Are your sales and marketing aligned across Segments?

Robert De Nero and Anne Hathway starer “The Intern” has a particular scene wherein the sales analysis shows the company has been spending more marketing dollars on low value segments and practically nothing at all on high margin low volume segment.  Does not this sound familiar? While companies realize Sales and marketing need to be tightly aligned, but that seldom is the case.  A senior marketing director in a recent conversion blurted out that while her marketing budget has increased YoY, the ROI seems to be elusive. What was bothering her was the fact the company spends substantially in curated events managed by respected analysts, and yet sales find the coverage insufficient.

Companies spend a fortune on the conferences and events but the outcomes belie expectations. It is not surprising for many corporates to find 75% of the participants who attended their events came for free lunch or a swanky dinner. Many of the participants may not be the decision maker or influencers, but pretty junior in their organization. Corporate gifts, industry exhibitions cost a dime, and yet ineffective. Albeit companies continue to pursue many of these acts they are afraid to pause and question fundamentals. What is the objective of the event?. Why this city and this hour?, How this format will help sell their ware?. Unfortunately, many leaders want to just follow the herd. Therefore it is not surprising when studies across industry indicate:

  • 50% of marketing budget is totally wasted
  • Only 34% of feel their content marketing works
  • 25% had no marketing strategy
  • 44% had no alignment between various marketing media

So how can companies ensure their marketing dollars are well spent and drive intended sales outcome. On the outset, it is important to realize marketing function serves three objectives. These are inform, influence and advocacy.  Any marketing activity is to help consumers associate with the brand, help differentiate its offerings and seek higher revenues. Companies use various marketing assets to communicate to the interest group their unique existence, product/service offering set, pricing and other advantages. The objective is maximize reach at an affordable cost. Companies use several approaches to drive influence. Awards, citations, sponsored industry events, directed online community forums, endorsements are all effective mediums of influencing consumers. Advocacy is to enlist willing individuals who would eschew the role of brand ambassadors and drive positive word of mouth.

Different marketing assets serve different purpose and effective at different stages of sales cycle. Assets such as breakfast meeting facilitates more personalized one on one discussion that may be more effective in later stages of sales cycle. On the other hand,   assets like newsletter or blog may be more useful in the early stages of sales cycle. Marketing assets also vary by their cost and impact. Some of these cost a dime and more effective to lock-in, while some may be low cost approaches to increase reach only.

Companies can realize better return on investments in their sales and marketing when these functions are congruent and well-coordinated. Congruency can be gained by ensuring same goals drive their quarterly activities, common goals entwine both functions at various levels and incentives encourage them to support each other. Coordination improves when event plans, promos, content marketing and other assets are aligned with sales motions. It is important to realize sales motions differ across segments within a company. Segments vary on the “value” of purchase and the number of customers in that particular segment. It is common to have a segment A that has few numbers of customers with a high purchase value. B and C segments are those with lower values of purchase and incumbent sizes. Each of these segments exhibit different sales behaviour. Purchasing cycles may be longer and more formal in Segment A, while the decision making could be shorter in Segment C.  Sales may have to interact and influence multiple owners in enterprise segment. Order qualifying criteria may not be just enough in Segment A. Marketing must be able to push the company over to order winning plateau.

Segment A requires an enterprise sales approach where formal decision structures and vendor registration and assessments exist. Customers in this segment may be well informed about the happenings in the markets, and well-endowed to invest high ticket investment. Many customers in this segment may already been served by your competitors and would only move if there is a compelling value proposition in terms of cost, or innovation advantage. Sales function is completely managed by direct sales as relationships and continuous coverage matter to enter and grow the revenues. While inside sales functions support the direct sales with deeper profiling of people and secondary data analysis, direct sales has a key role in engagement of the segment.

Customers in segment A place a high premium on scalable and proven solutions. Prior experience and in depth expertise of the vendor play a key role in awarding the project. Marketing platforms must facilitate experience sharing and credibility reinforcing functions for direct sales to influence and close deals in this segment.  Thought leadership vehicles including standards, industry frameworks and innovation ideas fly well in face to face meetings with the customers.  Breakfast meetings, Industry association, standard setting bodies, and Knowledge sharing conferences serve as valuable platforms for direct sales to position the company at state of art knowledge.  These platforms allow discussions to be personalized and centred on solving the problems the clients face, hence meeting service immediacy.

