How to Choose the Right B2B Sales Model

Sales ModelA big factor in the entire lead-to-revenue (L2R) process is making sure that you start with the right marketing and sales model. In our initial engagements with B2B clients, we are sure to ask them the types of questions that let us know whether their go-to-market model needs just a tune-up or a complete overhaul. See related blog post on this subject.

Before you evaluate a new way of doing business, it is very helpful to make sure you fully understand your current situation. Here are six key questions to ask:

  1. How did your current marketing and sales model evolve? We find that many of the go-to-market models we see happened over time because of ad-hoc actions – and not a well thought-out and top-down strategic plan.
  2. What is your motivation for keeping the status quo? Sometimes people that want to do better stick to their current model because they know that change will be long and painful or because a CEO, founder or board member wants to keep it despite the flaws.
  3. Are you doing things out of habit or by deliberate choice? A lot of what we do, and not just in marketing and sales, is done out of habit. If that is the case at your company, ask the question: If we were starting over, would we design the system in its current form. If the answer is no, ditch the habits and implement a better model.
  4. Are your sales force and marketing teams earning their keep? We work with some great companies that have solid professionals in the marketing and sales ranks. But I have seen others where the team is just not up to the task of creating and implementing an optimized sales model. This question may lead to some tough decisions but it’s better to get this figured out early.
  5. Are your current processes helping or hindering progress? When designing a lead-to-revenue framework, you should start with processes. Here are seven items to confirm:
  • You use conversion ratios to monitor results at every step of the process and you utilize this data to consistently produce greater results.
  • The system produces a high percentage of qualified leads relative to raw inquires (this is a key conversion metric).
  • You follow up all leads in a timely manner (within 12-24 hours), except those that are obviously unqualified.
  • The inbound lead flow is balanced by territory, sales rep, and product line.
  • You produce inquiries/leads at a reasonable average cost per lead. These vary by industry and sales model.
  • You capture all information generated from inquiries and from follow up efforts immediately (and preferably automatically) in a database system.
  • You have a systematized nurturing process that converts a high percentage of today’s B2B sales leads to future customers.

You should also consider whether there any time bombs at your company? Time bombs are those issues that, if not addressed, could have serious consequences downstream. If you prefer a different analogy, think of time bombs as the potential “Achilles heels” of your organization – where you are most vulnerable to atrophy or attack.Here are a few of the most insidious time bombs:

  • Metrics that are way below standards – for example, a high cost of customer acquisition.
  • Good products, but a sales team that is stable, comfortable, and inefficient.
  • Channel partners that are leaving you for the competition.
  • A prohibitive cost-of-goods.
  • Products that are more than one generation behind the competition.
  • Staff that is mediocre or undependable.

Ask the tough questions early, decide whether you need a marketing and sales model tune-up or overhaul, and then take action to ensure a more successful 2018 B2B sales and lead-to-revenue model.

Can You Really Use Marketing to Shrink the B2B Sales Cycle?

new-sales-model-thumbnailIt seems at least once a week that I talk to a B2B company about how to shrink their sales cycle. Sales executives and CEOs get especially frustrated because their quarterly sales forecasts become much harder to predict when the sales cycle timing is all over the map. For example, we have one technology client where it seems half their deals close in days or weeks, while the other half can take six months or more. So what is going on and what can us B2B marketing types do about it?

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Does Your B2B Sales Model Need an Overhaul or a Tune-up?

When designing a new, or optimizing an existing, sales model, you will be faced with some tough but extremely important decisions. The lifeblood of your business is not only in creating valued products and services, but also the ability to acquire new customers at a low cost relative to the average transaction amount. When you can do this, you get positive attention from the CEO and investors.B2B Sales Models

The adjacent graphic shows the major B2B sales models and how they relate on two important criteria: the cost per transaction and the amount of personal interaction required. When you include hybrids that combine elements from more than one model, there are dozens of possibilities.

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How to Validate Your B2B Go-to-Market Plan

Go-to-MarketMy team and I are often asked to comment on – or do a more formal evaluation of – a product or business concept prior to launch. This may be part of a new venture concept or a new product line in an established business. In either case, the basic question is: “Will we be successful in the marketplace?” Since we have been involved in about a dozen business startups and a couple of dozen new product launches, we are certainly familiar with the promises and pitfalls of launching new products and ventures.

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Sales and Marketing Plans Need to be Aligned

Marketing and Sales Alignment

As a B2B marketing outsource provider, my team and I usually work very closely with the sales department at our client companies. The goal is to achieve effective alignment between what the marketing and sales teams are doing: driving to a common goal and reaching agreed-upon revenue targets. In the best-case scenario, we get to review and provide input for the sales plan. At the least, we want to understand the sales model so that we can formulate a marketing plan of attack that best supports the sales plan.

As an example of why this is important, imagine two very different sales models: In the first example, awareness is created and generated leads are fed to a business development function. In this scenario, direct sales reps will only see leads that have been pre-qualified, usually by a business development rep (BDR) who has personally qualified inquirers by asking a series of questions about budget, authority, timing and so forth. To best support this type of sales model, we want to drive as much activity into the top of the funnel as possible, creating the critical mass of inquiries needed to achieve the target number of qualified leads that have passed through the qualification process.

Let’s now look at the second sales model and how we align it with the marketing plan. If an organization utilizes a direct sales force, but provides no pre-qualification function (e.g. no BDRs), our focus in the marketing plan will be more on quality than quantity. This is true because we know that in most B2B scenarios, somewhere between 10 and 15 percent of all inquiries will pass the qualification filter. This means that sales reps will talk to 8.5 to 9 suspects before reaching one qualified prospect. This imbalance leads to two negative consequences. First, the reps fail to call all the suspects, finding reasons to disqualify them before making the calls. Second, reps get busy chasing their hot prospects and neglect to make the qualification calls in a timely manner. At some point, slow follow-up is almost as bad as no follow-up. If you want to see the impact of slow lead response, read my blog post on this subject.

