a great place to listen and learn

2. You Should Give Value First and Expect Nothing in Return

3. You Must Be Authentic, Be Prepared to Fail, and Don’t Give Up

4. It is advisable to be Open, Collaborate, and Co-Create – Let Others Play in the Community

The recent trend towards accumulating contacts seems to fly in the face of that. If those who you link with have a massive network, but you are not really connected to them, then it dilutes the value of your network, as they keep popping up as the link, and that sometimes gets in the way of people who you really now, and who might really help. Perhaps LinkedIn’s recent practice of continuously suggesting new people to connect with is partly to blame for this. It may well the case that LinkedIn has a different agenda – will we see them entering the CRM market with a ‘contacts-already-supplied’ strategy, who knows? – but as a social network to build connections it is losing its value, IMO.’

This was really brought home to me when a female colleague of mine received the worst kind of message.  It went like this …

Subject: Hello
How are you? I hope it has been a productive week for you..
I know the idea of using LinkedIn for an online dating websites purpose is weird. I don’t do this all the time. But i was captivated by your profile picture. I don’t how recent the picture is,but you caught my attention and you look very beautiful.We belong to the same group (Sales / Marketing Executives (CSO/CMO)).
However,I’d love to get to you know you if you’re single and available to date. We could get to know each other and meet for lunch,dinner or a cup of coffee whenever we are both comfortable to meet and depending on your schedule.
What do you think?

linkedin-message600

Really?

Is this really what LinkedIn has come to?

I seem to remember that, in the past on LinkedIn, you used to have to identify how you knew the person before you invited them to connect.  I, for one, would like to see that – or some other threshold of relationship – reinstated.

Otherwise the spam-factor will just increase and we will have to look at alternative solutions, and that would be a shame.

And yes, I will post this on LinkedIn, and see if there is any response.  If you care about this, please share.
 

 

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What to do when “No Decision” is not in the customer’s best interest

I have written before about the only two reasons that you lose a sale;

  1. You should not have been there (chasing this particular opportunity), or
  2. You were outsold.

I know I have fallen at both of those hurdles.  Sometimes being outsold means you lost to the dreaded No Decision.  In fact according a report I read from CSO Insights this is happening 26% of the time. Ouch!

Now in most cases when the customer is making No Decision they are in fact making the right decision. They will have objectively evaluated the project, and decided that this particular project did not reach the required threshold of return, or was not as important as another more pressing initiatives.

But in some cases they are just afraid, and No Decision is taking the easy way out.  This No Decision will often be accompanied by phrases like; “I don’t think we have the right team in place to implement this project now”, “We need to learn to walk before we can run”, “I’m not sure the team is ready to embrace this amount of change.” In truth they are just afraid.

They might be afraid of making an investment for which they will be held accountable. They might be afraid of something that is new. They might be afraid of change. They might be afraid of upsetting the status quo lest it might threaten their own status.

In these cases they are not in fact making No Decision, they are making a decision not to fix a problem that is broken. They are taking cover in the status quo where they are less likely to be seen as the instigator of something that went wrong. Sometimes that is a consequence of organizational culture – and in other cases it is  individual responsibility being abbrogated, denied, or ignored. But, is it your job to tell them?

I’ve written before that ‘A bad buying decision usually has a greater impact on the customer than a lost sale has on the salesperson’.  I believe that to be true, and I further believe that it is the sales person’s responsibility to tell the customer if they think the customer is making a bad buying decision. It is part of delivering on the trust that you’ve tried to earn.

In all of this post I have assumed that there was a real problem that the customer wanted to fix, the issues were identified, you were speaking the people who had the power to make the decision, and you had developed a joint vision of the desired end-state.  Then the customer got cold feet.

But how do you tell the No Decision customer that they have made the wrong decision – without it appearing as mere sour grapes, or that all you care about is selling them your solution?

  • First, be honest to yourself and about yourself. Acknowledge that you have failed to provide enough evidence to the customer to make them comfortable to make a positive decision.
  • Second, restate the problem you think the customer was trying to solve and the impact of No Decision
  • Third, withdraw from the sale, pointing out that this maybe the impetus for the customer to act (and maybe buy from your competitor.)   This is in the best interests of the customer. Maybe you’ve nothing to lose anyway, but that’s not the point. The point is that you must maintain your integrity.Your initial contract with the customer prospect was to help them solve their business problem.  That’s where you started and that’s where you should finish.

You have two other alternatives to this approach. (1) You can do nothing except walk away and lick your wounds. That serves neither party well, or (2) You can seek other (perhaps more senior) people in the organization who will reverse the No Decision made by your contact – but that’s the subject of another post.

I’d love to hear your thoughts. This is not a simple question.

 

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The Role of Account Based Marketing in Account Planning

You may be aware that I recently published my latest book called Account Planning in Salesforce.  (You can get a free extract here.) I was driven to write the book by the need for sales professionals and account teams to maximize their revenue from their existing large accounts and also to build a framework for targeting new customers in a structured more customer-solution-centric way.  It turns out that about half of sellers do not know how to maximize revenue from their existing accounts. In Account Planning in Salesforce I spent a little time presenting how I think account planning relates to marketing.  I wrote …

As 2013 unfolds, my prediction is that Account Planning will eclipse general marketing as a source of opportunities for revenue growth among winning sales professionals. The ubiquity of the Internet, your customer’s ability to find out about your products and services as quickly as you can yourself, the impact on social networks as a driver of influence and preference, the pervasiveness of mobile devices providing always-on communication, and the growing barriers to customer acquisition all mean that you can no longer be a generalist in your market. You need to be a specialist and expert in the business, strategy and market of those few customers with whom you are working.

