Put Your Money Where The Value Is

By Scott Santucci June 12, 2007

Why has market development gotten so hard?

At executive staff meetings, it is not uncommon to hear CEO's say any or all of the following:

  • 'Branding is nice, but I need revenue.'
  • 'We have to manage to costs, let's cut Marketing's budget again.'
  • 'What are we getting for our marketing investment? Let's spend more on sales instead.'
  • 'What is Marketing doing to help generate sales?'

Let's face it; today it's all about ROI.

Sales are lagging, and although the economy appears to be recovering, your company still has monthly expenses it has to meet. All investments are getting scrutinized.

Marketing is being asked to participate in the sales process to a degree not seen in the past ten years. Although typically lacking significant sales experience, vice presidents of Marketing are being held accountable for revenue targets.

This has led to four categories of frustrations among marketing executives:

1. Difficulty securing required budget

In the current financial environment, the budget for Marketing is being treated like a discretionary expenditure rather than a critical business function. Existing budget items are being slashed, and getting new funds approved requires an expected return something most marketing organizations cannot demonstrate.

While many departments are doing a good job of measuring expense-related metrics, they are hard pressed to produce evidence that shows objective relationships between marketing investments and revenue. Not able to defend budget requests, marketing executives are now faced with doing their daily tasks (brand building, PR, collateral development, etc.) with the increased demands of assisting SalesC9all with a smaller budget.

2. Lack of results from traditionally successful vehicles

In addition to increased budget scrutiny, marketing vehicles that were the 'old standbys' in the past are no longer viable, or are uncertain. There is a lot of confusion about the best way to spend marketing resources. According to a recent study of pre-IPO technology companies by Launch Pad, (a California-based incubator) advertising, trade shows, direct marketing, and promotional investments are falling out of favor; while public relations, corporate web sites, and collateral are considered the most effective investments. It is interesting that the tools which are passive, less predictable, and least likely to generate new leads, are the areas considered most effective.

Advertising can be an excellent vehicle to promote brand, generate awareness, or promote visibility. However it is very difficult to show how your products solve a tangible problem and what the return might be. Participation at trade shows has been dropping since 1997, and with the current state of travel, this situation is not likely to improve soon. Direct marketing (mail or teleconferencing) isn't generating the expected results, nor do many IT vendor marketing executives have much effective experience with these vehicles. New technologies such as webinars are promising, but bandwidth limitations are proving them to be more of a distraction than an effective marketing vehicle.

As the pressure mounts, executives are searching for marketing vehicles that produce results. However, despite their efforts, each path they pursue seems to be a dead end.

3. 'Sales is from Mars, Marketing is from Venus'

Sales and Marketing professionals typically have very different perspectives on market development, and at times can feel like they are speaking different languages. This often results in Marketing having poor credibility with the salesforce making it difficult to get Sales to engage in, or cooperate with marketing programs. Even when Marketing tries to reach out and ask the sales force what they need to be more effective in their jobs, the results are often disappointing. Either Marketing has a hard time understanding what Sales needs (resulting in a frustrated sales force), or Sales will make vague requests ('I need a white paper') and then complain upon delivery that what was produced is not what they asked for (resulting in a frustrated marketing organization). And these problems are in the firms where Marketing and Sales are trying to work together. In many companies, Marketing thinks the sales organization cannot sell, and Sales thinks Marketing is a complete waste of money.

4. Sales is not following up on the hard fought leads generated

Considering the effort and resource it takes to generate leads, it can be extremely frustrating to watch how leads are often handled. In a recent Harvard study of marketing executives, they found that as much as 80% of all leads produced are never acted upon by Sales. This is usually a symptom of the 'credibility issue' mentioned above--sales people assume that leads which come from Marketing are poorly qualified and will be a waste of their time. Considering typical conversion rates for the leads which ARE worked, it's nearly impossible to achieve any return on marketing investments in lead generation unless this problem is rectified.

To make matters worse, most marketing organizations do not know how many of the leads they produce are actually being followed up on by Sales. Once a lead is produced and handed over to Sales, it is often never heard from again. Without an effective lead tracking process, it will be very hard for a marketing organization to demonstrate its contribution to that (or any) sale.

To summarize, marketing budgets are under increasing scrutiny and executives are being asked to contribute more to the sales effort. But, the tried and true marketing vehicles that have been effective in the past are not delivering the same results. Marketing executives are struggling to identify the programs which will produce the best results. Yet, regardless of what they do, they can't make a positive impact on sales if they don't improve their credibility enough to get Sales to engage in the process.

