Engaging B2B Customers Online

Years ago many B2B companies would never have dreamed that they’d be using the Web to capture and engage with customers at the earliest stages of the sales cycle. Vendors’ websites were thought of as a place for prospects to affirm what they learned from sales. However, the reality for sales and marketing today is much different. As a CEB study has revealed, more than 1,400 B2B customers across industries revealed that 57% of a typical purchase decision is made before a customer even talks to a supplier.

I made the video below in response to the fact that many customers today actively avoid seeking out sales professionals to learn about products and solutions. Instead, customers are searching the Web to learn more about solutions that can solve their problems and get educated about topics that affect their business. Here are the steps I recommend that B2B vendors take to engage with buyers online:

1)     Include information on your site that is unique and relevant to your prospective customers.

2)     Offer engaging content such as videos, blogs, polls, calculators and assessments.

3)     Include a call to action that clearly articulates the next step forward.

I invite you to watch this short video to learn more and share your feedback with me in the comments section.

Finding Your Sweet Spot (Competing on Differentiation)

A good business strategy helps you differentiate yourself in the market. When I work with clients on strategy, I help them figure out their sweet spot. A sweet spot is the intersection of two things:

1)     What your customer SHOULD want.

2)     What you’re uniquely qualified to provide.

Why do I use the word should in the first point? Simple: because customers may not know what they want.  Here’s why this is important. Whether you’re asking current or prospective customers what they want, you’ll hear about price. “I’d like the same thing you’re providing, but cheaper,” or, “I currently buy this product, but I’d buy it from you if you could offer it cheaper.”

Some companies hear these answers from customers and immediately jump into what they consider a “strategy” to meet these needs. In reality, this approach (which I call “me, too” product development) merely puts you on a path toward commoditization, which is a race to the bottom.

Why is that? Say a “me, too” product takes a year to produce and go-to-market. The result is you introduce your product just a little bit behind the curve, at a quality that’s probably not as good as your competitor (because they’ve been working to improve and innovate while you’ve spent 12 months trying to get to status quo), at a price point that’s probably not compelling enough to turn anyone’s head.

Customers don’t know what’s possible. They probably don’t understand what you’re capable of developing. Henry Ford really brought this point home when he said, “If I had asked people what they wanted, they would have said faster horses.”  Instead of leveraging your talent to meet targets that your customers think they need, think about what they should be considering. That will allow you to offer what you’re uniquely qualified to provide, which will lead to differentiation rather than commoditization.

Developing an objective view of what your customers should want requires an informed perspective on their underlying needs – what are the business issues they struggle with and what is it worth to solve them? A simple but often overlooked truth of business-to-business marketing is that if you can make your customer more profitable, they can pay you more.

Are you confident in your ability to differentiate and avoid commoditization? Do you know enough to describe your customers’ underlying needs, or are you stuck in reacting to their requests? Share your thoughts in the comments section. 

Read This before You Talk about ROI

How frequently do you use the term “ROI” in front of customers and potential buyers?

I frequently hear sales and marketing professionals talk about “ROI” inaccurately. In a casual conversation, people might still give you the benefit of the doubt and have faith that you know your stuff. However, if you’re making a formal presentation or having a serious conversation with a prospect who’s well versed in financial terminology, any misuse of the term could obviously leave a disastrous impression about you and your company.

For example, I hear both sellers and marketers say things like this all the time:

“Your ROI is $100,000.”

Why this is incorrect: If you’ve ever expressed ROI in terms of dollars, you’ve likely confused ROI with net present value (NPV). NPV answers the question, “What is the cash benefit minus the expenses required to achieve the benefit worth in today’s dollars?” ROI is not a dollar amount — it’s a percentage. Specifically, it’s a percentage that represents what your net gain will be on any investment.

ROI = Gain of Investment – Cost of Investment / Cost of Investment

In other words, if your benefit is $100 but you spend $50 to achieve that benefit, your ROI is 100%.

NPV is still an important consideration because the term takes into account the value of a dollar over time. Obviously a dollar today is worth less than a dollar five years from now. Let’s say you invest $100,000, with an expected return of $120,000 within the next two months. That investment would be worth more to you than an investment of the same amount of money, with an expected return of $120,000 five years from now. The reason is that $120,000 is worth more two months from now than it will be five years from now.

Speaking of periods of time, I’ve also heard sellers and marketers say things like this:

“You’ll get a six-month ROI with our solution.”

Why this is incorrect: If you’ve ever expressed ROI in terms of a period of time, you’ve likely confused ROI with payback period. Again, ROI is always a percentage — never a period of time.  If I invest $100,000 in a project, the payback is the length of time it takes for the cumulative benefits to become greater than the cumulative investment.  Payback period is always measured in time (typically months).

During my first job out of college as an engineer, I became an economic evaluator. That meant part of my job was to evaluate capital investments and decide whether they represented a good investment for the company (including evaluating the payback period, NPV, and ROI). So that was where I learned a lot about financial analysis and how to talk about numbers with CFOs.

