Month: December 2015

GIGO: Did We Lose on Price Again?

Loss Reason

Steve Silver, a Research Assistant at Sirius Decisions, recently blogged about a client where the overwhelming reason for losing deals was price.  But the client had a differentiated service where price should not have been the primary factor.

Silver discovered the reasons for this anomaly:  The field was not used by any departments at the firm.  Without an owner, the path of least resistance was selected — the first choice in the picklist.  And in the case of the client, 90% of the losses were flagged as price-based.

Did we establish value?

Silver omitted a third reason, and one which is common amongst sales reps.  Price is an easy scapegoat for lost opportunities.  But if your service is well differentiated and you focus on your value proposition, price should not be the primary loss driver.  Yes, some deals will be lost because a competitor low balls the deal (a true price loss), or the prospect simply does not have the financial means to purchase your service (a poorly qualified prospect), but in most cases, losing on price is a failure on the part of sales reps.  If they thought about it more, they would realize that price is not an exogenous variable outside of their control.  That’s because price is tied to value.  Price is the critical variable if your value has not been established.

This isn’t to say that pricing could be wrong.  If your competitors are quickly moving up the value curve, your historical price may no longer be sustainable as you become less well differentiated.  With good data and analytics, you would capture this shift in the competitive marketplace and act accordingly (e.g. R&D to better differentiate your service, better product bundling, or reduced prices), but price should only dominate the loss reasons in a commodity business.

GIGO

So what else could be gleaned from this situation?  First, somebody needs to own data quality within the CRM.  If a field is viewed as busywork, your sales reps will populate it with junk data.

Garbage in, Garbage out.

Managers should also be pushing back on reps to better understand why deals were lost so that mistakes can be avoided in the future.  Does the sales rep need additional training or coaching?  Are additional sales tools needed for competitor handling or establishing value?  Are we poorly qualifying opportunities or failing to identify the key decision makers?

Yes, it is easier to move onto the next deal without taking the time to analyze deal losses; but a learning organization needs to understand its failure points.

Sales Operations

Sales Operations should be cross-checking fields.  If the loss reason is price or features, then a competitor had a better offering.  Was the primary competitor recorded in the CRM?  If the competitor is blank, then additional explanation should be required.  Did you really lose on price or features if you don’t know who the competitor was?

Or did you lose to no decision or the incumbent because there was insufficient value established to warrant funding the purchase or sustaining the switching costs?

If you don’t collect the data or you allow a field to be treated as busywork, it won’t be available for analysis.  I have had several instances where my clients did not record the loss reason or the competitors.  I have also had others where the fields were usually blank.  In short, the firms were operating in a competitive fog and not using their CRM for market monitoring.

In the end, it is important to not only gather win/loss information, but to use the data for sales training and coaching, marketing communications, sales enablement, and product development.  When information is valued by the organization, then sales reps are less likely to blithely skip fields or enter the first field in the required picklist.

LinkedIn: Biased Research Doesn’t Help You Sell

“There are three kinds of lies: lies, damned lies, and statistics.”
  – Mark Twain (and others)

Sometimes you see a statistic reported by a firm and you just want to scream BS. When I read LinkedIn’s claims about revenue and pipeline lift, I did just that (OK, I didn’t scream it, but I muttered it under my breath).

Here is the claim published in their Sales Solutions Blog back in April, “While social selling by itself is positively associated with sales performance (both pipeline size and revenue growth), the study found that Sales Navigator users achieve 7x more pipeline growth and 11x more revenue growth than if they used LinkedIn.com only.”

LI SN PipeLine and Revenue Growth
LinkedIn claims a huge lift from Sales Navigator, but it is based upon an implied pipeline lift of only 1% from their freemium offering.

Unpacking the numbers, LinkedIn usage provides only a 0.99% pipeline growth but Sales Navigator provides a 6.8% growth rate. Respective revenue growth numbers are 1.7% vs. 20.4%.

I see two problems with these numbers. First, the LinkedIn standalone service provides more lift than indicated in the study. Why would sales reps be spending so many hours using the service if it provided so little benefit? Certainly other products would increase their productivity by more than one or two percent. If so, reps would be investing time using those tools for research, not LinkedIn.

Second, there is likely to be a significant selection bias. Companies that have had success with solution selling processes around LinkedIn are more likely to adopt Sales Navigator. These firms were likely to license Sales Navigator and their sales reps were more likely to incorporate Sales Navigator into their Solution Selling processes. Furthermore, rapidly growing companies are more likely to invest in new processes and techniques than older, slower growing firms.