In this type of sales model, we purposefully back off the quantity goal and align our marketing plan to deliver leads that are more qualified. Reps that discover that one out of every three or four suspects are qualified. They are then more likely to make the qualification calls and optimize their time. One of the easiest ways to produce quality is to require suspects to provide more data about themselves on the web form, thus pre-qualifying themselves. Each additional piece of data you ask for will reduce the number of responses, but will also drive up average lead quality.

These are just two sales model examples. When you include hybrids, there are dozens of possibilities. And every sales model will require a marketing plan that is tightly aligned. If you have a gap between sales and marketing, it’s best to address this quickly, especially by creating a service level agreement between the two departments. You can read more about Bridging the Gap here.

B2B Marketing Actions You Can Take Now to Have a Better 2013

For most people, the end of the year means enjoying holiday celebrations, taking time off work, and making sure tax items are in order before Dec. 31. For B2B marketers, the last weeks and months of the year can also mean opportunity.

Ending the year successfully—and gaining solid footing for 2013—starts with asking the right questions. Instead of waiting until late December, ask yourself these six essential questions to optimize your action plan:

1.  How does the holiday season affect your product or service? Generating leads is a priority all year long, but depending upon your product or service, will you be ramping up or slowing down your efforts in November and December?

2.  Where are your decision makers at this time of year? Is it business as usual or are they out of the office or focused on other things? The end of the year is often a time for holiday travel, but this time of year can be a great opportunity to reach some decision makers in the office.

3.  What relationship building activities can you create? Holiday greeting cards can keep you connected to customers in winter, but what are you doing the rest of the year? Are you responsive to clients and prospects? Are you hearing their real needs?

4.  What went wrong—and right—in 2012? Assess your traditional and social media efforts in the past year. Evaluate your push and pull marketing campaigns as well as your social media statistics, posts and rankings. Are there new social media tools you can use (e.g. Google+ or Pinterest) or can you better leverage your existing tools?

5.  How are you planning for success in 2013? What are your objectives for each of your products or services next year in terms of generating awareness, leads and revenue? Review your goals and budget. Reevaluate your strategies and tweak your marketing mix for greater effectiveness. Create a plan now and refine it prior to January 1.

6.  Is your marketing and sales model fully optimized?  First ask the big question: Is the sales model your company is using the most effective at generating the most revenue at the least cost, or are you simply following the established path?  It may be time to look at a new sales model, perhaps incorporating channel, phone sales or the web.  And even if you are convinced that you have the best sales model, it can probably be streamlined.  Better to address the sales model now, instead of waiting until you are under pressure to produce results in Q1.

I hope you find these six tips helpful. By reviewing your marketing results and planning ahead to optimize your strategies, you can be well on your way to success while your competitors are still recovering from too much eggnog.

How to Build Company Value in a Down Economy

Building Company ValueWhile the political battle rages over whose fault it is that the economy seems to be perpetually stuck in the doldrums, entrepreneurs and established businesses alike are faced with the task of keeping their businesses moving in a forward direction. The macro economy is what it is, and most of us have little impact on this. But we do have a great deal of control over our micro economy – the part of the whole where we can make an immediate difference for our companies, our clients, and our families.

By “building company value” I mean that your founders, shareholders, employees, partners and customers all receive what is most important to them in terms of:

  • Growing revenues and profits
  • Increasing stock prices
  • Pride of associating with a winning company
  • Job satisfaction and promotion opportunities

So how do you go about increasing company value at a time when economic circumstances are tough and there’s fierce competition for every dollar? Here are three suggestions on how to use marketing and sales strategies to build value in your company. We’ll cover three more in next week’s post:

  1. Set Audacious Goals– We encourage our clients to think big and aim for large objectives. Setting lofty goals forces you to think outside the box, and this is important because it is difficult to make big gains with the same mindset you used to achieve only modest gains. It’s the simple but powerful realization that you’re not bound today to what you thought was possible yesterday.Plus, simply by aiming high, you give yourself a better chance of accelerating progress. Here are some examples of audacious goals for your consideration:
    • Double the sales team’s quota
    • Triple the number of inbound sales leads
    • Cut the cost of new customer acquisition by 50 percent
    • Increase your web traffic by 250 percent
    • Two or more of the above
  2. Differentiate – Most successful companies are highly differentiated. They have a value proposition and brand promise that is both unique and compelling. This allows such companies to charge premium fees and operate in a less competitive environment. Competition is a major drag on pricing, so the idea is to offer a specialized product or service offering, not a commodity. In other words, be different and charge more or be the same and charge less.
  3. Challenge your sales model– This strategy can be a game changer. You should take a close look at your sales model and ask some tough questions:
    • Is my cost of sales higher than it needs to be?
    • Can I create a two- or three-tier model to add additional revenue?
    • Can I add a recurring revenue model to my existing sales strategy?
    • Should I replace all or part of my direct sales model with a channel strategy?
    • Are there low-cost ways of reaching a larger audience?
    • Is my pricing strategy leaving revenue on the table

Naturally, much of this is easier said than done. But the ability to stop from time to time and take a hard look at the ways you can improve your business and increase company value is one of the things that separates thriving businesses from those that operate beneath their potential. This potential extends beyond mere market share: It is the ability to inspire everyone around you — your clients, your leadership team, your investors and employees — with a realizable vision of prosperity and personal fulfillment. That’s truly powerful.

Note: this post is excerpted from Christopher Ryan’s article that originally appeared in ColoradoBiz Magazine.