The magic of these financial metrics is that together they give you a great picture of the impact of an investment. Essentially, you can measure ROI on anything. The formula is simply to subtract the cost of your investment from the gain of your investment, and divide it by the cost of your investment. That’s how we’re able to build ROI calculators for so many different scenarios for our clients.

People confuse financial terms all the time, so if you’ve gotten this one wrong in the past, don’t feel bad. Just don’t let it jeopardize your ability to close a deal.

What’s your understanding of the term “ROI,” and how frequently does it crop up in your discussions with prospects and clients? Share your thoughts in the comments section. 

Maximizing the ROI on Your Road Warriors

Field sales teams are very expensive. When a salesperson has to travel outside the office to see a customer — possibly on extended trips to another city, state, or country — the price tag of a sales call can easily add up to hundreds if not thousands of dollars. Here are some ways sales organizations have responded to this reality.

1)     Create (or grow) an inside sales team. As this HBR blog post points out, companies like IBM, SAP, and Astra Zeneca have all invested heavily in growing their inside sales teams. When you consider cost per sale, this makes sense — inside reps make contact with prospects and customers via phone call or video conferencing and thus eliminating travel expenses altogether.

2)     Ramp up marketing assets and optimize online selling channels. Customers today research and buy products online  — this is true even for complex and highly expensive B2B solutions. That means customers are engaging with salespeople at a different point in the sales process; much of what field sales teams used to accomplish (knocking on doors and delivering presentations) have been replaced by online content that can be watched or read online. In other cases, companies are taking cues from customers and waiting to deploy field sales reps until customers indicate that they’re ready for a face-to-face meeting.

3)     Find ways to make field sales highly productive. One way, as we mentioned, is to create an inside sales team to augment the more expensive tactics practiced by field sales. Another way, however, is to adopt tools that directly benefit field sales. InfoGrow is a great example. Their CRM Call Planner tool allows reps to “cluster” their meetings by location, on a map within Dynamics CRM, to maximize the return of their time spent on the road (including turn-by-turn directions to prevent getting lost, and street and satellite views to find parking quickly — if you’ve ever had navigation or parking troubles on the way to a client meeting, you know these are two major productivity losses). If a meeting falls through or the rep has more time than planned, he or she can also use the tool to quickly find other opportunities to cold call nearby.

It’s important for all companies to quantify and measure their productivity levels. (In fact, we’ve helped a few clients create tools to do just that.) Sometimes we assume our sales and marketing teams are productive without any real evidence to back it up. Other times, we know a problem exists because we’re not getting the results we want — we just don’t know exactly where the problem lies. The great thing about tracking ROI is that you become empowered to take the right steps to put you on the path to success.

Do you have a field sales team? How are you measuring productivity? Share your thoughts in the comments section. 

Overcoming Objections in a Complex Sales Cycle

Learning how to overcome objections is an essential selling skill. It also takes time and experience. This is particularly true for sales teams with a long and complex sales cycle.

With that in mind, here are links to four of our most popular blog posts related to overcoming different kinds of customer objections during a complex sales cycle.

Make labor savings believable with customers

Prevent objections in the first place

Persuading the CFO

What to do customer asks for a revised report/business case

What’s the biggest objection you hear from customers, and what is your response? 

Discussion with a Sales Leader: The Transformation of the SunGard Sales Force

Last week I spoke with Ken Powell, who’s been leading a sales transformation at SunGard in his role as VP of Global Sales Enablement. (He was also a speaker this week at the Sales 2.0 Conference in Boston.)

He joined SunGard just 15 months ago, but his prior experience leading a sales transformation in his previous role at ADP helped him hit the ground running. Already he’s taken many steps to improve sales effectiveness. These have included:

  • equipping the sales team with mobile devices (specifically, Windows 8 tablets, which have “exceeded” his expectations and are “more business friendly” than the iPad);
  • adopting various Sales 2.0 applications (including Xactly, OneSource, LinkedIn, and SAVO, to name just a few);
  • simplifying messaging.

As a company, SunGard is in an interesting spot right now. Formed originally through acquisitions starting in the 1980′s, its primary revenue driver is currently software licensing, although they also have a large consulting organization. Ken said one of their aims is to make the consulting aspect a competitive differentiator.

To that end, Ken has already done quite a bit of work with his team to refine the message his teams send to the market. Whether his salespeople are face-to-face with customers or interacting online, Ken has made it clear that they must connect the capabilities of SunGard solutions and capabilities to business outcomes. Given this initiative, it didn’t surprise me to learn that one of the next steps for Ken and his team is to incorporate value-based selling tools (and TCO tools in particular) into the selling process. In his words, proof of value is “a natural course of a conversation that professional salespeople need to have today when they’re interacting with customers, because it’s an expectation.”

