Posts Tagged ‘CRM’

5 Sales Challenges Faced By B2B Startups – A case study

Wednesday, December 3, 2014 @ 02:12 AM
Author: John Smibert

Startup

 

Startups who sell to large enterprises often find “selling” a challenge.

I recently observed a classic example.

A startup went from near failure to solid turnaround in less than 12 months by identifying and addressing five key sales issues. This new startup – led by Susan, a very impressive young entrepreneur – had introduced a new energy product to market. The product had the capability of disrupting a number of industries. And yet, despite the compelling product, they were struggling to make sales. Why?

Susan and her team had outstanding design and product development skills. However only one of the team members had any B2B sales experience. They had closed a number of small opportunities. However they needed to win some large orders to gain market share and credibility. Unfortunately they had recently submitted eight significant proposals including three large tender responses with no decisions in their favour.

It was devastating.   Susan and her team had been convinced that their product should sell more easily. It was groundbreaking technology. They had thought that if they got in front of the right decision-makers in their target customers and show off their product – and what it could do – they would generate orders.

They had done one thing well. A good marketing organisation had helped them write three Unique Selling Propositions targeting potential clients in three industries. And they went knocking on doors with these.

And it seemed to work. By leveraging the networks of their chairman and investors they had got in front of key people in a number of organisations. They conducted many demonstrations of their product – feature, function, benefit! They were asked to submit proposals or tender responses. But then the opportunities seemed to stall or they got a simple ‘no thanks’.

Pretty soon they found their pipeline of opportunities had dried up and they had to start finding prospects all over again

Susan’s investors needed to understand why they were not closing these opportunities. They arranged to have it investigated. As a result 5 key needs were identified and changes were implemented accordingly.

 

 The Five Sales Challenges

I am sharing these five sales issues – and what was done to address them – because I expect some of these might apply to other startups struggling to sell B2B.

 

1. The need for a sales process

Susan’s team had not thought of ‘Sales’ as a discipline like Financial Management, Marketing and manufacturing. In each of those disciplines they had implemented strict processes and methodologies – but not for Sales.

They had no way of assessing where they were in a sales opportunity and how effectively it was progressing. As a result they were pouring resources into high risk opportunities or ones which were not likely to progress for months or years.

They were performing sales activities in the wrong sequence. They had regularly demonstrated and proposed their product before they understood the customer’s business drivers and timelines. They had regularly wasted time selling to individuals who had no power to make a decision.

As a result they had missed the mark or invested selling resources into organisations that were not ready to buy. In the meantime opportunities that may have had a better chance of progressing had being starved of resources.

 

The solution?

With help from a specialist they defined a six stage sales process that made sense for their type of sale. They also adopted methodologies to be applied during the process. These helped them systemise activities like:

  • How to get better insight into individual prospective customers,
  • How to more effectively engage with the correct people
  • How to assess opportunities in order to decide in which ones they should invest their meagre resources.
  • How to create a strategy for winning a competitive opportunity

The most significant lesson Susan learnt was to be selective – qualify hard – don’t waste time on opportunities that were unlikely to be winnable or were not ready.

 

2. The need to sell customer outcomes – not the product

Many startups think it’s all about promoting their ground-breaking product – but it seldom is?

Customers invest in outcomes not products. In most of Susan’s sales opportunities the customers were excited about the product but could not visualise the value for their business – or the risks were unjustifiably high. In their mind it didn’t warrant upsetting the status quo.

Susan and her team had not done enough customer specific research. They had not understood the customer’s unique business drivers. They had not discovered the specific value – that a change they could drive to the customer’s business – would produce.

 

The solution?

Susan’s team implemented a ‘discovery’ step early in their sales process. This ensured they fully understood the customer needs, challenges and opportunities. And they learnt to religiously complete this step before they discussed, proposed or demonstrated their product. They realigned their selling focus on customer outcomes – the customer specific value proposition.

As a result the dialog made a lot more sense to the customer – they were able to fully comprehend the value to their business.

