Why Are Industrial Companies Missing from Social Media?

industrial companies social mediaThe number of industrial companies that have not embraced social media as a channel for sales and marketing continues to surprise me. Here are three reasons why they should:

Reason #1: Social networks are incredibly popular.

Most of us agree that the job of sales and marketing teams is to be where your buyer is. Literally billions of people are active on social networks on at least a monthly basis. Although the growth of social networks is slowing in some countries, certain areas (like India) are still catching up; eMarketer estimates that 2.33 billion people around the world will be active on social media by 2017.

Reason #2: The buying process frequently begins online, via search engines and social media.

Despite the perception that social media is successful mostly for B2C companies, it’s  undeniable that many B2B customers turn to search engines to shop. Social selling evangelist Jill Rowley has estimated that 37 percent of buyers look for suggestions or feedback on social sites. And ADP Vice President of Inside Sales Strategy and Innovation Liz Gelb O’Conner has reported that 88 percent of B2B buyers use the Internet to do initial research on purchases. If you and your company lack a social media presence, you’re automatically invisible. Meanwhile, if your competitor has a YouTube channel and their best salespeople have active and engaging LinkedIn and Twitter accounts, those are likely the pages your prospect is going to find during an online search related to your product or solution.

Reason #3: Many enterprise companies use social media to build brand awareness, create relationships with prospects and customers, and generate revenue.

Aberdeen Group has reported that sales professionals who use social selling help best-in-class companies achieve a 16 percent gain in year-over-year revenue, four times better than typical companies. Last year, at least one survey found that three quarters of reps using social media exceeded quota 23 percent more often than their peers. In 2009, Dell was one of the first companies to hop on the social bandwagon; the company used promotions via Twitter to generate $6.5 million in sales of PCs, accessories, and software. More recently, ADP has closed deals ranging from $2,500 to more than $1 million via social selling tactics and tools like Google Alerts, LinkedIn Groups, and LinkedIn’s Advanced People Search.

Despite all the evidence pointing to the value of leveraging social media for selling and marketing, many executives at industrial companies still aren’t convinced. The employees at many industrial companies aren’t even allowed to log onto to Twitter, YouTube, or Facebook while they’re at work. I’ve heard the leaders of these companies say things like, “Our buyers want to meet face-to-face. That’s the only way to build relationships in our industry,” or “We don’t need to be on social media to create awareness. Our brand has been around for 50 years. Everyone already knows who we are.”

In my view, this is a huge mistake. Social media is now part of the buying process for everyone. Social a great way to get insight, gain access, and build trust. Any company not investing in social media initiatives is missing out on revenue opportunities, and I believe that gap will only continue to increase over time.

If you want to see how adding social media to your sales and marketing mix would impact your bottom line, check out our Social Media ROI Calculator.

[Photo: Flickr

Test Your Credibility as a Sales or Marketing Professional

Last week we published some thoughts from RainToday editor Michelle Davidson, who offered three great points about what buyers want from sellers and marketers. The very first point she made was that buyers want to deal with knowledgeable sales and marketing teams. As she stated, today’s buyer has no need or patience for a sales pitch. They want answers, analysis, and advice.

Image via freedigitalphotos.net / samuiblue

Image via freedigitalphotos.net / samuiblue

This is a message we are passionate about and feel it cannot be stated often enough: trust in B2B selling and marketing is built on credibility.

In the past, knowledge mostly meant knowing everything about your product or solution (as well as that of your competitor). And credibility was about how you acted — prospects preferred to buy from vendors who were helpful, honest, and delivered on their promises.

Those things still matter, of course. But credibility today now encompasses knowledge of a more sophisticated nature. As I wrote in a blog post last year, I believe buyers now take for it granted that you’ll include a business case as part of your sales pitch or proposal. I believe credible sellers and marketers are those who can answer “yes” to the following questions:

  1. Do you understand your prospect’s business challenges and do you have tools to help you express those business challenges in financial terms?
  2. Do you understand how to highlight business/financial challenges the prospect has but might not be aware of?
  3. Can you demonstrate an awareness of how the prospect’s options (buying from a competitor, doing nothing, or buying from you) compare to one another?
  4. Can you talk about ROI knowledgably with the Chief Financial Officer and/or CEO?