So if you are going to blog on a study, particularly one you commissioned, make sure it has face validity.

By the way, Mark Twain did not originate the “lies, damn lies, and statistics” phrase (nor did he claim to), but it perfectly encapsulated this research.

First Research: Plain English Industry Primers

FR

I’ve long respected the First Research industry overviews assembled by Dun & Bradstreet.  While most industry research runs from complex to arcane, First Research reports serve as industry primers providing plain English overviews of an industry.  If you were to read the report for your own industry, you would probably find it useful only for new hire training.

And that is the beauty of the reports.  They are for novices lacking an understanding of an industry which makes them perfect for territory sales reps or relationship managers.  In fact, they were originally designed for relationship managers at banks before First Research realized that sales reps were equally in need of their research.  If your job requires you to interact with individuals across many industries, then First Research may be the perfect resource for “getting up to speed” on an industry.  They can also be valuable for job hunters looking for a basic set of questions to ask about an industry.

Content includes an Industry Overview containing the following sub-sections:

  • Competitive Landscape
  • Products & Operations
  • Technology
  • Sales & Marketing
  • Finance & Working Capital
  • Regulation
  • International Insights
  • Regional Highlights
  • Human Resources

along with these additional sections:

  • News and Social (FirstRain)
  • Quarterly Industry Update
  • Industry Forecast
  • Industry Growth Rating (High, medium or low)
  • Industry Indicators
  • Company Information
  • Critical Issues
  • Business Challenges
  • Business Trends
  • Industry Opportunities
  • Executive Insights and Questions
  • Financial Information
  • Call Prep Questions ƒ Websites & Acronyms

First Research contains several sections of Q&A content including Call Prep Questions and Executive Insights which are questions specific to C-level executives.  Sometimes in life, you need to “fake it until you make it” (i.e. develop expertise) and First Research is designed for this purpose.

Through an OEM deal with FirstRain, high-precision industry news is included in the service along with FirstRain topic tagging and visual tools.  FirstRain content includes Latest News, Top Business Tweets, Management Changes, Event Timeline, Industry Health Indicators, Analyst Commentary, and Recent Transactions.  FirstRain does not archive this content but provides six months of open web news links.

FR News
FirstRain industry news is OEM’d within First Research reports providing six months of news, business tweets, an event timeline, analyst commentary, health indicators, transactions, and management changes.

First Research covers over 500 US and 35 Canadian industries spanning 1,000 NAICS codes.  While the reports are US-centric, they have recently begun adding international sections to the reports.  As a bonus, the product includes regional reports for US states, the District of Colombia, and Canadian provinces.  Country briefs are also available.

Other tools include a set of sales and marketing templates providing examples of how to use First Research content in various scenarios and an industry prospector tool for assisting with market development planning.

First Research reports are available as a standalone offering or integrated into the Hoover’s database, D&B360 CRM connectors, and the D&B Direct API.  A subset of the content is also being delivered via Data.com.  For library patrons, Dun & Bradstreet has partnered with Mergent to deliver the reports as a standalone offering or integrated into some of their products such as Mergent Intellect.

First Research should be viewed as industry insights for non-experts.  You won’t find depth on key trends or issues, but the service is easily accessible and walks the user through industry basics.  You generally don’t find industry news or Q&A sections in other industry services.

If you are looking for more advanced cross-industry research, you can step up to

  • MarketLine (global and regional research)
  • Euromonitor (global and regional research)
  • IBISWorld (US, Australian, Chinese, and global research)
  • Freedonia (US)
  • BMI (emerging markets)
  • EMD (emerging markets).

These services provide more complex reports while retaining readability.  While you won’t find as much handholding (e.g. Q&A sections), you will find broader industry trend and forecast content along with profiles of the top three or four competitors in the market.  As many are globally focused, they may be better sources for international market entry decisions.

You can find a full review of First Research at FreePint (Note: I am a contributor to FreePint, but the review was written by a different author)

Predictions Become Predictive (It’s Prediction Season)

I generally avoid playing in the prognostications game.  After all, it is difficult enough to understand what happened over the past year without projecting it forward or relying on simple extrapolation.  Nevertheless, nothing prevents me from relaying a few of the more interesting sales and marketing related technology predictions during the Predictions Season (and you thought it was the holiday season!).

