I had the distinct pleasure of attending a keynote by Earvin “Magic” Johnson at Zoominfo’s Growth Acceleration Summit. As the summit was held in Boston, there were numerous anecdotes about Celtic great Larry Bird and their rivalry, but the key business-related anecdote was that you have to continuously improve. Bird was a great competitor that forced Magic to up his game. They were great rivals that made each other better and raised the quality of the game.
There were also a set of business insights as Johnson has taken his game discipline to business. A few of his tips:
Find underserved markets and tailor your product to those markets — For Magic, the biggest underserved market was the inner cities. He knew that there were few movie theaters in urban America even though the per capita theater spend of African Americans was high. His first theater in LA had the 10th highest gross in the country. He then convinced Starbucks that they should open coffee shops in marginalized inner city communities (and opened the first non-Starbucks owned shops). Magic tailored the music and food to the community (e.g. sweet potato pie) and his stores had a higher gross than Starbucks owned locations. The key to business success is “you have to know your customer.”
Out deliver — It’s not enough in today’s market to meet your customer’s expectations, you need to out deliver. There is no lack of competition. If you want customer retention, you need to out deliver. If you want brand ambassadors, you must out deliver. Magic Sodexho (food service) passed on its first Disney RFP and waited three years before bidding on the Disney Land contract. His firm realized that due to the size of the park, many employees had little time to eat. To support the contract, they developed kiosks and carts to bring food to the staff during their breaks. This example of out delivering helped them win the larger Disney World contract when it came up a few later.
Culture is important — Magic emphasized the value of a winning culture whether helping bring back teamwork to basketball or encouraging principles such as everybody gets onboard, no hidden agendas, and do your job. Furthermore, employees are better motivated if their company has a social mission such as bringing jobs and opportunities to Urban America.
Hire self starters and reward them — Look for young employees that come in early, leave late, and ask a lot of questions. Then give them opportunities to grow with your company. His COO began as a secretary and proved herself at each level. He also emphasized the value of rewarding all employees and not falling into the trap of rewarding only the executives. You can win the big contract, but if you only reward the execs for the victory, then you won’t have a team ready to out deliver.
Not many people have the pleasure of excelling in one field of battle. Magic has had great success in both Basketball (Hall of Fame, 5 NBA Championships, 12 All Star Teams, NCAA championship, Olympic champion) and business.
A few weeks ago, I wrote about enterprise software vendors calling for an American version of GDPR with Microsoft announcing that it was building GDPR into its global product line as its standard privacy protocol.
On the Salesforce earnings call last week, CEO Marc Benioff observed that the software industry has been going through a “crisis of trust for the past six months” related to privacy and data ownership:
“From the European perspective the way they look at data is data belongs to you, it’s your data. Now for us at Salesforce, we understand that. We’ve had that position from the beginning. Our customers’ data belongs to them, it’s their data. I think in some cases, the companies that are start-ups and next generation technologies here in San Francisco, they think that data is theirs. I think the Europeans with GDPR have really flipped the coin, especially in advertising but in another areas saying hey, this data belongs to the consumer or to the customers, you guys have to pivot back to the consumer, you have to pivot back to the customer.”
Benioff once again called for a US privacy law similar to GDPR which provides “guardrails” around trust and safety. “This is going to help our industry,” said Benioff. ”It’s going to provide the ability for the customers to interact with great next generation technologies in a safe way.”
Benioff also warned that when AI technologies are indistinguishable from humans, trust will also be an issue.
One of the new features being shown at Rainmaker 2018 is an integrated meeting scheduler.
Congratulations to SalesLoft on being named the Top Midsize Workplace in Atlanta. The sales enablement firm added 120 employees over the past year to 220 headcount. SalesLoft is looking to add another 150 employees in 2018.
“SalesLoft’s core values are like motivational mantras: Team over self, bias towards action, focus on results, put customers first and glass half full.
Atlanta Journal Constitution
CEO Kyle Porter has long stressed the value of transparency at SalesLoft with Sunday evening company-wide emails and Friday all-hands meetings where staff are encouraged to ask any question.