Beyond looking for integrity in all the traditional realms, buyers today trust vendors who can demonstrate this level of business acumen. Today, you must help prospects see their problems, envision solutions, overcome internal objections to investing in your solution, and achieve measurable results. That is how we need to start thinking about credibility as sellers and marketers.

How well do you score on the credibility scale? Share your thoughts in the comments section.

What Do Buyers Want from Sales and Marketing?

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Image via ddpavumba / FreeDigitalPhotos.net

Today’s post is by Michelle Davidson, Editor of RainToday. It appeared originally on RainToday.com’s Rainmaker Blog and is published here with permission.

We know what buyers don’t want from sales and marketing. They don’t want hard sales pitches. They don’t want long presentations that have no value. They don’t want to talk to a salesperson unless it’s on their terms. They don’t want impersonal marketing emails.

What do buyers want? Here’s a look at a few things at the top of their list:

1. Buyers Want Knowledgeable Salespeople

For the most part, buyers are independent and like to self-educate, says Josiane Feigon, author of Smart Sales Manager. They want to conduct their own research, learning about an issue and possible solutions on their own time and in their own manner. They don’t need salespeople or professionals to pitch their services; they need people who can answer their questions, analyze the situation, and offer advice.

Buyers “are desperate for salespeople who are bright, are smart, are intelligent, [and] are doing their homework. They want a virtual relationship or even a social relationship with those types of salespeople,” Feigon says in her podcast interview, “Buyers Don’t Need Traditional Salespeople Anymore.” “So, really the message is salespeople must become a lot smarter, a lot leaner, [and] much more equipped to meet this customer on their terms.”

Andrew Sobel goes further and says buyers want advisors. They want people who will collaborate with them as well as educate them, he writes in his article, “Is the Trusted Advisor Still Trusted?”

That means you must:

  • Be empathetic
  • Put buyers’ needs first (even if it means saying no)
  • Have big-picture thinking so you can see trends and connect them to their business

Advisors “go beyond ‘professional credibility’ and build deep personal trust with their clients. They have great integrity, put their client’s interests first, and are immensely reliable and consistent,” Sobel says.

Such trusted relationships reduce risk, he says. They reduce the risk of misunderstandings, delivery problems, and missed deadlines.

“Clients know this and value it because we live in a world that’s more fraught with risk than ever,” he says.

2. Buyers Want Multimedia Marketing Materials

Buyers’ preferences run the gamut when it comes to marketing materials. Some have fully moved into the online world where they want to see everything on their laptop or mobile device. While others like traditional print marketing, and others respond well to a mix of both.

So, if you think the traditional brochure has gone the way of the dinosaur, you are mistaken. It plays an essential role in a multi-faceted marketing strategy.

A brochure “has staying power and a readability that’s greater than a blog or social media site,” Bruce W. Marcus writes in his article, “Are Printed Brochures Obsolete?” ”And unlike a blog or a website, which can be read only on a computer or mobile device, a brochure can be read anywhere—no Internet connection needed.”

It can’t, however, be the keystone of a total marketing effort, Marcus warns. But when combined with other marketing activities, it can be powerful and offers a “strong overall impression of a firm.”

And when done well, a brochure “can demonstrate a firm’s most valuable asset—its skills and intellectual capital—and serve as a catalog that describe a firm’s capabilities, facilities, expertise, or point of view,” he says.

3. Buyers Want You to Make It Easy for Them to Make a Referral

A pleased buyer is happy to make a referral for you, but you have to make it easy for them to do so. They already have more than enough to do; don’t give them anything more.

That means staying away from questions such as “Do you know anyone who would be a good fit for our business?” or “Who can you introduce us to that would make a good client for us?”

“While those questions seem obvious, they’re useless because they’re too broad,” says Colleen Francis in her article, “A Pragmatic Way to Ask for a Referral.” “Almost always, the response you’ll get is, ‘I don’t know, but let me think about it.’”

Then usually they go back to what they were doing and forget about your request, she says. It isn’t intentional. They just have a lot of things going on, and they don’t have the time or energy for extra work.