 I viewed a webinar recently hosted by the excellent Megan Heuer from the equally excellent SiriusDecisions research company.  Megan is a smart lady and she and I have bantered in the past about the relative value of Sales and Marketing, concluding of course that they should be two sides of the same coin, each adding a different perspective, both of which added value.

Megan and Sirius are leading a charge for Account Based Marketing, and I couldn’t be more delighted to see this account based approach gathering momentum where sales and marketing activity can be truly confluent and deliver synergistic special value.  I am passionate about the value account planning can bring and I feel that this is a domain that has been under-served. (Hence the multiple hours in writing the book and making my contribution to the design of Dealmaker Smart Account Manager.)  Account Planning is an organizational discipline and Account Based Marketing has a critical role to play. In fact ABM borders on business development, and is where the lines can get a little fuzzy.  It means that Marketing needs to stay very close to selling and the account strategy – and in fairness that is not as common as we’d like to see. Applying marketing strategy to sales plans, and influencing the development of the plans can be very effective – but understanding sales is critical.

There is a healthy overlap between the principles of Account Planning and Account Based Marketing.  Indeed in the webinar to which I refer it was said that ABM sits on a foundation of solid Account Planning and of course that is true. As I listened to the webinar I jotted down some notes that I thought would be worth sharing and I have used those to structure this blog post. I have supplemented those notes with other thoughts as they came to me, learnings from our customers and a perspective gained from the research I did while writing Account Planning in Salesforce. I say that so that you know that it is likely that any shortfalls are probably mine.  But I do want to give full credit to SiriusDecisions for their ABM leadership. Seems only fair.

 

Why ABM Might Fail

ABM, like Account Planning, can be a tremendously reward endeavor, but there can be things that get in the way that you should be aware of:

  • Lack of account insights – If you don’t know anything about the account, the people in the account, or their business needs, it is hard to develop an effective account strategy.
  • Lack of alignment to sales goals – Marketing needs to know what sales need to accomplish in order to construct the strategies and activities to deliver on those goals.
  • Overly broad deployment - When marketing tries to take on too broad a role in a specific account or too many ‘specific’ accounts at the same time, it typically does not work.  The very nature of ABM is that is has to be account specific and as I said in Account Planning in Salesforce, you need to Focus for Impact.
  • Unreasonable expectations – According to Sirius Decisions, for large accounts, marketing should not be expected to source more than 10% of the sales pipeline (in contrast with 30% of pipeline from general marketing).  As sales has a small number of accounts that they are responsible for, so they should be really on top of it in each case and should be developing their own opportunities. (I’m not sure I agree with the 10% number. I think it can be much higher – but this might depend on how you allocate opportunity credit.)
  • Lack of resources - ABM requires dedicated support (Should not be a part time job).  This is particularly true if Account Planning is critical to your company.  SiriusDecisions would suggest that ideally, if you have the resources, you should have account marketing managers as part of the account team.  In Account Planning in Salesforce I talk about one of the roles of marketing as developing Marketing OSAs (Objectives, Strategies, and Actions), a critical part of the account planning and execution process. Someone from Marketing needs to have the aptitude and bandwidth to do this properly if they are going to have a role.
  • Undifferentiated tactic execution – attempting to say the same things to targeted large accounts as you do to the general market will not work.  Using generic messages will not work. We know this is true.  In fact, if you are positioning yourself as a strategic partner for an account, and they perceive that they are getting the same messages as everyone else, it will in fact damage the quality of relationship.

 

What needs to change?

If you are really committed to an account based go-to-market model (at least for a segment of your market) then you need to change a few things in your approach.

  • The data and insights that you use to develop your marketing tactics must be transformed from the general to the specific.  They must be assessed only in relation to the account and industry, and in the context of each of the people in the account that you are trying to influence.
  • Your marketing planning must evolve from theoretical modeling with Sales and Marketing in separate silos into account-focused fact-based analysis account, with Sales and Marketing operating in tandem.
  • Effective account planning is about getting the right Demand Management balance, and you should weave ABM into that context, eschewing the singular focus on short-term opportunities for a more strategic approach that balances the longer-term view with the urgent need to fill your pipeline.  Sales needs to stop measuring Marketing purely on the number of leads, but instead hold marketing accountable to account-level SLAs for very specific marketing objectives that are linked to very defined opportunity goals.
  • Account Management, in most companies, has always been owned by Sales (or some off-shoot).  To maximize the impact that ABM can have on your account you need to consider sharing ownership of the account management activity with Marketing.  This should deliver to Sales complete visibility into what ‘marketing’ is being delivered to the account and continuous nurturing activity to help maximize the return from the account.

 

When does ABM work?

Marketing is usually involved in general corporate marketing, general event marketing, general field marketing. Note! All the words start with ‘general’.  ABM can build on all of these and can take advantage of existing marketing services that are horizontal, but ABM is about getting vertical and customized for the account.  It should feel different for the customer.  The longer-term goal is to create assets that feel customized to the customer but are in fact configured best practices.  If well designed, you should be able to re-purpose these assets in several accounts. This is obviously easier when these accounts are in the same industry.

