Destructive B2B Sales Practices

May 17, 2010 by Robert Lesser | 6 Comments

 

New research from McKinsey & Company identifies destructive sales practices and prioritizes what customers want from B2B sales organizations.

The research is focused on end users and is statistically significant: McKinsey interviewed 1,252 purchasing decision-makers of high tech products and services at small, medium and large business in  the US and Western Europe. 

Research on end users and on this scale is relatively rare in the B2B world.   

Here are some of the key research findings from McKinsey:

  1. The buyer’s experience with sales and product or service features were the most important factors in a purchase decison – not price.        (All the more interesting given that the survey was conducted during the recession).
  2. A high performance sales force can boost share of customer by an average of 8 to 15 percent.
  3. The two most destructive sales behaviors were inadequate product knowledge and excessive customer contact.

In my mind, there are a number of considerations for a B2B sales organization:

  1. Quantifying the Impact - For a sales organization to change, the impact from poor sales practices will need to be defined.    The impact of an 8 to 15 percent customer share increase (per McKinsey) is substantial, especially for high ticket, complex B2B solutions.     Prospect and customer surveys (e.g. Win/Loss) on their sales experience can be used to quantify the impact of the sales experience.
  2. Better Sales Training - Training on solution knowledge and how best to engage customers are two key training areas for sales.    McKinsey calls for a centralization of content development and creation of compelling value propositions.    This seems to be a call for marketing and sales to align their efforts better on messaging.   Rather than grand training programs, it’s interesting that McKinsey calls for experiential training and on-the-job training.
  3. Raising the Bar on Sales Personnel -  Customers are empowered by online information sources and social networks.      Knowledgeable sales reps who bring a consultative approach and value to customers are a much better fit to today’s customer.      This heightened requirement should help to raise the bar on the calibre of B2B salespeople.
  4. Innovative Sales Methods & Tools - Innovative approaches to sales and lead generation enable sales to be smarter and faster.     Done right, sales can be more proactive and more meaningful in touching customers.    The risk is that customer concerns on the frequency of contact could increase should sales not add value or act smarter with that contact.

There are a number of events that could perpetuate rather than reduce destructive sales practices:

  1. The Sales Funding Squeeze- According to IDC’s Tech Barometer, in 2010 investment in sales will again outstrip IT investment.    This gap between revenue and costs will pressure sales organizations to scrutinize training expenditures.   
  2. Unrealistic Quotas- some of the comments on the McKinsey research pointed out that unrealistic quotas and short term horizons create destructive B2B Sales Practices.   According to CSO Insights, in 2010 sales quotas continue to rise even though attainment of quota was lower in 2008 versus the prior year and sales resources are less.
  3. Tech Mergers & Acquisitions - In Q1 2010, $68.8 billion of tech deals were announced versus $19.2 billion for the period a year earlier (source: Reuters).      More sales forces will be merged and rationalized consuming resources and creating distraction .      A recovering economy will create more opportunities for salespeople.   In this environment, sales education will be adversely impacted.

 

Comments Are Welcome

Are we on the path to resolving destructive sales behaviors?     What action will it take to be successful?

Resources

Blog Post on the Sales Renaissance
Webinar on the Sales Renaissance featuring LivePerson, Ariba and TriNet

Photo Credit

Posted in Sales 2.0, buyer behavior, outbound marketing, sales, sales enablement Tagged , , , , , , |

Online data is mainstream

April 30, 2010 by Robert Lesser | Comments Off

Has Sales 2.0 crossed the chasm?

Most of those who commented on my blog post of the same title, believe that Sales 2.0 practices have not yet crossed the chasm as the advancement of  Sales 2.0 practices lags the adoption of Sales 2.0 technology.

As part of his comment on the blog post, Umberto Milletti, Founder and CEO of InsideView, listed a number of  Sales 2.0 technologies:

  • forecasting
  • analytics/reporting
  • marketing automation
  • sales intelligence
  • sales compensation & incentives
  • process playbooks
  • quoting/configuration for complex offerings

Sales intelligence includes online data which is also known as ‘data in the cloud’.

Prior to Salesforce.com’s acquisition of Jigsaw on April 21, I asked Garth Moulton, VP of Community and Co-founder of Jigsaw if online data has crossed the chasm.

Garth responded:

I’m not exactly sure that something as amorphous as “Online Data” can be put into the Chasm discussion, which as I understand it generally refers to a product or company.

Let’s re-ask the question: Has the usage of online data sources moved into the past the Early Adopter phase?