“To successfully acquire referrals, you must fundamentally change your requests,” Francis says. “First, do the work for your client. The best thing to do is go to the client equipped with the names of people and their positions or the companies to which you want to be introduced. Then ask for that specific introduction.”

Michelle Davidson RainTodayAs Editor of RainToday, Michelle Davidson oversees all of the articles published on the website and produces the weekly newsletter, the Rainmaker Report. She also produces the site’s weekly podcast series, Marketing & Selling Professional Services, and the site’s webinars. Prior to joining RainToday, she worked for several years as Editor in Chief of various websites at TechTarget; she also worked as a copy editor at magazines and newspapers, as a book project editor, and as a reporter. Contact her at mdavidson@raintoday.com or @michedav.

The Best Time to Reach B2B Buyers (and Other Behavioral Insights)

Today’s post is by Brendan Cournoyer, Director of Content Marketing at Brainshark. It was published originally on the Brainshark blog and is used here with permission.

The expression “time is money” might be a bit of a cliché, but that doesn’t make it any less true for B2Bs – especially when you have the data to prove it.

That’s what the folks at Software Advice uncovered from their recent Online B2B Buyer Behavior Report. The goal of the report, which collected data from over 6 million unique website visitors from 2008 through 2013 (talk about a long-term project!), shows a direct correlation between the time reps wait to contact a converted visitor and the rate at which they successfully qualify that opportunity.

OK, let’s back up a second – what does this mean? First, the report defines a conversion as anyone who submits their contact information via a web form, at which time the visitor becomes a lead. To become a qualification, those leads then need to be contacted by reps (BDRs, lead qualification teams, or in this case, inside sales) via telephone through the use of a needs analysis and the BANT qualification methodology. Basic web marketing stuff, but the data that came out of it is certainly interesting.

The study found that the faster conversions were called, the higher the qualification rates were for those leads. And when I say fast, I mean really fast. One key finding showed that calling a lead within 5 seconds of a conversion increased the chances of qualifying them by 29% compared to waiting just 5 minutes. Wow.

The report also takes the total average qualification rate of all leads and compares it to the rate of those contacted via various intervals of seconds and minutes (the latter results are shown below). As you can see, the comparative rate of qualification went down with each passing minute, just as it did with each passing second.

Qualification Rates at Minute Intervals

So what’s the takeaway? Well, the obvious answer is that the faster your call your web conversions, the better the chances you have to qualify them. That’s pretty straightforward, but there are some other caveats and considerations. For example:

  • Depending on the size of your team, website, etc., contacting visitors only seconds after they convert might not always be practical That said, this is hardly the first study to highlight the impact of “time-to-first-call” in B2B sales. With that in mind, Software Advice’s Derek Singleton recommends businesses “invest in technology and processes that allow you to call buyers as fast as possible.”
  • The data here is based on phone qualifications, but not all web forms require a telephone number, so calling those leads might not always be possible, let alone practical. Of course, that doesn’t mean you can’t still nurture them into a qualified opportunity. In fact…
  • One of the best points the study makes is that not all conversions are created equal, and many are not great candidates for an immediate call anyway. As the report states, “If a buyer completes a form to contact you directly—requesting a price quote, product demo, or a simple request for more information—then you should call right away. If, on the other hand, a buyer contacts you indirectly—by completing a form to download a whitepaper, access video content, or view other gated material—then you should nurture, rather than call, the lead.”

Here are some other interesting takeaways from the Software Advice report:

  • Tuesday thru Thursday is the best time to qualify conversions. The report found that average lead qualification rates were twice as high mid-week.
  • Conversion rates are higher at the beginning of the year. While qualification rates peaked during summer months, most web conversions occurred before spring time.
  • The holidays are NOT a qualification dead zone. While web traffic typically dips in December, conversions and qualifications were “surprisingly active,” according to the report.

Naturally, all of this data is unique to Software Advice and its business model, but the general takeaways are fascinating. For more details, read the full report, and check out the Brainshark Sales Cloud to learn more about using content to advance sales conversations with timely, effective follow up.