As you define relationship development strategies, specific messaging strategies, account-specific awareness building, account specific references or case studies, applicable win strategies, you should find that you will be able to take a similar approach in multiple accounts but with each configured to the specifics of the individual account.  These activities should result in relationship acceleration, your company being seen as different kind of partner than your generic marketing would deliver. You are looking for greater access to the key individuals in the targeted accounts and momentum in opportunity creation and advancement.

But you haven’t a hope of leveraging ABM unless you can build credibility and trust between sales and marketing.  You should ask yourself three critical questions:

  1. Is sales open to new kinds of help?
  2. Is marketing invited to join planning and execution?
  3. How can marketing be aligned to best sources of growth

As ever, trust and collaboration are critical. Marketing needs to do the hard work to contribute to insights and planning for the account that add real value.  Constant communication is important as the fulcrum around which the iterative process between Sales and Marketing maintain alignment.

But remember that ABM is not necessarily for everyone. Sales teams vary greatly in their approach to their accounts.  The quality of the relationship in each account is different. Some sellers welcome Marketing’s involvement in their accounts and accounts teams may be hungry for help and willing to engage. In other situations, Marketing may feel less appreciated.  The relationship between Sales and Marketing is not always cozy or cordial.  ABM requires work from both and in some cases the sales folks may not be prepared to put in the effort. All these elements factor into which accounts might be good candidates for an ABM initiative.

Don’t forget that it is exceedingly rare for marketing to be able to add real value in terms of account research for existing large accounts in which you are truly active.  If you have account teams that are properly engaged in the accounts, they will typically know much more about that account than any desk-based research from Marketing can provide. So looking beyond basic research, you should consider perhaps, as an example, relationship development strategies to craft approaches that might help engage key individuals.  That may require executive sponsorship programs, understanding the profiles and backgrounds of the individuals and building programs that might interest them.  Most account teams know what is going on within the account, but can generally benefit from ‘external’ assistance to help with getting to particular individuals. Marketing should be able to constantly feed the account team with examples, references, competitive positioning etc.

 

How to apply ABM

SiriusDecisions sets out a list of what you need to know to build a plan, categorized into three categories:

Required

  • Account industry
  • Account Buying centers
  • Wallet share (by buying center)
  • Sales goals  (by buying center)
  • Current opportunity status
  • Contacts  (by buying center)

Recommended

  • Key initiatives  (by buying center)
  • Relationship status  (by buying center)
  • Relationship map  (by buying center)

Best practice

  • Growth trend
  • Competitive environment
  • Engagement history

I think this is a good list to get started with and in Account Planning in Salesforce I expand on each of these in greater detail. You might begin by using this list to ensure that  Marketing is aligned to the account objectives so that they can build visibility and credibility; and develop relationship strategies with key executives, decision makers and influencers. And it doesn’t stop just at the account.  At the end of the day the mission of account planning and management is to build long-term business relationships in a complex account that enable you to create, develop, pursue, and win business that delivers mutual value.  Marketing will also need to align to account objectives for opportunity development specific to align your solutions to the customer’s business needs, and to help with competitive positioning and strategy. They should be the engine that provides the relevant assets.  They can help with proof points through reference cases and other external validation of your company’s unique business value, all dome of course in the context of the needs of the customer. For example, there may be marketing initiatives to:

  1. Move a targeted account from disinterest or lack of awareness to engagement and awareness of your company’s solutions in the context of their industry to meet common business objectives
  2. Create campaigns leading to opportunities to position your company as preferred provider of choice
  3. After sale, continue to nurture to strengthen account position for broad and deep penetration, achieving strategic relevance.

 

Risks to Consider and Critical Success Factors

ABM is a critical component of account planning but it doesn’t always work. Here are some of the most common pitfalls:

  1. It is not built on a foundation of solid account planning
  2. Marketing is focused on or measure by number or value of leads
  3. Marketing tries to apply its existing tactics to ABM and look to see where those tactics might be used to ABM, rather than considering the objectives for the individual account and then determining the correct strategy.
  4. Sales is not open to collaborating with Marketing and inviting Marketing into their accounts.

So, what do you need to succeed?

  1. Sales (or part of the sales organization) must be focused on a defined set of accounts
  2. Sales is working on account plans
  3. Sales and Marketing can work well together to identify objectives and then develop the right strategies and actions together to make it work
  4. Sales and Marketing need to be aligned to the concept that it is not just about demand gen.  It is often more important in certain accounts to be focused on creating awareness and influence than looking just to find the short-term opportunities.

 

Finally …

This might all seem a little hard, and you might well ask yourself “Do I really need a different approach when selling to big companies just because they are big?” or “Does Marketing really need to change?” What’s the matter with just using the very same methods that have worked in smaller companies or in the market in general? Are there really considerations that are so dramatically different that they call into question the basic techniques that succeed elsewhere?