I will begin with James Cooke and others at Nucleus Research who wrote:

We’ve all heard “data science” creep into the CRM conversation over the past few quarters, but mostly as it relates to marketing. Although marketing was the first area to get predictive, the future for all three pillars (sales, marketing, and service) of CRM is predictive – taking advantage of the intelligence of the software to look forward, not just track progress. Some of the most interesting opportunities are in customer service, where better data about customer’s habits and the products and services they use can be used to proactively support them (think predictive maintenance of automobiles, for example). The concerns about customer data are less prevalent on the service front than in sales and marketing because they tend to opt in. The challenge for companies will be in addressing the human barriers to adopting process changes driven by more predictive and proactive CRM.

While I agree that marketing has taken the lead on predictive analytics with a focus on lead decisioning (e.g. scoring; nurturing vs. promoting to sales; customizing campaigns at the lead level based on behavioral, firmographic, and biographic forecasting) and best customer cloning (determining the “ideal customer” and providing similar leads), predictive has helped close the gap between sales and marketing.

For example, predictive scoring allows marketing to limit promotion to the top N percent of leads, resulting in much better set of Marketing Qualified Leads (MQL) being sent to sales.  While fewer leads are being distributed over the Sales/Marketing Wall, they are of a much higher quality.  Furthermore, because the leads are scored and the predictive companies are beginning to provide insights around those scores, sales can begin to develop confidence in the MQLs passed to them.  The funnel attrition rate from marketing qualified leads to sales qualified leads should decline sharply.  This is a point made by Lattice Engines and reinforced by today’s strategic partnership announcement between Infer and InsightSquared.

Infer-InsightSquared-Activity-Scorecard
The Infer Activity Scorecard within InsightSquared stratifies leads by Infer score. The tool answers the question, “How are different quality leads getting worked?”

You also will hear fewer arguments between the parties about lead quality.  Marketing has long complained that sales ignored their leads while sales complained that marketing sent too many junk leads resulting in sales quickly cherry picking the lists.  Predictive tools should help eliminate this infighting by emphasizing lead quality over volume while providing insight into which leads are dormant.

Infer-InsightSquared-Lead-Aging
The Infer Lead Aging report within InsightSquared helps answer the question “Are our best leads getting overlooked?” According to Infer, “this report lets leadership quickly zoom in on high quality leads and ensure that no good lead gets left behind.

Likewise, nothing prevents sales reps and sales ops from playing the cloning game and identifying similar companies of their own.  Historically, this was done via peer searching where reps took a single customer and found companies of a similar size in the same industry.  Ideal Profiles allow for a similar process, but one based upon the attributes of a group of customers.  These profiles are much more sophisticated in that they build their models from many customers instead of a single profile and utilize potentially thousands of business signals to determine the ideal profile.  Furthermore, many of the business signals may have been previously unknown because they were not available.

We are also seeing sales acceleration tools that

  • Make sure that customer questions and requests aren’t ignored.
  • Provide updated profiles and alerts to reps prior to meetings.
  • Warn service departments of pending customer sales calls so that the problem is given a higher priority.
  • Deliver messaging advice to reps around what to say and which products to lead with.

Thus, predictive analytics and machine learning are becoming more proactive and prescriptive.  The next few years are likely to transform marketing, sales, and customer support.

Rube Goldberg Sales Processes

RubeGoldberg

Rube Goldberg understood that if there was a way to make a process more complicated, then so much the better.  But his machines of whimsy were designed for humor, not business processes.  Oftentimes, we are our own worst enemies in sales, creating obstacles instead of efficiencies and checks instead of common sense rules covering the most frequent scenarios.

In a recent blog post titled “Sales Acceleration is an Inside Job,” Barb Giamanco discussed the problem of sales acceleration and the inability of sales reps to respond quickly to requests.  While it should be intuitive that speed is a differentiator, it may well be that the opposite holds true; the lack of speed and the inability to quickly answer questions, respond to web forms, or provide a price quote all speak poorly to company knowledge sharing and customer support.  We are building leaks into our sales funnel by providing reasons for prospects to look elsewhere.

For sales reps, deals can be very much like the military — HURRY UP AND WAIT.  But unlike the military where there is a singular mission directed from above, sales reps are managing dozens of opportunities simultaneously.  Furthermore, information needs to be gathered from both electronic stores and co-workers.  Is it no wonder that response rates may lag?

Giamanco notes that the primary role of sales reps isn’t selling but facilitating the purchase decision:

Selling is about helping customers solve their business problems and make buying decisions. I want you to think about delivering value in a different way. Think of adding value as providing information quickly, in order to move buyers one step closer to a purchasing decision. If a core issue has been identified within an organization that needs to be addressed, there is executive support for the initiative, budget has been allocated and an implementation timeline has been put in place, then buyers typically do want to move quickly. Make it easy for them to get what they need.