Understanding how Sales sells, and customers buy

Why does Marketing find itself facing the seemingly impossible task of contributing to the bottom line with fewer resources, less effective vehicles, and no support from Sales?

The problem can be broken into two basic categories:

1. A lack of understanding of the customers' buying process

There is a major disconnect between how large (Global 2000) companies buy IT products and services and the way they are marketed. To begin with, any vendor selection typically involves a variety of stakeholders. Depending upon the offering, these stakeholders may include: a selection committee, an executive sponsor, a project manager, architects (enterprise, software, and infrastructure), technical specialists, and end-users. Each one of these stakeholders will evaluate the merits of your offering from a different perspective, and against different criteria. Marketing materials should (but rarely do) help these various stakeholders evaluate your offering in their specific context (i.e., help a network specialist understand if/how the network will be impacted). Without the appropriate information, these stakeholders will demand more resource from the sales executive--or even worse, get information from other sources that threaten your influence in the buying decision.

In addition to identifying the people involved in the customer buying process, we must understand what aspects of your solution each will want to analyze. For example, companies often review the total cost of ownership (all the investment costs required to solve their problem with your solution along with the ongoing operational maintenance costs), how scalable your offering is, and how well it conforms to the companies existing architecture and infrastructure. Perhaps most important, if the money is not already in the budget, they will examine how critical the problem your offering addresses compares to other problems the company faces. This point is often overlooked, as most marketing materials are geared to a buyer who has already determined he needs what you are selling. Very often your competition will not be another provider of your solution, but a completely different way the company might use the money.

Another factor to consider is that organizations have different sensitivities at different stages of the buying process. Very early, the focus is on identifying the business problems associated with your offering. However, over time the focus will shift to issues such as price (what you charge), to identifying the 'whole' solution (all the resources required to execute your offering), and to risk (what happens if...). Since prospects never go through all of these stages in a single meeting, tools should be designed to help your customers achieve the milestones necessary to advance to the next stage in their buying process.

All too often, the extent of marketing tools created to support all of these variables will include: a corporate brochure, a technical white paper, a product brochure, product specification sheet, and a product demo, all designed with an eye to a technical audience and focused on the features of your product. These deliverables fall short of meeting the organizational needs, and therefore the onus is placed on the sales rep and his/her champion within the account to articulate the benefits of your solution for that given organization.

2. Marketing's limited understanding of the sales process

A solid understanding of the sales process is critical for any marketing executive. Everything that Marketing does should support the range of ways in which the company engages with prospects. Consider brand development. Your sales force communicates your brand with the prospects they meet. As a whole, they have a greater influence over the perception of your company than Marketing does. Marketing cannot control the message, as each sales person has their own sales presentation, writes their own letters, and has their own conversations with customers. Additionally, as mentioned earlier, the success of many marketing programs requires the participation of the sales department.

The best way to establish credibility with the sales organization is to demonstrate a firm grasp of the sales cycle, and to predict the kinds of resources that would be helpful at each individual stage. While sales people tend to focus on deliverables such as white papers, sales presentations, and product collateral sheets, there are a wide variety of tools and resources they require. These include: custom engagement tools, assessments, need creation and identification tools, internal selling tools, ROI calculators, prospecting vehicles, buying vision aides, follow up letters and e-mails, account profiling tools, objection handling statements, compelling data points, reference stories, business problem training, etc. It's nearly impossible for Marketing to identify which tools are needed, or even to understand what Sales is asking for when they make a request, without an understanding of the sales process.

Another common source of misunderstanding is the time sensitivity issue. Sales people would often prefer to get a ?work in progress? they can tweak for a given account, than to wait for weeks while the final deliverable is polished and fine-tuned. As another example, many marketing departments will wait until all leads from a given campaign are processed before turning them over to Sales. This can take up a month, during which time the prospects have likely forgotten why they were interested in the first place. In order to establish credibility, Marketing needs to demonstrate the level of urgency commonly associated with Sales.

Finally, on the topic of leads, the 'worst case scenario' can often be when Marketing qualifies the wrong type of stakeholder as a lead. For example, a low-level technology person (no matter how interested they claim to be) is more likely to be a 'tire kicker? and consume valuable company resources to educate them on your offering. A sales person would rather work with people with decision-making authority than waste valuable time with someone who is not in a position to buy.