My answer is absolutely- just witness the number of sales and marketing people in Fortune 100 companies, manufacturing companies, brick and mortar companies, et al that use Google or LinkedIn to find “online data” about prospects. If you want to refine the category to online data companies like Jigsaw and ZoomInfo, I will bring up the example that D&B licenses our contact data to sell to late stage companies. Another example is the amount of Jigsaw corporate customers (30%) that don’t have a CRM system in place. I assume that we all think CRM companies like Salesforce have “crossed the chasm?”

The facts seem to support Garth’s position:

  • Salesforce.com pegs the market for online data at $3 Billion
  • Over 95% of the Fortune 500 use Jigsaw
  • Demandbase, a compiler of online data, counts more than 30,000 sales and marketing professionals as customers.
  • Use of LinkedIn for prospecting and research has accelerated with close to 50% of the salespeople recently surveyed.
  • Hoovers, one of the pioneers of online data, is almost 10 years old (launched in 2001).
  • Data providers Hoovers and OneSource have evolved into providers of sales intelligence and data aggregaters.

If we believe that a solution has crossed the chasm at 16% (according to the Diffusion of Innovations), it is evident that online data has crossed the chasm.

Another sign that the market has matured is vendor consolidation.  The Salesforce.com purchase of Jigsaw will be one of many to come.

Michael Maoz, VP Distinguished Analyst at Gartner, predicts in a recent blog post that by 2015, 85% of all social media companies will be under different owners.

As online data has become a commodity, this Sales 2.0 solution has evolved from a standalone tool to one that is integrated to CRM systems.

With Salesforce acquiring Jigsaw for use with its internal collaboration solution  Chatter, we are upon the next phase where data is ubiquitous in our sales and marketing systems.        Data will seamlessly flow as part of our sales and marketing processes without having to initiate a discrete call for data.

Resources

Photo Credit:  Flik

Posted in database marketing, lists Tagged , , , , , , , , , , , , |

Insights on the Outbound Renaissance

April 12, 2010 by Robert Lesser | Comments Off

Outbound demand generation is experiencing a renaissance.   

Hastening this rebirth are pressures from dissatisfied buyers, a growing imbalance between spending on sales efforts and buyer’s budgets and scrutiny of return on marketing spend.

What to do?  

The answer:  Innovate to improve the buyer experience and enhance outbound productivity.

Organizations such as Ariba, LivePerson and TriNet are reinventing their go-to-market and sales strategies through innovative approaches to outbound demand generation.

  • Ariba radically changed their approach to event recruitment with startling results by using social networks and a sales intelligence solution.
  • LivePerson bolstered the outbound productivity of their enterprise sales team with a new telesales enablement solution.
  • TriNet increased sales productivity and expanded into new geographies more profitably with accelerated customer acquisition rates with a sales intelligence solution.

I reviewed these outbound success stories on our webinar on April 13.   Couldn’t attend?  No problem, go ahead and view the webcast here (no registration required).

The significance of the outbound renaissance on B2B sales & marketing is profound as these innovative approaches drive organizational change:

  • Sales Six Sigma – Once the domain of manufacturing and other back office functions, organizations like TriNet are ‘ripping apart and putting back together’ sales processes.     To drive scalable and profitable growth, sales and marketing teams through their operations teams, are taking rigorous, analytical methods to improve their business models.
  • Front End Loading of Talent – Enabled by intelligence and productivity tools, sales can now afford to position higher skill set and even subject matter experts at the top of the sales funnel and at the first touch with the prospect.     Ariba now engages sales reps to precisely target prospects in event recruitment programs.    In the past, the first touch would come from marketing and not sales.    
  • Hybrid Roles Align Sales & Marketing – Marketing operations collaborating on sales process.   Field marketing reporting to sales management.    Inside sales reps recruiting prospects for events.   These cross-over and hybrid roles are driving alignment between sales and marketing.
  • The Democratization of Sales Intelligence – Once the preserve of senior management or analysts, business intelligence is speading out to the far reaches of the organization.    At TriNet, front line sales reps are enabled to engage CXO level decision-makers at small businesses in timely, relevant and meaningful messages.     Prior to enabling solutions such as InsideView, only enterprise sales reps would be able to profitably leverage sales intelligence gathered from disparate sources.
  • Sales Labor Arbitrage -  The first human touch between the seller and buyer cannot be automated, only outsourced.   At least, that was the approach before new solutions like ConnectAndSell.   Now the low skill set dialing can be outsourced and the high skill set discussion with the prospect is conducted internally.      In the past, LivePerson outsourced appointment setting.  Now LivePerson’s enterprise sales team sets their own appointments. (Full disclosure: my organization, Direct Impact Marketing is a ConnectAndSell solution provider partner).
Posted in demand generation, lead generation, outbound marketing Tagged , , , , , , , , |