On the other hand, segment C, which has large number of customers with low ticket value may need a marketing and sales approach where the total transaction costs are optimised.  It is practical to have inside sales as the champion to host and on board customers in segment C. Marketing functions role for this segment is to improve the reach across the market and reuse the content to improve the richness of various marketing assets.  Companies can improve the reach and engagement with Segment C by adopting a consistent campaign blast policy. Mail them a newsletter, case studies and customer wins to increase awareness about your brand. Emphasize on content creation, curation and extension to reduce investments in content development. Content can be text, video and other formats. Use social media platforms to connect owners and decision makers and also to run campaigns.  Figure 1 presents the alignments between Segments and Marketing assets.

Figure 1: Alignment between segments and marketing assets.

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Sales efficiencies can be gained only when direct sales team are running after few accounts with a deeper insight and ownership. Also, how the inside and partner (indirect) sales team complement the direct sales matters for Segments B and C. What works best is when companies know how to mesh mash both sales and marketing functions for each segment. Have a quarter-wise marketing plan aligned to sales expectations. Content development and curation can happen in stages and stronger stories and messaging will emerge with each asset to engage and influence customer. Having a common Head of Sales and marketing or marketing aligned with sales in another structural approach that can be tried. Cross functional teams tasked with joint activities across sales and marketing will also be useful.

Dr TR Madan Mohan

 

 

How companies are adopting Holacracy principles to build effective sales teams

For many companies, sales function is an area where outcome is never closer to expectation. Companies suffer from weak funnels, missed closures, lengthier closure cycles, order losses and attrition.  These are the waste that emanate in sales function. It is well known sales teams that hunt as a pack always produce better results than those that hunt individually. Unfortunately, many sales teams discourage sharing of information about networks & influence of client organizations across team members. Many a times a particular sales resource may be approaching a client organization in a certain suboptimal way without privy to alternate courses. Other colleagues may have prior experience of the account and/or situation to tide over the apprehensions. Bereft of multiple perspectives, the sales cycle would linger, and eventually the sales resource will lose interest on the account and drop it from his hunt. Incomplete sharing of information and inadequate planning for a particular opportunity is another challenge sales team face.  Weak alignment, between inside sales and direct sales teams or KAM teams with others is another area that leads to sales inefficiencies.  Role conflicts and tensions may also arise due to operational and personality issues.  Poor policies on account transfer between direct and inside sales team, weak sales operations, and ineffective review can exacerbate drop rates. A salient issue in solution selling companies is lack of comprehensive involvement, poor alignment and ineffective role management between pre-sale and sale teams across various stages of a customer acquisition. Diffused and selective ownership without a complete coverage of customer experience management leads to lengthy customer requirement cycles, protracted customer sign off process and potential financial loss.

Companies are realizing to counter bounded rationality problems, improve commitment and camaraderie within the sales teams, they need to build coopetition teams.  Teams in a coopetition collaborate to address common challenges, and address gaps and yet can remain competitive in pursuit of the individual goals. In recent years, companies like Ternary software, Zappos, David Allen Co, Precision Nutrition and others have adopted Holacracy (the system of self-governance) as an approach to build self-managing teams. Holacracy is an approach to distribute authority across the organization. In a Holacracy the organization evolves continuously adapting its structure and process through ongoing peer-to-peer governance. Common elements of organizations adopting Holacracy principles are a) constitution that defines the roles and distribution of authority related to tasks or outputs, b) roles and accountabilities, c) collaborative decision-making process enabling change in roles and authority consistent with evolution and d) meeting process that promotes co-creation and collaborative working.