Cultivate your prospects into clients, don't solicit them

Marketing has a tremendous opportunity to help their organizations develop more predictable, higher-value, and accelerated revenue streams. To do this, Marketing should develop structured and measurable programs, campaigns, and tools which add value to prospects while advancing the sales cycle.

Focusing on the buyer is the key differentiator between effective and wasteful campaigns. If a salesperson's role is to facilitate their customer's buying process, then Marketing's role is to help Sales engage new customers in buying discussions and to help keep existing prospects engaged. Focusing market development efforts on the customers buying process by design will do just that.

Too often, marketing materials go for the jugular. However, as discussed earlier, IT buyers go through a series of phases and involve different people throughout the buying process. Therefore, break down their buying process into a series of steps and create the right materials and programs for each one. For example, a program to make decision-makers aware of their problems is dramatically different than one helping them figure out how to solve that problem. Both of these are required stages before a customer will buy a solution, yet most marketing programs assume they are past these stages and ready to select a product. All that does is make them feel 'sold to' and confused, and confused prospects never buy.

With the customer as the design-point being the pre-requisite, there are five critical success factors to effective programmatic marketing campaigns:

1. Have a finite, specific, and measurable purpose

As we've said, complex buying processes go through stages. Marketing should identify the typical stages their customers go through in making a buying decision, determine their customer's needs throughout the process, and establish specific objectives and milestones in each stage. This allows you to create the content your customers need to achieve each key milestone and advance their buying process. Additionally, it allows you to set up performance measurements, which will help you steadily improve each program, capture performance metrics, and communicate your results internally.

2. Add value to your customers or prospects

Many sales methodologies and training programs teach sales people that their job is not only to communicate the company's value proposition to the prospect, but process. However few sales people have the expertise to be able to be a ?value add? on their own. Rather, it should be Marketing's role to provide tools which Sales can use to deliver value while interacting with prospects.

The most common way for Marketing to help Sales 'be valuable' is to provide them resources for educating customers and prospects. If a sales rep can be seen as being thought-provoking--helping a prospect understand a complex issue and how it impacts their company--rather than 'salesy', the rep will gain more credibility with that prospect and be in a better position to facilitate the buying process.

3.    Enable sales people to uncover and diagnose business problems

Whether we care to admit it or not, people buy from people. Sales people play a key role in market development efforts. All of the emotional drivers learned in business school are secondary in a business-to-business sale. Organizations buy solutions to business problems. They do not buy software, consulting offerings, or services. They are investing in your firm to realize the benefits of your solution. The better you can equip your sales people to find business problems and bring them to your prospects? attention, the shorter the sales cycle and the larger the average deal size.

4.    Have tangible impact on moving accounts through stages of the sales pipeline

The sales funnel is the lifeline of any company and should be a focal point throughout the organization. Most marketing dollars are invested to create awareness or generate leads, and focus on filling the top of the funnel. However, these investments should be more balanced across all stages of the funnel because incremental improvements in each stage of the sales process can have multiplicative effects on revenue. For example, if you have a five stage sales process and you improve the percentage of opportunities that advance from each stage to the next by 5% points, you can more than double your revenue. Plus, marketing campaigns focused on supporting later stages in the sales process serve to reduce the sales cycle time and increase close rate, which are much more likely to impact revenue than generating more low-quality leads.

5. Arm your advocates inside a prospective account to sell for you

It is estimated that up to 80% of the buying decisions about your offering are made without a representative from your company involved. With that much of the decision on the line, how are you equipping your internal champion to accurately represent the compelling business solution you are providing? Sales people, who present your offerings every day for a living, have a hard enough time incorporating all of the key selling points of your solution on each sales call. You must provide concise and topical materials that will help internal advocates make your offering relevant to that organization.

 ©2003. Blueprint Marketing. Ashburn, VA. All rights reserved.

Learn more about successful go-to-market strategies at Pragmatic Institute's Market.

Categories: Go-to-Market Working with Sales
Scott Santucci

Scott Santucci

Scott Santucci is a leading expert in developing business development execution models for B2B companies to help improve their sales and marketing effectiveness. A former META Group executive, he founded BluePrint Marketing in 2002 where he has developed a business development framework based on unparallel access to G2000 technology buyers and the vendors who provide services to them. Santucci has worked with such organizations as: Unisys, Sungard, Bearing Point, and BMC. Contact Scott at scott.santucci@blueprintmarketing.com

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