Susan’s team were also able to extend this philosophy into their ‘social selling’ activities. They engaged earlier and more effectively with the customer by dialoging and sharing content based on outcomes and not product. They avoided promoting product or company via social media and forums and just delivered ideas and insight that was of value to their target customers. Their brand credibility grew considerably and customer engagement became easier.

 

3. The need for a sales system

No customer data management system had been adopted. Information about prospective customers was captured piecemeal in emails and spreadsheets or was maintained in the heads of the team. Collaboration across the team, relative to an opportunity, was haphazard at best. Tasks were falling through the cracks. A lack of process also meant that dialog across the team was not productive. There was no common sales language or understanding of the status of an opportunity.

 

The solution?

It was decided that a simple cloud based CRM should be adopted – one that focussed on assisting the team to sell more effectively and efficiently. The new sales process was incorporated into this CRM system. As opportunities were qualified and moved from one stage to the next this was reflected in the system. Everybody could see the status and what was to be done next. All customer information was available to all.

They also implemented a simple collaboration system – integrated with the CRM system – which helped the team work together more effectively and innovatively on sales opportunities.

 

4. The need to systematise sales management

The only sales management system they had previously implemented was a rudimentary forecasting system. And because of the lack of a sales process and qualification methods the forecast was dreadfully inaccurate. Also their financial system tracked revenue but not sales so they had no way to easily forecast revenue (or cash) from existing orders – let alone forecasted orders.

Informal sales reviews were being conducted weekly – at a team meeting. The purpose was to try to understand the sum of all the opportunities they were working on and where the roadblocks and the priorities were. Because their was no sales process or formal sales database this became very tactical in nature.

There was also no way to plan and allocate selling resources, Because these resources were utilised across both development and implementation – as in most startups – resources were being pulled from pillar to post – often with no notice. The person with the loudest voice tended to get the resources whatever the priority.

 

The solution?

Susan implemented some simple sales management principles.

The sales pipeline would be reviewed by the team on a weekly basis. Opportunities would be prioritised based on the stage they were at, and on what was needed to progress them. Roadblocks were assessed and workarounds implemented where it made sense. Most of the information required to support this meeting, was now available via the new CRM system. The number of opportunities being worked on at one time was deliberately limited – even if it meant withdrawing from some. This focussed the resources and increased the win chance.

 

5. The Need to improve Sales Skills

It had become very evident that the team did not have enough sales and sales management skills to sell and manage effectively – even after implementing the previous 4 changes.

Susan and her charman decided to implement a development program for their key people. They also decided to add to their sales capability by employing an experienced salesperson and moved the current resource to develop channels..

Susan was concerned that a one off sales training program would not be the solution. She recognised that most of what would be learnt at a workshop would be forgotten when they got back to work.

 

The solution?

In conjunction with an adviser, Susan implemented a six month change program. The team was trained and then coached through regular reinforcement sessions. What they needed to learn would need to become habitual.

The development program was built around the new sales process they had adopted. Particular emphasis was put on the customer approach, the discovery, developing a customer value proposition, demonstrating value, authenticating their claims and negotiating. All this was about selling customer value – not selling the product features

This program is still being rolled out however the returns are already evident. The team are working on less deals and winning a higher percentage. Their resources are less stretched and better planned.

There have been significant changes in customer facing behaviour resulting in much more effective customer engagement by focussing on their business outcomes.

Susan also employed a coach to assist her in her sales management activities. This included setting up sales measurement systems, incentive programs, lost sale analysis, opportunity strategy development, progress reviews and salesperson recruitment.

 

Conclusion:

Susan is delighted with the impact of the changes:

“Just by implementing a sales process – and focussing first on discovering the customer needs, challenges and opportunities – we quickly became laser focussed on how to achieve customer outcomes versus selling product. We are teaming better and applying resources more productively. We are much more strategic in our pursuits.

“This has resulted in closing one very large deal that had previously stalled. We are also now positioned well to win 4 others very soon – 3 of whom previously said no.

“I am much more confident in our future than I was 12 months ago”.

The issues Susan faced may be different to the ones you are facing. But the process she went through to identify them and then address them may well be of value to you.

I hope this gives you some food for thought – and impetus for action!