This is one of the reasons that I have been expanding my Market Insights newsletter to cover Sales Acceleration tools such as QuotaFactory and SalesforceIQ.  These tools help prevent opportunities from falling between the cracks.  For example, SalesforceIQ provides actions based upon inbound email requests to ensure that sales reps don’t miss customer queries.

A study by InsideSales found that $12.8 billion was spent on sales acceleration products in 2013 with a forecast of $30 billion by 2017.  Giamanco argues, however, that the fundamental problem of purchase facilitation is not being addressed.

You never want to be the critical path step in closing a deal.  Prospects may take their time mulling over their decision, obtaining budget, reviewing contracts, and obtaining signatures, but there is no reason that a vendor should be adding to these lags.  A simple poll of your sales reps will indicate where the biggest process lags are on your side.  The question should also be posed during win/loss analysis research.

Which of the following leaks do you have in your sales funnel?

  • Are inbound leads (web form, telephonic, social) quickly passed to your sales reps?
  • Do you automatically match and enrich leads within your marketing automation or CRM platforms to assist with lead routing and qualification?
  • Are you providing sales intelligence around the lead so that sales reps have a baseline understanding of the prospect, potential pains, and which products or services are most likely to be of use?
  • Have you setup and maintained an easily discoverable sales enablement library with both internal (sales playbooks, competitor profiles) and external (e.g. case studies, collateral, recorded short demos) tools?  Are these tools properly tagged by industry, stage, job function, and content type to facilitate discovery?  Are these tools current from both a marketing (e.g. branding, positioning, terminology, use cases) and product (capabilities, benefits, requirements) perspective?
  • Is there a method for identifying subject matter experts in the organization and a way to quickly reach out to them (e.g. Chatter or Yammer)?
  • How quickly do you turn around trial requests (it should be within a few hours) or samples?
  • Are sales reps able to setup a demo on the fly?  Are they sufficiently confident to demo your service on their own?
  • Do sales reps know if a client has open issues in the customer service department?
  • Does the customer service department know that the sales rep has a pending meeting with a customer so that they can prioritize problem resolution?
  • Are there tools in place to
    • Ensure that customer checkpoint calls are held
    • Flag inbound information requests so that requests do not fall between the cracks
    • Identify customers with atypical usage patterns (e.g. high volume which could result in significant overages, volume drops from historic averages, low usage)?
  • Can you quickly turn around quotes, RFPs, RFIs, contracts?

Moving opportunities through the sales and marketing pipeline is a complex process with many potential points of failure.  Identify the problems posing the greatest threat to deal closure in 2016 and then move to remediate them.  Some solutions require simple process changes (e.g. can we offer greater discounting authority to sales reps?) while others may require additional training or new systems.

The public domain photo is from the 18th annual (2013) Rube Goldberg contest held at the Argonne National Laboratory (Department of Energy).  The challenge was to hammer a nail.

Eliciting Objections

Quote

In a blog, Sales Consultant Tanja Parsley recommends eliciting objections from your prospects. Parsley argues that “objections are not barriers or obstacles – they are clues to understanding client needs.”

While this seems counterintuitive, it makes a lot of sense. Your customers and prospects have concerns. Pretending that they don’t is simply wishful thinking.

Parsley recommends the following phrasing for eliciting objections:

“If there was one thing that might get in the way of moving forward with us what might that be?”

Her wording is positive and contains the assumption that you will be closing the deal (“moving forward with us”). Furthermore, it asks for the primary objection, not a list of minor nits. This phrasing allows you to focus on their top concern instead of giving them a reason to dump on your product or service.

So what are the benefits of eliciting objections?

  • It provides you with an opportunity to address their main concern. It may be that the concern is an area you’ve failed to address during your previous meetings. In that case, you can work to ameliorate their concerns.
  • It highlights a potential pain that your firm may be in a position to address. Perhaps they need strong SLA wording or additional support services. Maybe they are concerned about a gap in your product features that will be resolved in the coming months. Unless you know about their concerns, you can’t address them.
  • The concern may be a landmine left by one of your competitors. Based on the wording, it could give you a clue about an unknown competitor or provide you with the opportunity to leave behind a few of your own traps. Keep in mind that you can only defuse the landmines that you spot.
  • You come across as forthright and willing to solicit uncomfortable questions. This puts you in a stronger position for addressing the concern as you are not caught off guard at an inopportune moment.
  • It provides you with a more realistic assessment of the probability of closing or potential delays in the decision making process. Your pipeline forecasts will be more accurate and you won’t be caught with egg on your face when your 80% probability of closing opportunity is won by your competition. It also provides an early warning of potential signing delays.