Companies adopting Holacracy principles for sales organization implement following. Firstly, they create a leadership ring to build multiple owners who can eschew same corporate and sales dream and chase the horizon. However, unlike the Holacracy organizations, these rings are limited to the first level of sales, pre-sale and delivery management, the organization below each leader is still hierarchical. The leadership ring collectively evaluates opportunities, discusses approach or various sales motions (national, key accounts, acquisition, strategic account, label wins), creates proposals and pricing models, and comprehensively manages customer interaction.  The group runs as a virtual organization within the company. They validate customer requirements, aligned design and delivery, and eliminate rework. Recognizing the need for flexibility to counter exigencies, leadership ring has weekly rhythm meets to discuss progress and exceptions. Any engagement model deviations, change requests, requirement changes or client leadership exits are discussed openly, opinions are considered and a comprehensive approach is arrived after considering multiple perspectives. One strategy is collectively approved individuals are given complete ownership ad freedom to pursue the actions. To support the changes in the roles and ownership of different teams over the life cycle of a customer engagement, the sales teams build a culture and process where different people wear the leadership hat. In the initial part of customer engagement, sales resources own and direct inform and influencing of customer. However, a pre-sale expert takes over the solution enumeration and client acceptance, after which the sales leader and pricing teams dons the mantle. Finally, the crown comes back to the sales resource to chase the closure. Once the order is picked, the mantle moves to delivery as the prime owner and sales as the secondary owner. Finally, what distinctly distinguishes “Holacracy” team sales reviews, is this is not the typical high octane name calling threat laced ritual. The review system moves away from status and fault finding to status and solution offering. Each review meeting is initiated with a revisit of the purpose and with a focus on actions by individuals and team can impact positive outcome.

Companies adopting Holacracy principles for sales must understand it is a cultural change and requires both management investment and patience.  Sales team members must experience the trust and openness to share everyone view and the collective decision making. Parochial leaders may find the process limiting insular control of team and threatens group politics.  Importantly the ability to steer the focus towards “problem solving” than “one man up”  behaviour is the key to the success of the program.

Vasavi R, Sai Vinoth and Dr TR Madan Mohan

Priming your Industrial (B2B) sales…..

Industrial or B2B presents unique set of challenges.

Vendors may be selling to an intermediary for example an EPC or a contractor who in turn may be executing the project for an end user. While the intermediary may be more concerned with price, speed and availability, end user may focus on quality and performance. Managing diverse decision criterion requires fine balancing of relationships and strategies.

  1. Getting the product as an industry standard or emerge as a default choice is most important part of marketing. This may require informing and influencing not just the end user, but intermediaries like EPC also. Importantly the design folks within the client organization and outside need to be influenced and won over.
  2. B2B environment is highly competitive, in fact in some segments your former employees may be working for your competition with complete tacit information about sales strategy. Often there would be handful of customers with balance of purchasing power tilted towards them.
  3. B2B markets also highly exposed to commoditization. Pricing pressures could be high. Product cycles may be shortened by innovations and substitutes emerge often to displace the markets.
  4. Replacement market is a major growth opportunity. But the decision-making can be short, and unscientific. Replacements are made are 3rd party advice, availability, and price rather than quality or performance.
  5. White labelling or contract manufacturing is yet another sales growth opportunity that brings its own challenges of cannibalization of focus.
  6. B2B sale requires sales process to be customized to the procurement process. Unlike B2C business cold calls by themselves will not get business. According to a Forbes article, more than 50% of B2B sales resources consistently miss their targets. Many orders fail to materialize as the arc of meeting; educating, influencing and closing the order have been missed.

 

How can one ensure their B2B sale is firing? Right structural alignment, adherence to process to capture the activity at each sales stage, and appropriate incentive systems help a company realize right sales outcomes is what I actually needed to make B2B sales happen.

Get the right rhythm of activities between arc of initial meeting, mapping of key decision makers, product education and influence, defining right commercial terms and closure. End users need to have a solid reason to place an order, may need to follow up documentation and hierarchy before the decision is made.  Customer segmentation, need analysis, profitability and associated risks must be weighed much before you respond to an RFP.  If the end user happens to be government or large organization additional challenges of bank guarantees, penalties and receivables must be evaluated in detail.

With increased adoption of mobility and availability IT tools, companies can use appropriate structural arrangements to minimize the cost of sales and yet improve reach and conversion. Sales structures must include not just direct sales teams, but inside, partner and product teams that complement the direct sales. Create a dynamic sales organization that not only covers the markets, but builds partners and ambassadors for it. A dynamic sales organization must include:

  • Inside sales – Identify people, Google search, secondary data
  • Sales Executive – Feet on street, Coverage, Meet people, Verifying data and collect Information
  • Branch Manager – Administrative Cover, Link with Technical and Project people, Pre-order and post-order point of contact
  • Product Manager – Technical specialist, Influence Design/ Technical team, Identify the cost saving technical options, Match/ Improve technical
  • Regional Manager – Business Leader for the region, Price and Margin manager
  • General Manager – P&L leader, management representative, maximum interest with company and across company, Revenue Leader