Please share your experiences below or contact John Smibert

 

 

Managing Decision Lead times in B2B Sales

Wednesday, February 26, 2014 @ 02:02 AM
Author: John Smibert

What are you like at forecasting?  Sometimes a little guesswork? Too many decisions slip?

Forecasting is directly related to managing your pipeline.  And managing your pipeline is all about progressing your opportunities through the pipe to the close.

But one of the key issues with managing progression to the close is delayed decisions. Sound familiar?

How can we avoid delayed decisions? Understanding the customer’s Compelling Event is the secret. And then planning our sales activity around that event.

I would venture to say that seldom is a decision is made unless there is a compelling event – even if there is a compelling need. So if you cannot identify perhaps you should not forecast the sale.

Jill Konrad (@jillkonrath) calls them ‘triggering events’ – I like how she expresses it in this short 3 minute video.

Would love to get your thoughts and experiences – please comment below.

The top 6 sales behavior misconceptions

Thursday, July 11, 2013 @ 04:07 AM
Author: John Smibert

Business Presentation

According to Carpe Diem “Only 9% of Australasian B2B ICT sales reps display best practice”.

A white paper just released by Carpe Diem Consulting raises some interesting questions about the practices of salespeople.

It also raises some key misconceptions they claim salespeople have regarding good sales behaviour.

You can download the full white paper from Carpe Diem Consulting.

I suggest that you read the survey results with some care as we suspect that  the questions were phrased in a way that will help Carpe Diem to position CEB’s ‘Challenger’ philosophy and their consulting services.  However that said ‘The Challenger Sale’ has a lot of merit and the white paper raises some interesting questions. It provides some insight into  perceptions that we salespeople have and need to reflect on. It is worth a read.

One issue is that the paper takes a very black and white view – I suggest there are shades of grey.  What do you think? Do you think these perceptions are an issue? Please comment below if you have a view.

I have briefly commented on each of the 6 sales behaviour misconceptions as postulated by Carpe Diem:

1. Is building relationships important for success? 87% believe it is.

Carpe Diem’s view: They debate this saying the focus should be on challenging the customer.

My thoughts: I believe building relationship and challenging the customer are not mutually exclusive, in fact they are related and both are key to success. Challenging the customer, if well founded with sound research and good insight, will in fact help build trust in the relationship. And a good relationship will help you challenge with credibility.

2. Is sales a numbers game?    72% believe it is.

Carpe Diem’s view: They claim that these salespeople miss the point – they say “The key is to stop ambulance chasing”, get in early, disrupt the customer’s thinking with insight and thus increase your win rate by reducing the number of lost deals.

My Thoughts: I totally agree with Carp Diem. Getting in early and influencing with insight is essential. And then if you cannot get traction getting out early is even more vital. Spending time on opportunities that are going nowhere is the biggest time waster in my experience.

3. Is responsiveness and attention to detail key to winning?    91 %  said it was.

Carpe Diem’s view: They again debate this.  They say “the real sales winners are the ones that can change the customer’s way of thinking. Engaging early and challenging the customer to change their way of thinking produces conflict but steers the prospect towards your company’s unique strengths.

My Thoughts: I agree with Carp Diem however again they are not mutually exclusive – if you are not responsive or screw up on detail you will badly impact your relationship which in turn will reduce your influence – thus impacting your ability to change the customer’s way of thinking.

4. Should the salesperson’s goal be to remove any conflict from a sales situation?   64% said it was.

Carpe Diem’s view: Avoiding conflict does not allow you to engage with the buyer early enough on the buyer journey. They imply that the important activity of challenging the customer will create conflict and is unavoidable.

My thoughts: I am not sure how Carp Diem define conflict.  Challenging the customer should not create conflict if done with tact and good intent.  Also good salespeople are good conflict managers.

5. Does future sales success depend on personally following up all pre-sale promises? 87% said yes.

Carpe Diem’s view: They argue that follow up is essential but it is not the salesperson’s job.