The answer is both “Yes” and “No.” Yes, you need a different approach, but no, you do not need to throw out techniques that succeed elsewhere. Instead you need to build upon them, extending the basic concepts, and augmenting the methodology to yield a model more suitable to the size of the task at hand. The factor that drives the need for this reinforced ‘industrial-strength’ process can be captured in one word: scale. The fact is that a large company is usually a collection of small, interrelated commercial activities, organized by function or geography, specialism or purpose, competitive forces or market dynamics. When approaching any such ecosystem, a deliberate design is demanded. Optimal outcomes are rarely achieved without such diligent efforts.

 

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Gartner: Cool Vendors in CRM Sales

Gartner just released their 2013 Cool Vendors in CRM Sales report and are selling it on their site for $495.  You can get it  here for free.

According to Gartner, the 2013 Cool Vendors in CRM Sales offer new technologies that improve sales performance and effectiveness. They use mobile, social, big data analytics and the cloud to help salespeople improve their selling skills and find new prospects. We are delighted to be included in the list of just three companies that made it through Gartners diligence.

Key Findings

  • Cloud applications combined with mobile devices (smartphones and tablets) are enabling salespeople to be more engaged in the sales cycle in real time at the source of the interaction with the customer, thus making them more effective and efficient in capturing, managing and updating information throughout the sales process.
  • Internal and external social network intelligence applications are emerging to assist salespeople with finding and developing new sources for lead generation and moving these newfound contacts and opportunities to a quicker close and with greater certainty.

Discontinuous, or sporadic, classroom sales training is approaching a fast demise; sales technology applications that help salespeople use sales methodologies and automate sales processes are showing great promise.

Enjoy the read.  You can get the report here.

 

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Customers are not just for life – but for the network

It is well understood that the cost of generating business from a new customer is much greater than acquiring business from a new customer.  The least costly customer is the one who was referred by a satisfied customer. There are two dimensions to customer referral; 1) selling more to existing customers – perhaps in different business units in the same customer, and 2) delighting existing customers so that they become evangelists for you.  The only difference between these two markets is the definition of the market.  In the former case, the market is the broader market opportunity within the existing customer account, whereas the latter relates to a less structured, but in many cases equally connected market of ‘people like me’, or in other words, similar customers in a similar industry with similar problems.

My hypothesis, as mentioned elsewhere, is that businesses are less in control of the buyer/seller interaction – particularly in the Contact and Control phases of the interaction, between buyer and seller.  Customer Lifetime Value must be coupled with Customer Network Value, the value that accrues to a seller because of the amplifying effect of the recommendation chain.  Remember, customers are almost twice are likely to take a recommendation about a product or solution from ‘someone like them’ than from a company representative.

Network Effect

It is easy to get tired of the hyperbole that seems a requisite ingredient of Internet and Social Media conversations. For any industry you choose, somewhere in a garage in Silicon Valley, there is a group of college friends with an Internet connection and a few Macbooks, and a vision to ‘change forever’ how that industry works.  But we know that we are entering the maturing stage of the Internet economy, characterized by a growing prevalence of ‘cloud-based’ services, online communities discussing and evaluating our products, and subscription-centric business models. Unless you take notice and effective action, you are likely to be left behind.

Recent high-profile market entrants like Groupon, Zynga, Buddy Media, Pinterest, and Instagram have accrued value at a rate we’ve never seen before. That’s before we mention the ‘older’ stalwarts like Facebook or Twitter.  Never in business history have so many companies generated so much value (at least for their shareholders) so quickly.

Each of these companies has a different mission or vision, and some would argue varying degrees of verisimilitude.  In each case; one fact shines through. They all illustrate the amplifying impact of the power of the network, a concept first most uniquely evidenced by Hotmail – the free email service now owned by Microsoft.

In 1999, Fast Company published a story about Hotmail, and the lessons therein are as relevant now as they were then.

In Web circles, the Hotmail story is almost as well-known as the service itself. But, like so many Internet takeoffs, Hotmail almost didn’t get off the ground. Founders Bhatia and Smith had been turned down by something like 21 VC companies before they met Steve Jurvetson. Even he wasn’t all that impressed by the startup team’s big idea for a company called JavaSoft. But one feature of their plan — free Web-based email — did catch his eye. The talks heated up, and JavaSoft became Hotmail.

Then came a meeting with Tim Draper, 41, DFJ’s founding partner. It was the first time that Draper had met with Bhatia and Smith. Draper was enthusiastic about the company, but he was adamant about one small detail: He wanted to put a hot link at the bottom of every email with a message, “P.S. I love you. Get your free Web-based email at Hotmail.” Clicking on the link would bring the message recipient to Hotmail’s site, and let that person sign up for the service immediately. That idea almost blew the deal apart. “The founders thought that it was like Spam,” recalls Jurvetson. “And it’s true: Until Hotmail tried it, the contents of email were always considered completely private.”

Which is why Bhatia and Smith not only hated Draper’s idea but felt it was contrary to the spirit of the Internet. “They fought me for quite a while,” Draper says, remembering that initial meeting. “Then, finally, they came back and said, ‘Okay, we’ll do it. But no ‘P.S. I love you.’ ” Draper’s bemused smile turns into an oversized grin. “Then Hotmail just started to spread.”

And it spread unlike anything DFJ had ever seen. “We had to keep asking ourselves, ‘Is this a fluke, or is it something important to think about?’ ” Jurvetson recalls. “After the Microsoft buyout, the magnitude of the value Hotmail had created hit us in the face. We actually thought that the founders should have held out and not sold. But in the end, they really wanted to sell.”