With new technologies B2B companies must realize sales resources are not the only one to open door and neither opportunities nor marketing is the exclusive promoter. With many B2B buyers self-educating using tools like social media, vendors need to effectively empower and promote product and application engineering teams to network and influence the ecosystem, right from design companies, EPC contractors, Standard setting bodies and user community. Role of product management that helps in inform and educate, influence the design and procurement teams by its expertise and bring alignment between requirement and solution is often under invested. Product managers are key to requirement gathering but also define the specs of an RFP.  Promote product management –client and design interactions at all levels.

Invest in sales operations. Sales operation has different meaning for every company. In some, sales operation does number collation and crunches data. In some they are responsible for system, programs and process. In some they are responsible for pricing and participate in large complex deals. Fundamentally, the role of sales operations is to capture the data related to sales activities, and help sales team to make decisions based on data rather than subjective assessment. Sales operations more than just being a data sink, helps integration benefits to the organization by linking various activities.

Make available non-sales oriented platforms and information content to inform, educate and advocacy of their expertise and products.  More educational content from a B2B vendor helps in build trust and respect for its expertise. Share original content on social media platforms and optimize for search. Companies that go beyond their product range and address the complete industry are seen as leaders and more such content augments the credibility of the company’s brand.

A major change B2B vendors need to make to their sales strategy is to consciously move away from the decades old sales playbooks they treat as mantras. B2B vendors who just moved their sales process to modern technologies without fundamental changes in the sales engagement find the results are always below expectations. With the new technologies and information intensive markets, B2B vendors may have to rework their sales playbooks but also rethink how they are enabling the sales person to decipher and deepen the customer’s knowledge. While adopting the new technologies ensure the playbooks allow sales resources to adjust their individual strategies and styles to add value to the sales engagement process.

T R Saivinoth

Bridging the craters between Sales and Marketing

Most companies in traditional industries during the formative years typically have marketing and sales managed by a single department. On the marketing front, companies usually make rudimentary investments as part of sales efforts. They at best participate in related industry events or advertise in local media. However, as organizations grow, the need to manage marketing and sales as independent and yet complementary functions becomes necessary. In our observation, most companies run into the puddle of creating silos with no tight alignment between marketing and sales departments. In some companies the lack of synergy permeates product development and delivery functions also. The result is that product development does not use marketing to get market inputs, marketing does not use sales as their antennae in the market, and sales does not use marketing to drive a marketing led sales approach to grow revenues. The need of the hour is for greater co ordination between the two functions to succeed in the highly competitive and uncertain environment. Integration is ensuring the team coordinate and complement each other as in a relay rather than a 100 meters dash.

Mechanisms to integrate: Sales and marketing need to be consistent, congruent (same goals, support each other) and co-ordinated (event plans, time promos, content marketing with sales visits). Some mechanisms in Process, Structure, people and Goals can be used by managements to achieve integration.

Processes is all about ensuring communication flow is seamless, no information hoarding happens and internal latency is nil. Process is to ensure the owner has the complete info and authority to drive the outcomes and outputs. that are well designed and implemented are most useful. Process are effective only when the actors are embedded deeply. Defining a process for marketing where certain inputs are mandated to be obtained from sales, and outputs shared with sales can help to tie down integration and embed this in the process itself. Same thing can go for sales, where they seek marketing inputs into presentations, collateral required, target customers etc. Defining a detailed process with inputs, outputs, metrics and persons responsible is very useful.CRM systems can be used to achieve a degree of integration between sales and marketing, especially when it comes to co-ordinating marketing campaigns, lead management, getting information through call reports from sales etc. Marketing and sales have different customer experiences and information. The experience a sales person has with the customer can be very different from the experience a marketing person would have in interacting with customers. Somewhere these need to be woven together to build the real picture. When integrated with an effective CRM to provide one view, it becomes a powerful tool for insight and effective action.