“What I’ve constantly heard is just massive amounts of appreciation for being kept in the loop,” he said.
The firm also emphasizes recognition, cross-team interactions, career development, and teamwork. Chessboards in the lobby foster friendly competition. “It shows that salespeople can have a scientific mind and that engineers can have a relational mind, and that’s really the exact thing that we do for our customers, is we bring the science and relationships together,” said Porter.
SalesLoft is holding its annual Rainmaker conference in Atlanta this week.
Black & Decker Cordless Drill (Source: Wikimedia Commons)
Sales and marketing often forget to focus on the unique value proposition they offer their customers. They focus on product features instead of customer benefits. There is an oft-repeated saying in marketing which captures this logic perfectly:
“People don’t buy quarter inch drills, they buy quarter inch holes.”
The electric drill was first developed by Black and Decker and patented in 1917 as a tool for their own production facility. Interestingly, the firm only recognized the value of the tool for consumers when employees began taking it home. Ironically, the tool often used to discuss the value of thinking broadly about use cases and customer needs was originally designed for a limited purpose, the Black and Decker plant, became an indispensable DIY consumer and industrial product.
A product/technology focus emphasizes the features of the drill and not the benefits of quickly making holes of specific sizes as needed, where needed. Marketers need to translate many product features to a distinct set of customer benefits and roll them into a unique value proposition that differentiates their product in the mind of potential customers.
Understanding the needs of the customers is also important for the product and engineering teams. Otherwise, they will view both the competition and the market too narrowly. If you are selling quarter inch drills, you view your competitors as quarter inch drill manufacturers. If you view your product as on demand tools for boring holes and attaching objects, you recognize a broader set of competitive and complementary products including bores, glues, solder, welding supplies, nails, screws, bolts, etc. You would also recognize that electromechanical torque can be applied to screws, bolts, and nuts, expanding your product line into adjacent markets.
Focusing on product features is also a bad practice for sales reps. As with marketing, emphasizing features prevents them from communicating the unique value proposition of your products and services. If your sales reps are too often complaining about losing on price or the need to constantly discount off list price, then either your prices are too high or your sales reps are engaged in too much feature-speak and failing to communicate customer benefits and value. Of course, these reasons are not mutually exclusive. You could have two root causes to your pricing difficulties – your prices may be too high and your sales reps may be failing to communicate value.
Another problem with focusing on features is it treats your product as little more than a commodity. A differentiated service is less subject to price erosion and heavy discounting. This is one reason I tell my clients in the sales intelligence space not to compete on database size. While there are benefits to larger databases, users aren’t usually purchasing big databases [feature], they are purchasing sales insights [value proposition] that make them more effective at building prospecting lists [benefit 1], qualifying leads [benefit 2], managing accounts [benefit 3], reducing CRM data entry [benefit 4], improving analytics [5], and selling deeper into organizations [benefit 6]. Thus, it isn’t the size of the company and executive files, but the breadth of data insights that help reps more efficiently and effectively sell.
So as you hold your 2018 sales kickoffs, make sure to communicate your new product’s value proposition to your salesforce. Likewise, evangelize your company’s vision during new hire training, product road mapping sessions, and all hands meetings. In the end, customers are interested in your value and how you benefit them, not RPM or database size.
Todd Berkowitz, Research Vice President at Gartner, sees Account Based Marketing (ABM) as increasing tensions between sales and marketing in the short-term. While ABM has long been advocated as a facilitator of departmental alignment, he sees ABM as disrupting sales processes and generating friction:
“Between ABM and adoption of various new technologies and data types, there is a lot of disruption that is happening with regards to sales teams. Even if these changes are going to be beneficial to tech companies in the medium-term, and some of the “A sellers” get on board quickly with the changes, there are many sales reps that will have to be dragged kicking and screaming into the new world. (This is why I always advise trying an ABM pilot with a select set of reps). So even if there is pretty good alignment and agreement between CMOs and sales leaders, don’t expect all reps to magically do what they are being asked to do. There needs to be an adjustment period, along with good sales enablement, before everyone plays nicely.”