Around the time of the Hotmail sale, Netscape, another pretty successful Web startup, asked Jurvetson to contribute to its internal newsletter, “The M-Files.” The assignment was twofold: First, to write about new companies in the DFJ portfolio that were using Netscape technology. Second, to examine what those companies were doing that was unique and to draw out some lessons. “That was the first time that I thought to myself, ‘How can I describe why Hotmail is special?’ ” Jurvetson wrote something and passed it to his partners for comments. In a meeting with Draper, the two financiers began trying to coin a phrase that would describe the phenomenon that they had helped create. They tried terms like “pyramid marketing,” “geometric marketing,” and “tornado marketing.”

Then they came up with a term that stuck — “viral marketing.” The email service had spread around the world with the ferocity of an epidemic. By passing along emails with a clear (but inoffensive) marketing message, current users were infecting potential users. And the rate of infection increased rather than decreased as time went on. Forget diminishing returns; Hotmail was enjoying increasing returns.

Jurvetson went home to his wife, Karla, a psychiatrist, and began poring over her medical books. “I read that a sneeze releases 2 million particles,” he says, “and I really started thinking about the idea of infection for the first time. A sneeze is only dangerous when there’s a crowd around. A sneeze on the Internet, however, can infect millions of people scattered across the planet. It’s as if Zeus sneezed: How many people would catch a cold?”

Suddenly, the principle behind viral marketing seemed so easy to understand. In this new world, companies don’t sell to their customers. Current customers sell to future customers. In exchange for a free service, customers agree to proselytize the service. Because recipients of Hotmail messages are almost always friends, relatives, or business acquaintances of the sender, the marketing message is that much more powerful. Each email carries an implied endorsement by someone who the recipient knows. 

Fast Company 1999

 There are two critical and prescient sentences in this last paragraph. “Each email carries an implied endorsement by someone who the recipient knows”  was a great description of the value of viral marketing and “In this new world, companies don’t sell to their customers. Current customers sell to future customers”, a predictor of the transition of power from corporations to individuals.

There is often an argument about the applicability of such examples to the B2B community, but, as mentioned earlier, while not all consumers are B2B buyers, all B2B buyers are consumers.  As if by osmosis, people are conditioned to new ways of thinking by the interactions they have as consumers, and begin to expect similar capability or convenience in their business connections and interplays. And it happens without any one noticing; incremental changes in behavior and expectation, satisfaction and dissatisfaction.

I will say again: The fact remains that all business people – including both sellers and buyers – are consumers, and the lessons they learn in ‘consumer-land’ shape their thinking and expectations in “business-land’.

The problem I foresee is that some companies might fail to see the value of the network effect as an accelerant in both developing business in existing customers as well as in creating awareness, interest and preference in new accounts.

Helping Customers Buy

Traditional business theory would teach a method to understand the Customer Lifetime Value (CLV) – a mechanism to consider how much a business could extract from a customer over the lifetime of that customers interaction with the business.  The thinking goes that because the cost of customer acquisition is high, you’re much better off getting more business from the same customer than acquiring new customers, and of course this is true.  But it doesn’t end there, but it is important to understand how you can be part of the recommendation chain for your existing customers.

I want to be clear that I do not recommend that you should cast aside older approaches to account development just because they are old, but rather learn from the past and enhance or modify to take advantage of the velocity and reach of the Social Universe. There is a risk that proven methodologies that have earned their rightful place as axiomatic principles in account development will be followed religiously without amendment, and without reference to the evolution we’ve witness in the Social Universe.  Even more damaging is the risk that these proven axioms will be seen as too rigid in this new world – and therefore deemed irrelevant rather than modified, throwing the proverbial baby out with the bathwater.  This is one time where evolution, rather than revolution, delivers most value.

In fact the old axiom that promotes the need to become a Trusted Advisor to your customer has never been more relevant.  As you can see from the diagram here, Trusted Advisors are present in the buying cycle throughout the buying cycle, and in fact participate long before the buying cycle begins.  They are an intrinsic link in the recommendation chain.  The difference now is that one could argue that the gap between Trusted Advisor and Vendor, previously occupied by the Credible Source and the Problem Solver, has instead become a narrowing chasm in which failure lives.

In our business, customers use Dealmaker Smart Account Manager to gain a picture of their current status in an account, and identify ‘white space’ areas to explore for potential business. The goal is to identify areas in the customer’s organization where your solutions might solve known business issues for each division or business unit in the customer’s organization, or where you can identify previously unknown opportunities for improvement.

Opportunity Map: Click for bigger image

It focuses however on aligning sales opportunities with the customer’s goals using a strategy map to provide insight to the customer’s business goals. If you want the customer to be satisfied with the product/service you deliver, then you need to ensure that you understand the need the customer has.

You’d be forgiven for thinking that being a customer is easier than being a sales person.  All the customer’s got to do is pick a supplier, right? But when the customer makes that buying decision, the risk shifts from the supplier to the customer – at least in the eye of the customer – and the impact on the customer of a poor buying decision is usually greater that the impact on the salesperson of a lost sale.  That’s important enough to say again:

The impact on the customer of a poor buying decision is usually greater that the impact on the salesperson of a lost sale.