Since I’m in the business of creating ROI tools, Ken asked what I tell clients about overcoming the fairly typical objection from customers about “fictitious numbers.” As we all know, numbers can be arranged in ways that will support almost any kind of story (as Mark Twain said “There are three types of lies:  lies, damned lies, and statistics.”) As a result, many customers look at numbers supplied by salespeople with a very skeptical eye.

I said that, in my mind, a major benefit of using a value calculator (or other tools) as part of the sales process is transparency. Whenever we train salespeople on how to leverage ROI tools, we advocate what we call a “peel-the-onion” approach. Salespeople should rely on the default calculations of an ROI tool to generate an initial report. But the next step shouldn’t be to simply throw the report over the fence and let the customer evaluate it alone. A much more effective route is to say, “We have this tool to evaluate your business case and decide whether or not this solution makes sense for you. Let’s sit down to discuss the numbers together.” After that, you answer questions and adjust numbers accordingly as you go.

With a peel-the-onion strategy, the customer sees the numbers evolve and thus becomes invested in the final calculation. For example, you might change the default analysis from three years to five years on the spot. Or, if the customer pushes back on a point, you have options. If the customer says, “Ok, I’ve seen your case study and how you’ve done this with other customers, but I personally don’t think you’ll ever get a two percent reduction in labor for us.” At that point you can ask the customer what he or she feels is realistic. If it’s one percent, you plug in the numbers for a one percent reduction in labor and show them what that scenario looks like.

The point is to start the conversation with numbers. Numbers will get the customer engaged. Only then can you talk about features and functions and how you’ll be able to support those numbers with your capabilities.

Great sales leaders must make hundreds of choices that will influence whether or not their sales teams succeed. This is particularly true for sales leaders that undertake a sales transformation, which by definition involves countless changes that all tie back to a unifying business strategy. It’s an interesting journey for any sales leader and I look forward to seeing what evolves at SunGard.

Do you have a sales process that supports a business case? What do you say when customers show skepticism about numbers? Share your thoughts in the comments.

Find New Growth Opportunities by Expanding Your Market Definition

If you’re trying to find new opportunities in a market, it doesn’t necessarily mean you have to expand your product line. First expand your perspective. Why do I say this? To paraphrase Harvard marketing professor Theodore Levitt, people don’t want to buy a quarter-inch drill bit. They want a quarter-inch hole. In other words, look at the market from the perspective of the problem that you solve.

In other words, if you’re looking for opportunities for growth, don’t limit your thinking by looking just for people who want drill bits. Look for people who need to find ways to make holes. A potential buyer might find any number of options: hammer and nail, a neighbor’s drill, a contractor, a laser cutter, a CNC machine — even dynamite (if he doesn’t care about the precision of the hole). If you limit your understanding of your market to a product definition, you miss out on many alternatives to solving the customer’s problem.

Invariably, however, markets continue to be organized by the product or service being sold. Again, that’s because many sellers and marketers accept the premise that a market is specific to a good or service. If you define your market this way, you’ll frequently miss all kinds of potential customers, including those who

  • Aren’t aware that a solution exists, or didn’t even realize that they have a problem.
  • Don’t have access to buy the solution because there isn’t a developed channel to serve them.
  • Are currently unable to use the solution because they are missing other elements required to solve the problem.
  • Currently won’t buy because the solution lacks benefits for their situation.
  • Currently won’t buy because the solution is too expensive for their situation.

I use the word “solution” on purpose, because it highlights the fact that there was a problem being solved. In one of my recent blog posts, A Tale of Finding New Profitable Growth Opportunities, I discussed how Apple found opportunity in the MP3 market when everyone else was struggling. Back then, I think it’s likely that Apple wouldn’t have defined this market as the “MP3 Market.” Instead, they probably would have defined the market as something along the lines of “anyone who wants music to be portable, legal, easy to access, and fun.” That isn’t a product view of the world; it’s a view of a problem being solved.

It’s not always easy to find new opportunities for market growth, but it helps if you look for potential from both a smaller and larger market perspective. The smaller market definition is your core. The larger market definition shows where there is room for growth and where you should be looking to expand.

When looking for new market opportunities, there are many dimensions that you can consider, but these three questions often prove helpful:

One: Who do we serve? Possibilities include:

  • Industries
  • Geographies
  • End-use applications

Two: What are we delivering?  Possibilities include:

  • Scope of supply An example of scope of supply would be you can make a sensor going into a pressure measurement device going into a pressure control loop going into a fuel control system, or you could make any of the larger portions of the system.
  • Problems you are solving

Three: How are we serving the customer (or getting paid)?

  • Payment model (paid an initial price, paid a price plus maintenance, paid as a service (SaaS)
  • Basis of payment (paid for delivery of a product, paid for delivery of a capability, paid for an outcome)

The diagram below shows an example of how a product company might be able to expand their market definition.

3d market model

Think about the market from your potential customers’ perspective. Then, define the market based on the problem that you’re solving. That will help you think about all the alternative ways to solve the problem, and it should help you to find new opportunities and identify potential competitive threats.