Image Credit: Software Advice

 

Fit your Business Case to Sell to Small Companies

During one of my recent client presentations, I got an interesting question: do you still need a business case when selling to smaller companies?

I’ll always be a big proponent of a business case. However, you need to adjust your approach if you’re selling to smaller companies (which I’d define as any company with less than $100 million in annual sales, that lacks a formal hierarchical management structure, and/or is owned by one person or just a few individuals).

We’ve written before about how it’s important for sales professionals to understand some key financial metrics so that they can talk about them intelligently, know how their offering improves their customer’s income statement, and make sure they present the right financial metrics to the CFO. However, a smaller company probably has a less formal and less hierarchical organizational structure. A detailed business case is still a critical component of the selling process, but be aware that the final decision maker may be the company’s founder or a group of family members rather than a CFO.

You also have to be careful about the implications your offering might represent to a small business versus a large business. For example, your solution might enable your prospect to reduce labor costs. However, if the business owner employs his brother-in-law, he may or may not be so interested in investing in a solution that would allow him to lay off a family member.

You still want to talk about how much it’s worth for the prospect to solve his or her business challenge. But you want to be sure you find out about the kind of trade-offs this person is prepared to make. In some cases, the small-business owner might want to allocate funds to buy his kid a new car rather than buying a system that might help his business. In this case, the decision is personal, so you’ll want to talk about the financial benefit in a way that takes those trade-offs into account. For example, you can talk about the payback period and show the owner the amount of time he would have to defer the car purchase if he invested in your solution now and how much he will be better off after the purchase. Another example is that the owner may be looking to make a sizable investment now to reduce his tax liability now in exchange for a longer-term benefit. You’ll have to conduct some discovery to find these trade-offs, but it will be well worth your effort.

This is what we mean when we say that value is specific to each individual customer. And, as we’ve said before, the way you talk about value fluctuates depending on where you are in the sales cycle. When a company lacks a structured management team, think about how you can narrow the scope of your conversation around value. When composing your business case, simplicity is probably better. For example, maybe you will get a better result if you focus less on a complex financial metric such Internal Rate of Return (IRR) and more on payback period, which is a concept that many people already understand.

The bottom line is that you need to realize that the conversation that tends to get traction with a larger customer might not be the same for a smaller business. Know your prospect’s needs, and tailor your business case accordingly.

Do you adjust your sales conversations based on the size of the company you’re selling to? What are the differences you notice? Share your thoughts in the comments section. 

Understanding Your Impact on a Customer’s Income Statement

We’ve said this many times: before you can deliver value, you must first demonstrate to the customer that you understand their business challenges.

Knowing the fundamentals of an income statement can really help you in this regard. Unless you understand its components (maybe not fully, but at least to some extent), your conversations with customers are probably still centered on marketing-speak and you haven’t yet gotten to the level of talking about a true value proposition.

An income statement is simply a financial statement showing how much money the company made during a certain period of time (usually a month, quarter, or year) and what the company’s revenue and costs were. Here is the basic flow of an income statement (sometimes called the P&L):

Sales Revenue

Subtract Cost of Goods Sold (CoGS), which would include things like:

 

  •             Materials
  •             Labor
  •             Other Direct Costs

 

Cost of Goods Sold subtracted from sales revenue tells you your Gross Margin.

Now subtract all of the following expenses (collectively known as SG&A)

 

  • Sales
  • Marketing
  • Research, Development & Engineering (RD&E)
  • General expenses
  • Administrative expenses

 

Once these items are subtracted, you’ll end up with net profit.

If the company is public, an income statement will be published in its quarterly and annual reports (this is by law). The top line of the income statement is how much the company made in sales (revenue). The bottom line is the company’s earnings (profit). For simplicity, we are going to ignore the corporate level concerns like income tax, interest, and other corporate expenses.

Let’s take a closer look at some of these terms.

Cost of goods sold (CoGS). This is simply the direct costs incurred by the company to produce and/or deliver whatever they’ve sold. This amount typically includes the cost of materials and direct labor costs. If your product can lower your customer’s raw material costs or production labor costs, you can impact the CoGS.