So, while ABM will facilitate agreements in process, messaging, and metrics in the medium-term, it will generate resistance amongst sales reps unwilling to adopt new processes and tools or unconvinced of its value. This friction is probably exacerbated by predictions of sales force reductions due to the implementation of AI and other information and workflow technologies.
WWII Era Poster (U.S. National Archives and Records Administration)
Resistance to technological change has long been an issue. Early in the Industrial Revolution, The Luddites sabotaged British plants, particularly cotton and wool mills. While sales reps are unlikely to sabotage initiatives (or their careers), they may hesitate to learn new platforms or adopt new processes. As such, the problem may be more akin to soldiering, the assembly line equivalent of reducing individual productivity to the level of the laggards on the line. Frederick Taylor, the father of time and motion studies, was very concerned about soldiering and recommended piece work rates to create productivity incentives. But sales reps are very attuned to incentives. While they may be hesitant to adopt new technologies, they will do so if they help make them more efficient and effective at selling. So long as sales reps are paid on a commission basis and long-term employment is tied to making quota, the level of soldiering should be minimal.
This isn’t to say that sales reps won’t resist learning new tools. If they believe the time invested in such training is less than the incremental revenue for the lost selling time spent in training, then they will avoid training and learning new tools. However, if they see others on their team benefiting from the new tools, they will not hold out long term. Thus, tool training needs to be visibly supported by management with an emphasis upon the benefits to sales reps (e.g. less time spent on non-sales tasks and more time interacting with customers and prospects, improved account intelligence, improved account targeting and message timing). With the proper incentives and information, resistance should be minimal.
To help ensure adoption, vendors should be looking to integrate solutions into CRMs, email, and mobile devices so that new tools are integrated into current workflows. They should also be providing inline tool tips, initial training focused on their capabilities which provide high levels of efficiency and efficacy improvements, tool-based win stories, and usage tools for tracking training, usage, and ROI. A few gamification elements may also be in order, but they should be organic to the product and not hokey.
Searches for Digital Transformation on Google (Source: MIT Sloan Management Review)
George Westerman, principal research scientist with the MIT Initiative on the Digital Economy, wrote an excellent article on Digital Transformation titled Your Company Doesn’t Need a Digital Strategy. His key point was that the true value in digital transformation comes from using digital technologies as the fulcrum for transformation not as the objective. When focusing simply on a technology for technology’s sake, the return on investment is much lower.
In the digital world, a strategic focus on digital sends the wrong message. Creating a “digital strategy” can focus the organization in ways that don’t capture the true value of digital transformation. You don’t need a digital strategy. You need a better strategy, enabled by digital.
Westerman cautions that technology doesn’t provide business value in a vacuum, but only when fused with a business strategy that transforms a key aspect of your business such as product delivery (e.g. e-commerce), customer understanding (e.g. analytics), “radically synchronizing operations” (e.g. IoT), changing business models (again IoT), etc. Thus, “technology’s value comes from doing business differently because technology makes it possible.”
For example, sales intelligence isn’t about providing reps with additional contacts or feeding them with business factoids so they sound smooth on calls. It is about transforming sales and marketing processes by infusing relevant, accurate, and timely intelligence into sales and marketing workflows; aligning sales and marketing objectives; prioritizing activities; and making sales reps more efficient and effective at selling.
Westerman offers four strategies for digital transformation:
Get Away from Silo Thinking — Focusing on a technology strategy (e.g. Mobile, Big Data) can be limiting and ends once the technology has been implemented. A technology focus results in incremental improvements, whereas a business transformation strategy employs multiple technologies and management interventions. You begin with the objective and then determine the digital processes and workflows for implementation. “A customer intimacy strategy, for instance, uses mobile along with other digital technologies to constantly increase personalization, engagement, and satisfaction.”
Don’t push the envelope too far, too fast — Overly ambitious strategies may be very risky while more mundane projects may be ignored. Cutting edge technology may not be ready or implementation strategies may not be understood. “Business leaders leave easy money on the table if they ignore incremental steps and pursue risky opportunities that may not be ready to pay off yet.”