My thoughts: An interesting question that prompts me to say “It depends”.  The salesperson’s relationship with their customer  is dependent on a trusting relationship between companies.  That trust will be broken if the company does not meet its commitments.  That said it is not the salesperson’s role to manage delivery or get dragged into delivery activity.  However a salesperson who walks away and totally trusts their delivery people to meet all the commitments without intervention is living in a fools paradise. There is grey area there.

6. Should salespeople actively keep the customer moving through the buyer’s journey?     32% said yes.

Carpe Diem’s view: Following the purchasing process as defined by the buyer is dangerous. It can get stuck.  I think they imply that there are times when we need to challenge and influence change to the buyer process.

My thoughts: I totally agree.  Firstly we need to be totally cognisant of the buyer’s process.  And then we should be exploring where it needs challenging and where appropriate driving change in that process for the good of the customer.

 What is your view – please comment below.

Is the B to B salesperson being disenfranchised? IBM is not alone.

Monday, May 13, 2013 @ 08:05 AM
Author: John Smibert

When the IBM CEO Ginni Rometty recently blamed her sales force  for missing the company’s results it should ring alarm bells for salespeople.

IBM_Ginni_Rometty_at_the_Fortune_MPW_Summit_in_2011

(Photo of IBM CEO from Wikipedia)

It seems that the B to B salesperson is being disenfranchised. Advances in buying practices and tools have disinter-mediated the selling process.

  1. Customers perceive that they get limited value from salespeople

McKinsey research shows that enterprise buyers do not perceive value from salespeople and want to see less of them. This is reinforced by Brent Adamson and his associates writing in the in the Harvard Business Review

  1. Sales forecasts are consistently not being achieved

Company reports have too regularly blamed poor forecasts for poor financial performance.  No longer can the GFC be blamed. Can we blame the company’s sales system and process? Can CRM be the problem? Or is it the salesperson’s fault?

  1. CEO’s do not trust their sales forecasts, and lack faith in their sales people

It is becoming a common cry of the CEO’s. A classic example was the public criticism by the IBM CEO of her own sales organisation. And there are a flood of other CEOs with similar cries. In a Forrester post by George Colony he states CEO’s had “scathing feedback” about their sales force.

  1. The Marketing and Sales relationship is dysfunctional

Marketing blame sales and vice versa.  But the only the customer can give us the true status – and without delivering a valued buying experience we won’t find out that status.
How can the salesperson win back the trust of the customer and that of their own company executive?  How can they interact more effectively with marketing? And most importantly how can they regain control of their own destiny?

Whatever the answer I suggest it will need to enable the salesperson to gain the ability to positively change the customer buying experience every single time they meet – and particularly at the first contact.

Am I right? What are your thoughts?

Best Practices at Leveraging Relationship Value

Thursday, May 3, 2012 @ 04:05 AM
Author: John Smibert

Best Practices at Leveraging Relationship Value

By John Smibert   (www.custell.com)

I am often asked about ‘best practices’ relative to leveraging relationship value. At a recent executive meeting I witnessed the outcome of the application of relationship ‘best practices’.

The CIO was presenting the three year progress scorecard of one of their ITC outsourcing relationships.

The value leveraged by both parties was impressive — substantially reduced costs; improved service levels; highly satisfied users and staff and a strong endorsement from the business units who are their customers.

To achieve these results they had jointly implemented a number of management programmes with their service provider.  These comprised some best practice processes, frameworks and training to address:

(i)  Partnering,

(ii)  Business alignment,

(iii) Innovation and value,

(iv) Relationship benchmarking, and

(v)   Governance.

The two organisations had teamed effectively and achieved outstanding   results over a three year period.

Customer Perception Case Study

Wednesday, September 22, 2010 @ 12:09 AM
Author: John Smibert

RELATIONHIP VALUE MANAGEMENT IN THE SERVICES INDUSTRYFujitsu Logo

 

Company:                        Fujitsu Australia Limited

 

Type of Business:                   IT Managed Services.

Timeframe:                              2001 to present

Issue:      “One on one” management and improvement of the perceived relationship value by “Blue Chip” customers.