For a customer to be comfortable, she must be really sure that the supplier has a deep comprehension of her (sometimes unstated) needs.  Uncovering or understanding even ones own wants or desires can be an unyielding search. When that quest is filtered through the lens of another, vision is often blurred, and the picture that emerges is uncertain. In a corporate context personal and company motives sometimes collide, or at least bring with them varying nuances of aspiration, and a panoply of potential wants and needs explodes. Customers and suppliers, sometimes unknowingly, share the consequent anxiety when they meet in the un-choreographed buy-sell dance.

Many psychometric studies show that each of us has different approaches to social interaction, leadership, teamwork, and relative strengths or weaknesses when it comes to strategic or tactical bias, detail or big picture orientation, and introspection or engagement. Consider then that over the course of your business life you’re likely to encounter the full spectrum of customers or buyers who will exhibit varying proclivities for action, engagement, or precision.

Each customer will be different. Some will want to lead the buy-sell interaction; others are prepared to follow the direction of a trusted supplier. More are at their most comfortable when working in collaboration with their supplier, and it’s this latter category that is most common, and certainly most productive for both buyer and seller alike.

Whether the customers you’re dealing with are current customers or new prospects, you can be sure that each is active in the Social Universe, learning others in their industry and listening to ‘someone like me’, and looking for people that they can trust – who are part of the recommendation chain.

So, what’s the best model for customer interaction?  Unfortunately there is no one answer that works in all cases, but there is a proven method that we would recommend that you follow. A collaborative approach to fully describing the problem being addressed is always instructive, even when customers exhibit tendencies of leader or follower.

The challenge often faced by a customer when looking to leverage the expertise of an external supplier can be summarized as:

  1. No easy or established way for the customer to map out the internal customer issues
  2. No mechanism to explain the business challenges to a supplier
  3. Uncertainly about whether the supplier understands the specific problem
  4. Need to gain alignment between customer and supplier to avoid any current or future misunderstanding

Now customers have the opportunity to look to their online community in the Social Universe to address the first two of these obstacles.

In May 2012, Quora, the question and answer site, raised $50m (at a valuation of $400m).  According to Quora’s own website:

Quora connects you to everything you want to know about. Quora aims to be the easiest place to write new content and share content from the web. We organize people and their interests so you can find, collect and share the information most valuable to you.

Quora is just one example of a crowd-sourced knowledge community, and it is noteworthy because of the depth of expertise exhibited by its members. But there are other places where your customer can go to find solutions to the problems they are experiencing; LinkedIn Groups, when effectively moderated, are a valuable source of experience waiting to be published and frequently are quite deep in very specific industry areas.  If your customer is asking questions in these communities, and you are not there answering the questions, you can be sure that your competitors are.

It is harder than ever to attract new customers early in their buying process.  You need to leverage your current customers by first delighting them, and then making it as easy as possible for them to recommend you to others by building your own on-line community, publishing customer videos on Youtube, and turning your most successful customers into your most powerful advocates.

In the next post, I will relate how Mark Benioff, CEO of salesforce.com, is a master of leveraging the network value of his customers.

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Social Business Phases – a factor that is transforming B2B sales

[This post relates to the third factor of a series on 6 Factors that are transforming B2B Sales in 2012. This factor deals with Social - and I have broken that down into four separate posts. This is the third of these posts.]

Social Business Phases

All commercial transactions go through three phases; Contact, Contract and Control.  In the Contact phase, the seller is trying to find a buyer in his market where he can first create awareness in the mind of the potential buyer of the existence of his product, hopefully to be followed by interest from the buyer to learn more, with the ultimate goal of creating preference in the mind of the buyer for his (the seller’s) product. In a potentially parallel activity, the buyer seeks out information about potential suppliers and their products. Price, quality, fitness-for-purpose, reliability and reputation are each a consideration to be weighed when making the final purchase decision in the Contract phase, where terms of purchase are agreed before the parties enter the Control phase when the seller is expected to deliver on the promise of the contract.

Interactions in the Social Universe impact each of these transaction phases, and in many instances represent the fulcrum of trust on which a business rises or falls. This is immediately obvious in the Contact phase of a transaction, is less apparent in the Contract phase, and once more assumes critical importance in the Control phase.

Today, many sales and marketing social media activists focus their efforts in the Contact phase of the commercial transaction.  The Contact phase is where initial impressions are made.  But it is important to consider that because of rapid adoption of social media by customers, either individually or in communities, suppliers will always have fewer resources to apply to these interactions than the customers have.  Simply put, there are more customers than internal employees, and targeted efforts supported by technology for automation is a requirement. When approached strategically, practitioners realize that interactions have replaced transactions, and resources are applied in listening first, and then engagement followed by a rhythm of considered contribution.   The Contact phase is the opportunity for suppliers to become part of the buyer’s conversation even before the buyer is in a buying cycle, remembering that interaction between buyer and seller in the traditional buying cycles have changed in the Social Universe.  Where before buyers would engage with sellers early in the cycle to learn about their products and services, and get ideas about the potential solutions on offer, now buyers go to their social network for input in these areas and only engage with the seller once they have a clear picture of how they plan to buy.  If the seller is not part of that early conversation thread, the only conversation he is likely to have is one about price.