Don’t ask your tech leaders to drive transformation alone — This is an old piece of advice, but still relevant. Early CRM projects often failed due to a top down approach that lacked support from sales and support teams. The CTO or CIO needs to work with other C-level and mid-level executives that provide expertise in the industry and function. For example, The CTO cannot transform sales and marketing by fiat, but must work with sales and marketing management for expertise, cooperation, risk mitigation, implementation, and communication.
Build essential leadership capabilities, not just technical ones — Digital transformation isn’t a project but the ongoing development of enterprise capabilities and business value. Digital leaders should “create a transformative vision, engage their people in that vision, and then govern strongly to chart a course across a whole portfolio of digital transformation efforts — some planned and some yet to be discovered.”
Not all problems require expensive cutting edge technology. Many problems are still soluble through low tech solutions, small dollar investments into current platforms, and modified processes. A focus on technology not only brings about silo thinking, but could increase complexity and cost.
I’m reminded of my high school Geometry teacher who said, “there are two ways you can kill a fly. You can use a fly swatter or you can use a bazooka.”
I suspect the bazooka would be a lot more fun, but costlier and riskier.
That being said, there are also great risks in moving slowly or lacking a digital strategy. Forrester highlighted the risks of being a Digital Dinosaur. The author Nigel Fenwick noted that the digital predators are customer obsessed:
While all companies profess to put customers first, it’s clear from the data that executives at digital Predators care more passionately about the customer across multiple dimensions: In every customer metric we measured, these executives rated the importance of the customer higher than peers in transformers and dinosaurs – in short, they are not just customer obsessed, they are really, really customer obsessed.
And consistent with Westerman’s advice, customer obsession is a business objective, not a technology focus. It is this deep understanding of customer needs that both informs the business and technology strategy and creates a defensible technology advantage.
Emissary, a novel concept around account-specific sales coaching from former employees of key accounts, was formally launched this month. The new service, which recently received $10 million in Series A funding, pairs up former enterprise executives, or “emissaries,” with sales reps to provide account guidance. The initial set of emissaries focuses on two verticals: Enterprise Software and Marketing & Advertising.
According to the firm, “By directly connecting clients to former executives who have accumulated invaluable knowledge throughout their careers, Emissary takes over where Google searches, social networks and sales automation software leave off. Over 5,000 experienced business leaders on Emissary provide personalized insights about the organizations they have previously worked – such as what the company culture is, who the key decision makers are and how the company makes buying decisions.”
Emissaries are vetted by the firm to ensure they have the requisite knowledge and experience to guide enterprise sales reps. The firm’s Salesforce synch connector matches sales organizations that “demand their insight” with emissaries holding “tacit knowledge” of organizations. The platform then facilitates communications, much of which is e-mail.
Emissary views itself as a sales acceleration platform, but one that focuses on closing deals instead of generating more leads. Thus, emissaries assist with much of the account intelligence which doesn’t reside online, helping reps understand organizational culture, procurement processes, and key decision makers. This tacit knowledge is often lacking online. Hammer, a former Google Product Executive, noted that even heavily data-driven organizations such as Google often make mistakes because “Often times, we didn’t have access to a piece of knowledge that sat in someone else’s head, and we didn’t know who that person was. I created Emissary because I believed if we faced that problem at Google, that organizations of all sizes must be facing that challenge.”
“At Google I came to realize that we all have valuable, tacit knowledge that was not available online,” said CEO and Founder David Hammer. “With Emissary, we’re using technology to gain access to relationship-driven knowledge from trusted sources that can often make the difference between whether or not you close a deal.”
The Emissary service requires a significant upfront commitment “in the tens of thousands of dollars, with the price depending on each client’s specific needs.” Contracts run six to twelve months and include a set of Emissary engagements.
Emissary recently closed on a $10 million Series A led by Canaan Partners and G20 Ventures. The Manhattan-based firm previously received a $2 million seed round from The New York Times, Google Ventures and Nextview Ventures.