Structure can be used to integrate sales and marketing. Having a common Head of Sales and marketing will allow effective integration.  In large companies, cross functional teams tasked with joint activities across sales and marketing will be useful. They will be driven, there will be ownership and it will be effective.  Though. At times, it could be slow due to consensus issues and expensive as well, due to the redundancies built in. The new trend is for companies to have Integrators or SDR (Sales Development Reps) who act as co-ordinators between sales and marketing. This can be an effective low cost structure, But the KPIs of the SDR, sales and marketing folks need to be tied down to common objectives.

People aspect needs attention as well. When the culture in the organization is such that people have too much affinity for functional areas, and there are interdepartmental politics and fights, integration is not easy, and one knows for sure that this needs to be ironed out. The level and experience of people at the boundary units (like sales) makes a big difference and determines structure, process maturity, etc. When sales persons are mature and experienced, companies can work with loose processes, informality and uncertainty. But when we have in experienced and junior teams, and there is churn, systems have to be robust to help the organization withstand the confusion at the boundaries. This is a call leaders need to take – if the role is critical and processes weak, then place mature people in such roles. Co location of product development, marketing and sales is good, especially for large dispersed companies. It builds affinity and cohesion, but there could also be some trade-offs here. On the cultural front, facilitating Informal social ties, having an open environment, being job oriented rather than individual oriented, being result oriented rather than process oriented, are issues that need attention and tweaking.

Goals Integrated: In many organizations the adage “what you measure gets done” is the norm. Companies can use common objectives and goals to tie up complementary functions. Marketing and sales responsibilities can be designed around the customer buying processthe steps that the customer goes through – some call this the revenue cycle and not the sales cycle. Hence how do marketing and sales together funnel leads through awareness, interest, consideration, intent, evaluation and purchase is the key. Earlier, only the TOFU (top of the Funnel) activities qualified as marketing and the rest was sales. But as consumers research &educate themselves, 75% of buying decisions are made even before the sale begins. Hence marketing now extends all the way to the bottom of the funnel as well. Marketing is becoming more about content while sales is more about expertise, and these need to be well knit. Incentive design and linking good performance management systems are keys to get teams to work together. A lot of attention needs to be paid here, but companies are typically weak in this area, and a schism in inter-functional coordination always exists. Job rotation programs also help in getting sales and marketing folk to appreciate the challenges on either side and enable them to work well as teams.

When the above systemic, structural, cultural/people, and goal oriented issues are analysed and designed to be integrative in nature, high levels of sales and marketing integration can be achieved, leading to substantial performance improvement.

Is your sales firing?

One thing common about Sales is that it exhibits a common tendency to go uncertain! Many companies suffer from unpredictable, unsustainable sales and thus profitability. Most organizations fall into a common fallacy that only numbers matters, what is the sales output.  In my view, measurement of sales functions requires one to take a comprehensive view of the inputs harnessed, the sales process and outcomes. First let’s look at sales inputs. Does your organization have a sales structure to exploit new customer acquisitions and mining independently? Dedication brings focus and efficiency. Second part of input, is what investments are made to identify opportunities and how to quickly convert them, what most management theorists call “sense and respond”. Have you built intelligence tools (not just salesforce.com, but more humane partner info systems) that help in steering the sales organization to new ebbing business opportunities? Is your sales org agile enough to notice and cash on gaps in competitive product space, new delivery requirements or just plain fulfilment opportunities?  Most crucial part of your sales is the sales person.  How lively and active they are in engagement skills, listening, requirement gathering and solution selling. Plain Jane product pushers may not drive sales and customer engagement in markets beset with technological and requirement advances. Hire them for attitude and not some fancy degree. 

Sales process arrangement and efficiency drives the sales process. Is sales process comprehensive to capture all that happens during a sales process? Does it help you uncover where the current status is and why the sale is stuck at this junction? Is the process simple enough for sales guy on the street to work with? How does the sales process enable your staff to take calculated and approved risks? Does the sales process allow sales people to function within ethical guidelines and yet remain competitive? Are the incentives sharp enough to drive the expected behaviour? Do the incentives stretch the performance of individuals?

Finally, on the output side, what is that one wants to measure, how often and how this measurement must drive a particular behaviour? An insight from world class manufacturing organizations warrants a look here. Companies that have built great products and are successfully competing globally, have one thing in common. The number of measures of output is few, they allow ownership and risk taking at the front line and overall the performance is highly “visible”. The benefits the world class companies’ gain is relevant, reliable and accurate information to know where they are leading and how to land at the determined shores.

Deepesh M