Although retention of key customers was good in year 2000 and 2001 Fujitsu wanted to ensure it stayed that way.  There was a risk that a significant proportion of customers may go to tender at the conclusion of the contract term therefore raising costs, putting pressure on margins and increasing risk of loss of accounts.  In addition a key Fujitsu objective was to grow revenue from the existing customer base.

Customer Satisfaction Surveys were not the answer.  Over recent years Fujitsu had conducted customer surveys with key accounts at the executive and operative management levels.  These were designed at the enterprise level and had created good value for product development, services management, and marketing. However the results were limited for the “One on One” account relationship.  They did not assist the account manager (or the customer) to consistently monitor and improve the relationship. 

Balanced Scorecard. In addition the company had decided to implement a Balanced Scorecard methodology and needed more meaningful customer perception measures for select “Blue Chip” customers to complete the “dashboard”.

Analysis:   In early 2001 the previous conducted customer surveys were reviewed to determine why they had been less effective than desired.  The following key issues were identified:

  1. The executive surveys were done exclusively by external parties which, aside from being expensive, they insulated the account teams from the full extent of the customer response including emotion and body language.
  2. The survey methodology was too large and cumbersome and not specific to each customer relationship resulting in lack of buy in from both clients and account management.
  3. Being annual surveys they were not conducted regularly enough resulting in key issues and trends being identified too late to be addressed in a timely manner.
  4. There were varying measurement methodologies and questionnaires. This meant it was difficult to benchmark and measure progress one on one with a single customer relationship.
  5. There were no customer satisfaction KPI’s set for the account and delivery teams therefore it was difficult to hold people accountable for customer satisfaction in an objective manner.
  6. It was difficult to capture and prioritise customer specific recommendations to improve the relationship.
  7. The follow through was sometimes lacking therefore the customer often felt they were not being listened too.

 

Solution:    A Customer Scorecard program comprising new process and methodology was implemented to address these issues. It comprised the following items:

  1. A small value based benchmarking scorecard comprising 15 measures across three categories ensuring that top of mind customer recommendations for improving the score were captured.
  2. A value scoring methodology that is simple and easily understood ensuring consistency over time for benchmarking purposes.
  3. All benchmarking scorecards were to be conducted face to face and with the relationship manager (or delivery manager) in attendance as an observer.  This proved effective in gaining strong support from the customer and was illuminating for the relationship manager.
  4. A simple system that captured the scorecard data and provided vivid reports that highlighted exceptions and trends.
  5. An action planning workshop guide that assisted the account team to develop action plans in response to the customer recommendations.
  6. A customer communications plan that demonstrated that the company was listening to customers with action (without creating unnecessary work for the account team).
  7. A six monthly scorecard cycle.  This was a short enough period to ensure any negative change in the perceived value of the relationship was captured from individual customers in time to take corrective action.  At the same time scorecards were conducted long enough apart to ensure it was not too onerous on the customer or the account teams.

 

Outcomes:         

  1. Incremental revenue from existing key customers lifted by more than 15% each of 2 years
  2. All participating customers were retained and indicators for customer retention were improved.
  3. Over four scorecard cycles had been completed at the date of writing and there had been a steady improvement in customer satisfaction scores.
  4. Two significant enterprise wide issues were identified and addressed resulting in a positive response by customers.
  5. Customer feedback indicated that they are delighted with the program and see it as a significant one to one channel of communications with their provider and a means to improving the value they get from them.
  6. Support from account teams moved from skeptical to supportive. The have accepted responsibility and accountability for customer satisfaction and loyalty.

 Testimonial

“The Customer Scorecard model we implemented in 2002 has provided Fujitsu Services with a simple but effective tool to continuously measure and improve customer perceptions.  At first I was a little sceptical that a short 15 category benchmark would capture all recommendations necessary to address satisfaction however this was quickly dissipated.  A good test came when we conducted a Scorecard in parallel with a traditional 150 question survey.  The messages from each were almost identical.  The scorecard model continues to be a winner for us” 

                    Peter McFarlane, Executive General Manager, Services, Fujitsu Australia.

                                                                            ***************

 Custell develop and implement customer intimacy programs for business to business service providers.  (Refer www.custell.com ). Contact custell.


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