A few weeks ago, Salesforce announced its new Artificial Intelligence (AI) functionality called Einstein. The new features promise to provide improved decision making based upon predictive scores and recommendations to sales, marketing, service, and other functions. Likewise, Microsoft announced yesterday that they have formed a dedicated AI group working on infusing Microsoft products with intelligent capabilities.
However, as AI and Predictive Analytics become key technologies for companies, it is important to remember the old GIGO maxim:
Garbage In, Garbage Out
These tools simply won’t work well if your information is inaccurate, out of date, or incomplete. Best case, bad data results in weak predictions that aren’t trusted. Worst case, they provide a false confidence that wastes resources and misdirects corporate activities.
John Bruno, an analyst at Forrester, described this problem well in a recent blog:
The future analytics-driven sales processes is bright, but the path ahead is not without its challenges. Current and potential Salesforce customers should be mindful that intelligent recommendations require a large volume of quality data. If poor data goes in, poor recommendations will come out. Cleansing data and iterating the fine-tuning of recommendations will be vital to long-term success. Another major hurdle is adoption. Many sellers still lack trust in “intelligent” recommendations. You will need to handhold these sellers until they form trust. This means starting with small recommendations and scaling from there.
The good news is that many of the sales intelligence companies are now offering data hygiene services for lead, contact, and account records. The processing can be performed via CRM or MAP connectors or by uploading files to their cloud services. The vendors match sales and marketing files against their reference datasets and then augment the files with firmographics, biographics, technographics, etc. Matching can be done both in real-time to support both list uploads and web forms and via batch processing to support on going maintenance of corporate data.
While no company and contact database is 100% accurate, they are far more accurate than most marketing automation platforms and CRMs. Furthermore, they have better field fill rates, standardized values (important for segmentation and analytics), and more rapid update cycles.
The predictive analytics companies are also beginning to provide enrichment services.
As part of the update to my Field Guide to Sales Intelligence Vendors, I’m working my way through the product updates of nearly two dozen vendors. In most cases, this information is only available to non-users as press releases and blogs. But one of my profiled companies, SalesLoft, has a better way to communicate to its customers and prospects. Their VP of Product Strategy Sean Kester records a ninety second video for each release which includes a mini-demo and user benefits discussion.
These videos are short and professional with optional closed captioning and a full transcript. Furthermore, the videos are in plain English so that they can be easily understood by end users. You won’t hear the typical tech speak.
And videos that start, “Hey, Guys, Sean here with SalesLoft” help to reinforce the brand and convey a sense of friendliness and ease of use.
Here is a sample transcript:
Hey Guys, Sean here with SalesLoft. We are excited to announce the new SalesLoft platform UI.
Today we’re introducing a new look. You’ll see an updated platform design for SalesLoft. Inspired by the desire to deliver consistency, the new UI represents a simpler interface, standardizing all the pages within the platform.
We made changes to how users interact with the interface:
The simpler design puts more focus on the information that matters without changing how you navigate throughout the platform…
The SalesLoft community has evolved over the past few years, becoming the application of record for the specialized inside sales organization.
The updated UI reflects your feedback, making it easier to quickly execute your tasks in addition to laying a foundation for faster innovation and increased value delivery to you, our users.
Thank you for enabling SalesLoft to continue to serve you. As always, we are excited to hear your feedback!
What’s more, it is clear that they understand that meeting the needs of their customers drives their success.
In a research study titled, “2016 B2B Sales & Marketing Collaboration Study,” Samantha Stone and The Marketing Advisory Network found that the misalignment of sales and marketing objectives remains a key problem for B2B companies. Although this has been a topic of discussion for several years now, misalignment remains a key stumbling block to meeting revenue objectives. Finger pointing between sales and marketing has long been a blogging meme.
When asked about whether marketing co-workers were doing a “superb job of supporting sales efforts,” sixty percent of marketers agreed while only twenty percent of sales executives agreed.
Other signs of disconnection between the two parties:
Only twenty percent of marketers believe that there is a 95% follow up on marketing generated leads while only half of sales executives believe a 95% follow up rate is maintained within their department. Overall, 57% of respondents believe that no more than 85% of marketing leads are acted upon by sales.