During the Contract phase, social has less of a role to play.  Here the buyer and seller get together to agree the terms and conditions of the sale and the action are played out less in a social context than in a one-to-one environment.  Impressions formed during the Contact phase impact the mindset buyers bring to the negotiation table.  Buyers will likely be more inclined to gravitate towards the optimum outcome of a negotiation, i.e. one that is good for both parties, and being less inclined to negotiate the maximum outcome for themselves, if the negotiation table is set with mutual respect, trust and credibility, each of which are factors that can be shaped in the Social Universe in the Contact phase.

In traditional business, the Control phase was primarily concerned with the monitoring and enforcement of the contract, and both involved high transaction costs, especially at large distance.  Monitoring means that the business partners check whether the other party is doing what he promised to do, and if shortcomings emerged, the next step was enforcement of contract.  The most common solution to this has been legal enforcement, an expensive and arduous process, and not adoption for most individuals when dealing with large corporations.  Over recent times, in many, but not all cases, suppliers have become more conscious of their obligations to their customers and the better, and more successful companies have become proactive about how they serve their customers and deliver on the promises made in the commercial transaction.

The big change in the Social Universe is that through social networks and online communities, customers have found a platform through which they can wield a very powerful weapon – customer sentiment – to persuade, embarrass, or indeed enforce large corporations to come clean, to be more transparent, and in the end to deliver on or to deliver, not just on the promises made in the contract, but also on what their customer deem to be fair.

Altimeter’s Jeremiah Owyang, in an early assessment of the business case for what was termed Social CRM in 2012, developed a model of 18 Use Cases for Social CRM that illuminates well some of the possibilities for activity in the Social Universe across the Control, Contract and Control phases of the commercial transaction – as I have described then here.

As I said earlier, the ubiquity of social networks, has made the need for honesty, integrity and authenticity more stringent and it is increasingly transparent when these elements are absent.

Not only is it anecdotally evident that commercial transactions can be more profitable when built on a foundation of trust, but studies have shown this to be empirically true at micro-and macro-economic levels.

 

In Umair Haque’s words:

“Good businesses are more trusted by all stakeholders. Trust is a potent weapon, because it slashes transaction costs tremendously. In turn, good businesses enjoy stronger, thicker, richer relationships that fuel a higher volume and velocity of trade with less churn. Mobile operators, for example, are as obsessed with churn (the ratio of customer retention to customer loss) as teenage girls are with vampires. Why? Because, thanks to an arsenal of unfair tactics like hidden charges, they enjoy no trust economies to begin with.”

In some ways the rise of social media was inevitable against a background of declining social capital.  If we can’t trust business leaders, governments or other figures of authority, then whom can we trust? The answer of course is that we trust our peers more than any other. ‘Someone like me’ is the most highly trusted persona.

 

During the recent economic turmoil, what happened was not so much a recession as a fundamental restructuring of the economic order. It has forced us once more to focus on true difference versus positioned differentiation.  It re-aligned a focus on values and ethics, and it has underlined the value of the asset that is trust. But, trust in business, between customers and suppliers, is at an all time low.  A study from the Pew Research Center shows that the percentage of people who trust business dropped from 58% in 2008 to 38% in 2009, and we’ve not managed to turn the corner on this one.

 

Only 29% of people trust what the CEO of a company says! Customers are almost twice are likely to take a recommendation about a product from ‘someone like them’ than from a company representative.

The transaction costs in contact, contract and control phases are closely linked to the trust issue.  Who you trust is at the core of finding reliable information about business opportunities, potential business partners, suppliers or customers, and, evidentially, about their trustworthiness.  It is important also when negotiating terms of the deal and trust – based on proven delivery of the promise made – is the dominant factor of how likely the customer is to recommend her supplier to her social network.

In the Social Universe, this suggests a progression from considering the value of a customer in terms of their lifetime value to the business – the Customer Lifetime Value – to an evaluation instead of value of the other potential buyers that customer will influence.  I refer to that as the Customer Network Value.

The topic of Customer Network Value will be discussed in the next post

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Video Blog: So you think you have a $500,000 sales forecast?

I spoke at InsideView’s Insider Summit meeting in March 2012. The topic was about sales metrics that you might measure to calculate your sales velocity – the revenue you can achieve every day – and some ideas about what you might do to improve your sales velocity, and also achieve accurate sales forecasts.

The video has been edited to remove the Q&A and to make some of the slides easier to see. Click play to view the video. It runs about 25 minutes.

 

This is my first video blog, and I’d welcome any comments on the format, or comments or questions on the content.

 

 

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12 Thoughts for the 12 Days of Christmas

1. Being a pioneer is sometimes a lonely place, but a pioneer can build a community

2. There are only 2 reasons why you lose a sale

3. The impact on a customer of a bad buying decision is greater than the impact on a sales person of a lost deal

4. Even if your forecast says so, deals don’t always close on the last day of the month

5. Early failure is better than late failure

6. Winning sales cycles are getting shorter – you need to know why

7. You can’t actually ‘take the personalities out of it’

8. Trust is not transferable

9. The only way we can realize the worth of our own opinions is by valuing the opinions of others.

10. Perspective is worth 90 IQ points (Alan Kay)

11. “You lost that deal. Now you’re behind quota!” is not sales coaching

12. Gartner’s Magic Quadrant isn’t in fact ‘magic’

By the way, if you want to gain some perspective over the holidays … visit WITNESS and think about how you can help.

Happy Holidays – thanks for visiting so many times this year.