Gross margin. Gross margin, also sometimes called gross profit, is simply the company’s sales revenue minus its cost of goods sold. Often the gross margin is expressed as a percentage and calculated as: (sales revenue – CoGS) / sales revenue * 100.

If your offering helps your customers increase sales revenue, the increase in gross margin is how you would quantify the bottom-line impact of increased sales (since your customers gross margin dollars would increase as sales increased). The calculation you should use is simple: increase in sales revenue * (1 – CoGS %) = gross margin dollars.

SG&A. This stands for Sales, General, and Administrative. These are costs the company incurs as part of doing business and is otherwise known as “overhead.” Things like telecommunications charges, IT, office rent, and consulting services (for example, legal representation) would go into SG&A. These costs are independent of any goods you’ve sold, because you pay overhead no matter how many units you sell (or don’t sell). If your solution lowers data center cooling costs, then you are impacting your customers’ SG&A costs.

Net income.

If a company’s leaders want to improve profitability, they have three basic options.

Increase Revenue

1)    Increase the volume of what they sell.

2)    Increase the price of what they sell.

3)    Create a new product to sell.

Decrease CoGS

1)    Reduce the cost to produce the product.

2)    Reduce the cost to deliver the product.

Decrease SG&A

1)    Reduce marketing cost.

2)    Reduce selling cost.

3)    Reduce R&D (or engineering cost).

4)    Reduce administrative cost.

5)    Reduce other overhead cost (including IT).

So, how does it help you to know what’s in a company’s income statement? For one thing, it helps to show the prospect that you understand where their company is financially. For another, it sets you up to talk about your offering in the context of whatever their financials look like. If your offering cannot impact the prospect’s income statement in a positive way (aka, by helping them do one of the three things listed above), then you haven’t yet figured out how you can deliver value to this customer. If that’s the case, you need to figure out how you can impact their financials or move on to another prospect.

How do you leverage financial statements when talking with customers? Share your thoughts in the comments section. 

The ROI of Winning an Oscar

OscarOne of the coolest things (in our opinion) about ROI is that you can calculate it on almost anything.

In the B2B world we obviously use ROI calculations to show our prospects and customers what they’ll gain by investing in our solution or offering. Recently – and just in time for the Oscars – we came across an interesting post from Forbes showcasing a list of actors that deliver the best return on investment for movie studios. Although it’s common to see lists made of actors that command the highest salaries, it’s slightly more unusual to see someone thinking from the perspective of ROI. Here’s the methodology they used:

Taking a star’s pay on a film, and the movie’s estimated budget, box-office receipts and DVD sales, we calculated a return on investment number, and then averaged the numbers for their last three films to get an overall return.

By this reckoning, Forbes placed Jennifer Lawrence third on the list, noting that she yields a return of $68.60 for every $1 she was paid. They also note that actors that accept smaller paychecks actually increase their ROI. (This is why Emma Stone ranked #1 on the list.)

You might assume that an Oscar winner would command a higher salary, but this separate Forbes post indicates that the equation isn’t so straightforward. In fact, winning an Oscar is not a good indication of higher salary earnings.

This is another good example of how there’s more to value than just price tags and budgets. Value is always in the eye of the beholder. To some, going home with a gold statue holds infinitely more value than a multimillion-dollar paycheck. As Forbes notes, actors who put a premium on winning an Oscar sometimes agree to lower paychecks for the chance to work on films that offer lower budgets but higher artistic credibility. To them, the trade-off in salary is more than worth it.

The same principles apply in the business world. Just because a solution is more expensive than anything else on the market does not guarantee that the customer will see a higher ROI. In fact, a higher price makes it more difficult to show a higher ROI. Conversely, the cheapest solution is not necessarily the best value. As we pointed out in a recent post about differentiating from your competition, value is relative not to what you paid for the solution but to what the next-best alternative is. Value encompasses price, plus the cost to deploy and maintain your offering, costs in other areas, and the impact on the customer’s revenue. All of those elements need to be taken into consideration when calculating ROI.

We’ve not yet been asked to assemble a value calculator for a Hollywood studio, but I’m sure it would be fun to try.

What do your customers value? What are some of the trade-offs they make in the name of value? Share your thoughts in the comments section.