Marketers have little confidence that sales reps are using the tools they develop for sales. While only 15% of marketers believe their tools are broadly adopted (“virtually 100%”), over half of sales reps believe the tools are being fully deployed.
While fewer than twenty percent of marketers believe that sales is rewarded for supporting marketing objectives, 55% of sales teams believe their rewards are aligned with marketing.
Firms that did not share key performance indicators between sales and marketing were half as likely to exceed revenue targets.
Marketing ownership of pipeline acceleration is critical to meeting revenue targets. “Organizations that exceeded revenue goals in the last 12 months are 3X as likely as those that miss revenue goals for marketing to “own” pipeline acceleration (not just lead generation),” said Stone.
“It’s common sense that organizations that rally together around shared goals will drive more efficiency than those where different functions are at odds with each other. Yet, most sales and marketing teams struggle with achieving this ideal. That’s almost terrifying given we know fully integrated companies are more profitable, drive faster growth and make happier customers,” said Stone. “Sales and marketing leaders are smart, yet almost every organization I walk into has some level of unhealthy tension between the two groups. It doesn’t seem to matter the size of the company, the industry they serve or how fast they are growing. In fact, it’s so common we accept it as inevitable.”
Sales and Marketing SLAs (Source: Marketing Advisory Network)
The study also found that setting Service Level Agreements (SLAs) between sales and marketing are highly correlated with revenue performance. Firms that took simple steps such as defining lead scoring criteria and lead follow up timeframes were much more likely to exceed goals than fail to do so. Of the six SLA goal categories defined by Stone, five were associated with “exceeded revenue goals” more commonly than missing revenue goals by more than ten percent.
The one goal that was not associated with outperformance, agreeing on the “number of new contacts added to the database by sales,” doesn’t address the mix of marketing and sales generated leads. If we assume that there is an optimal percentage of sales generated leads, then agreeing on a percentage that is significantly above or below the target would be sub-optimal. Absent a way to determine this optimal mix, setting an SLA on sales generated contacts could easily result in too much or too little time spent on contact identification. If the number is too high, then reps are likely to add contacts of little value to the CRM so as to reach numeric targets. A smart SLA would be based upon an analysis of the cost of generating sales contact records against the benefit of adding additional contacts. As such, setting an analytics-free numeric target is no better than having no SLA at all and allowing each rep to determine their optimal contact discovery level.
Teams that perform best, document more service level agreements between sales and marketing than those teams that simply meet or miss revenue goals,” said Stone. “Those that exceed revenue goals even collect data points such as win/loss data in a formalized manner. Perhaps the most simple practice they follow is not only agreeing on lead scoring critical for sales follow up, but on time from lead assignment to follow up. It’s this closed loop accountability that clearly makes a difference.”
Finally, one simple step for improving revenue is for marketing to attend sales meetings. The study found that B2B organizations which outperform on revenue are twice as likely to have marketers attend customer and prospect meetings than firms that fail to meet revenue targets. Furthermore, marketing departments should be surveying the sales team on tools. Stone found that firms “that exceed revenue goals are 3.1X as likely as those that just meet revenue goals to survey buyers when evaluating sales tools and 14X as likely as those that miss revenue goals.”
Tibor Shanto, Principal of Renbor Sales Solutions, calls for improved cooperation between sales and marketing under the leadership of a Chief Revenue Officer:
I have always seen sales and marketing as being on a shared mission and fighting the same battle. Like the military, to succeed, marketing has to provide air cover for the ground troops, namely sales, and this requires complete coordination, planning, execution, and review. This needs to extend from lead generation through all stages of the sale. At each stage, marketing offers up different coverage based on the feedback from sales. And sales needs to be sure to provide that feedback every step of the way or the air cover may miss the mark. While each branch of the military has their command, the overall effort is led by the commander. That’s why I am a fan of companies having a Chief Revenue Officer, rather than a distinct VP Marketing and VP Sales.
It is through a recognition of shared goals subject to shared metrics and feedback loops that firms can obtain improved performance from the two departments that own revenue generation.
As part of the update to my 