So, given all of these benefits, why wouldn’t you ask about objections? I think it comes down to simple human nature. Asking about objections makes us vulnerable. But it is through honest discussions that we gain the most.

Radius: Performance Dashboard Released

Rad1

Predictive analytics company Radius recently released a new analytics dashboard called Performance.  The dashboard utilizes data from Salesforce and the Radius Intelligence Cloud to provide multi-point goal analysis across the sales funnel along with segmentation tools.

Radius collects firmographic and signal data via open web crawling and filings from the Secretaries of State.  The database spans eighteen million U.S. companies and fifty billion data points.

While Radius began as an SMB-focused sales intelligence service, they shifted to predictive analytics over the past two years.  The firm has very strong VC backing after receiving $125 million in VC money, giving it a valuation between $500 million and $1 billion.

Performance synchs with Salesforce.com every thirty minutes to provide near real-time metrics on campaign performance and top segments.  Along with the number of total leads and wins, the system evaluates the average number of touches and the average days to conversion.  The additional details allow sales and marketing to better understand individual segments and the effort required to move prospects within each segment to the next stage.A running history is also available which can be filtered by period or segments.

Rad2
Net New Conversions Running History

Users can drill down on specific segments or filter the data to hone in on their best opportunities.

Each lead is bucketed into one of four categories:

  • New: Net New leads in Radius
  • Open: In the CRM but not yet won or lost
  • Won: Goal Met (e.g. MQL to SQL conversion, account won)
  • Lost: Goal Not Met

Win rates are defined as

Win Rate = Win / (Win + Lost)

and shown dynamically as users drill down or filter within the dashboard.  When filtered, the system automatically recalculates all of the rates.  Filters can be any of their business signals including location, size, social media presence, web technology deployed, and chains (e.g. multi-location businesses or franchises).

Once strong segments are identified, marketers can upload additional contacts or leads to Salesforce or download them to a CSV file.

Performance helps marketers identify top performing segments, evaluate the effort involved in converting opportunities, comparing sales cycles across markets, and measuring the ROI on net-new records and campaigns.

Radius also rolled out a second feature called Multiple Goals which allows users to define multiple objectives.  For example, goals could be related to specific stages in the funnel or could be defined for different product lines or channels.  Multiple Goals are then available for analysis within the Performance Dashboard and defined using Salesforce variables.

Rad3
Multiple Goals are defined using Salesforce.com variables allowing sales and marketing to focus on different stages of the funnel, market segments, or product lines.

Multiple goals allow marketing to view success via “different lenses,” support both sales and marketing objectives, optimize campaigns around different segments and objectives, and identify opportunities for upsell or cross-sell.

“Radius is moving beyond analytics to give clients lists of potential customers,” said analyst David Raab.  “In particular, its finding new market segments that clients might enter – something different from simply scoring leads that clients present to it or even from finding individual prospects that look like current customers. This isn’t a new service for Radius but it’s one that only some of the other predictive modeling vendors provide.”

A few months ago, Radius began offering a free CMO Insights Report to companies willing to open up their Salesforce instance to them for analysis.

Rad4
The CMO Insights Dashboard provides a free Salesforce-based analysis of marketing and sales leads including top segments and business signals.

“CMOs are in need of an easy-to-use tool to gain visibility into their best customers based on historical success. They need to know their total addressable market size, the attributes defining these segments and recommendations on new segments. This instantly available report provides all this information to CMOs within a day of connecting their Salesforce instance to Radius,” said Arup Banerjee, SVP of Product at Radius.

“Companies willing to share their Salesforce CRM data can get a report assessing the quality of their CRM records, listing the top five data elements that identify high-value prospects, and suggesting five market segments they might pursue,” said Raab.  “This is based on combining the CRM data with Radius’ own massive database of information about businesses. It takes zero effort on the marketer’s part and the answer comes back in 24 hours. Needless to say, it’s a great way for Radius to show off its highly automated model building and the extent of its data.”

In the past, I have been a bit sour on Radius, but they have released a pair of analytics tools that should help them get noticed by marketing departments.  I still think they oversell their predictive capabilities as they do not offer lead scoring and their set of business signals is fairly thin, but they are establishing themselves as an easy to use marketing analytics platform.