Donal

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Blueprint for Sales and Marketing Alignment – Part 5 – Managing the Pipeline

It has been a while since the last post in this series.  We’ve been really busy with the launch of the Dealmaker Index global sales benchmark study.  The data that we’ve gathered from that study underlines the need for sales and marketing to be on the same page.  In my post The Actual Cost of Sales and Marketing Misalignment, I draw from the Dealmaker Index data to show that there can be a difference in quota attainment of up to 25% between those organizations where sales and marketing are singing in harmony, versus those where these two interdependent functions are just singing their individual tunes.

You can find the earlier posts here:

In the last post in this series, I focused on qualification of opportunities, to help both sales and marketing identify which deals you could win. By qualifying opportunities well, you know where to spend your time to meet your quota each month or quarter. But while many companies’ financial cycles force measurement in four financial quarters, it’s rare that a customer’s buying cycle will start and end every three months. Maintaining a strong pipeline, with enough qualified opportunities at each phase in the pipeline, is the only way to avoid the quarter-end crunch that often results in unnecessary discounting.

Pipeline Structure & Management

It is often difficult to decide how many stages you should have in your sales pipeline. At The TAS Group, we have seen different companies with their pipelines segmented into anything between three and 12 stages (we recommend no more than six) in the pipeline. Every week, or month, sales managers then ‘manage’ the sales force by working through each individual’s sales pipeline to determine how many opportunities are at each stage, and what probability to apply to each opportunity. More often than not, this is a fruitless exercise for two main reasons.

First, subjectivity plays a large part. In most cases, the interpretation of how to categorize the opportunity is left to the salesperson’s discretion. The buying cycle is often ignored, and there is usually little linkage between the key qualification questions used, and the stage of the process. Clear ‘customer-evidenced’ deliverables are linked to each stage of the sale, and overall productivity increases.

Second, it is futile to determine the value of a pipeline by multiplying the value of each opportunity by the probability of it closing. You either win the deal or you lose. Having 10 opportunities at 10% probability mathematically may be the equivalent of one full opportunity – but it is not the same as having a signed contract.

Keep the Funnel Full

You mightn’t want to do it, but sometimes, as a sales person, you’re going to have to generate your own leads. You can’t always rely on marketing. Getting appropriately-targeted customers into the top of your sales funnel is the source of your raw material. Without that raw material, you can’t build a pipeline. When there are gaps in your pipeline, pressure builds on the few opportunities you have. You’re tempted to try to progress a specific deal too aggressively.

The likelihood of finding a good opportunity is dependent on the type of activity you undertake. If you’ve got your act together, if you are truly a sales professional, you have a broad network of contacts who are potential customers. They respect you and the value you can bring to their business. Your existing customers can provide you with further business within their company, and referrals to their counterparts in similar companies. Strong relationships with industry consultants and analysts are a good source of recommendations for new business opportunities.

Your own market assessment and development activities will always provide the best quality of sales leads, but be sure that the folks in marketing aren’t working in a vacuum. Make sure they are in lock-step with your needs. Help them understand what’s exciting the customers. Together, you can craft effective seminar programs, social media activity, telesales, or emarketing campaigns for your territory. Marketing often bemoans the fact that they generate leads and the salesforce ignores them. Get them on your side, and help focus their activity by telling them what you need, and then by showing them how you are responding to the good work that they do.

Rocks and Stones and Pebbles

If you want to fill a barrel with rocks and maximize the capacity of the barrel, you have to fill the gaps between the rocks with stones or pebbles. It’s the same with your pipeline. Experienced sales professionals will understand that relying on a small number of big deals is risky, and they will balance their opportunity portfolio with smaller deals. While waiting for the big deal, no one is making any money and desperation levels increase if there isn’t a backup plan. Your negotiation position weakens, and that major opportunity turns into a minor profit deal. Rocks, stones and pebbles make for a full barrel.

The Dealmaker Pipeline Snapshot

The Pipeline Value Factor

There are four factors that determine the health of a sales pipeline:

  • Integrity of data
  • Deal value
  • Number of deals
  • Balance across pipeline stages.

The information in the pipeline system must be pristine, continually updated to reflect progress, wins and losses.

How long is your typical sales cycle? How much time passes during each phase of the buying cycle? To keep the pipeline balanced, and maintain a steady deal flow, you need to have an adequate number and value of opportunities at each stage in the pipeline. In Dealmaker we use the Pipeline Value Factor, or PVF, to help gauge the value.

To achieve 100% of, say, a quarterly target, consistently over consecutive quarters, PVF is the measure of what multiple of that target number you would need to have in each stage of the pipeline, at any point in time.

Determining what opportunity value you need to factor into each of the pipeline is best calculated by reference to historical data:

  • On average, how long does it take for an opportunity to progress from initial engagement to closure?
  • How many of the customers that you had identified this time last year have progressed to further stages of the pipeline?
  • How many have closed?
  • How many were lost?

An effective pipeline management system, consistently executed, provides clarity and visibility which, together, gives both sales and marketing greater control. A true pipeline provides an early warning system; it shows where you are strong and points to areas that need attention. Use our system or develop your own. Use it well and it will bring you an uncommon freedom to focus on what you have to do today in order to achieve your revenue targets consistently, without the interminable stress that accompanies uncertainty.

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