« November 2007 | Main | January 2008 »

December 21, 2007

Are You an Ostrich?

Aussie Emu

I remember the first time I ever heard of the internet. It was back in the 90’s and I was serving as the President of the New Hampshire Chapter of the Society for Training and Development. One of the board members told me that we needed to start looking at how training would become impacted by the internet. I think I said something really profound like, “what are you talking about?” At the time, ironically, I was working for Digital Equipment Corporation, who was responsible for building a good portion of the infrastructure for the world wide web. However, I was not quite ready to embrace the possibilities of what that www acronym would come to be - my how things have changed.

While I don’t really like to think of myself as a technophobe, I don’t think that the people who know me would describe me as a technophile either. And while I had trouble understanding the ramifications of the information super highway 13 years ago, I do understand a few things about it now. It has changed the way people buy. But, I am not talking about ordering used books on Amazon, I am talking about everything.

Yes, it took me a long time to get it. However, it is taking others longer, and that is what demands some attention. No matter what the it is that you sell, there is information about it on the web, there are people researching how to buy it on the web, and your competitors are attempting to attract those prospects to themselves before they find you. And what is even more profound about all of this is that even if you are not attempting one ounce of effort to do business on the web, your customers are talking about you. Your products and services are rated, your prices are quoted, and happy and unhappy customers are sharing their feelings about you.

Welcome to Web 2.0.

What I find astounding is that I have customers who still believe they don’t need to pay attention to this. They still think that their prospective customers will find them at a convention or will be waiting idly until a sales person shows up at their doorstep. I have clients who have customers who know more about their products than their sales and services people do because of the research they have done on the web and the people that they have interacted with who are also customers. Something has to be done about this ostrich behavior.

For those of you out there who don’t think this whole internet thing applies to you I say – get ready. You need to be prepared, because even if there is only a little bit of business done via the internet regarding your products or services, it is going to increase faster and further than you ever expect.

If you do recognize this as a requirement for conducting business today, the better question is what can be done to be more ready for internet driven business development. It is easy to recommend that you develop an internet strategy. Below are a few other readiness factors to consider.

Optimize your findability – We all know about search optimization, but are you doing it? There are a number of new rules for improving your visibility on searches, which I won’t get into here. It is important to follow those as it will drive business to you. But don’t be confused about this – just because somebody comes to your site it does not mean they are ready to buy. It is critical to do everything you can to drive activity to your site, but you also have to create reasons for people to stick around.

Nurture your prospects – Don’t expect that you can capture a prospect visit to your site and convert it to a lead that is ready to hand off to sales. You will more than likely drive that prospect away. It is better to offer them more information electronically, such as an opportunity to download a whitepaper. Once they have been window shopping adequately, you can hand them to a sales person for more active pursuit.

Go both ways – One of the new rules of Web 2.0 is that you don’t just push information one way. Interaction is key and can happen in many ways other than e-mail, such as chat, and blogs. This may require some experimentation before you make it work effectively, but it is key.

Age matters – My septuagenarian in-laws run a business using e-bay, which is proof that the internet is not just the realm of Generation Y. However, I do see that my under-30 business colleagues have a different way of thinking about the web – it is more innate to their way of acting. If you don’t have professionals under 30 who are helping to guide your internet strategy, you are leaving out a very critical point of view.

Immerse yourself – If you are not regularly working on the web to learn about other businesses, you are not getting a full appreciation for how prospects are learning about you. It is OK to assign the under thirties to the tasks above, but you too need to really understand what this is all about. Read more blogs and do more searches and get active with it. Research your customers; watch what your competitors are doing; do the social networking thing. Get that head out of the sand.

December 14, 2007

How's Your Funnel?

Maidenhead

Everybody talks about the pipeline. Progressing deals along the continuum from lead to close, including the sacred forecast, it is the focal point of many CRM programs. No question that it is a big deal, with billions of commission payments at stake. OK fine, I’m on board.

But, what about the funnel? Maybe, this term is not in your normal lexicon. In addition to the concept of the opportunity pipeline, some organizations like to also think about having a funnel of leads that help to fill that pipeline. Probably the word hopper would be a better term here, but the funnel seems to be the accepted metaphor.

I tend to think of the funnel as the marketing portion of lead management and the pipeline as the sales portion of lead management. The pipeline gets a lot of attention, but the funnel is what feeds the pipeline, and a big cause of why the pipeline may not be full. Most companies have some sort of funnel – a way to pull in leads that are eventually handed off to the sales organization. Unfortunately, there are too many elements of the lead funnel that get neglected. Let’s look at some examples.

Probably the biggest problem in the funnel is the tendency for pushing leads through too fast. You get someone to stop by your booth at a trade show and they indicate an interest. That is a lead that you can choose to send along to the field force, or you can make sure it is ready. Based on my research of the research (and personal experience with my clients), 80% of leads are sent to the field before they are ready – which means they are wasted and lost.

This problem is due mostly to the fact that most marketing organizations don’t have an agreement with the sales organization as to what constitutes a lead that sales has found to be acceptable. Leads that they can purse as opportunities are to be considered ready. Leads that don’t cross that threshold are not. This does not mean they are bad, but it means that they are not ready, which leads us to the next problem.

Nature versus nurture – which do you believe? If a pair of twin leads were separated from their mother at birth and raised independently what will drive their success, their genes or their upbringing? We have learned it is pretty much all about the upbringing, which the lead management gurus call nurturing.

Most organizations do absolutely zero nurturing and this then translates into something like 80% of their very expensive leads are thrown away. Nurturing means that you take a green lead, that person who indicated an interest by downloading a whitepaper, and offer them a webcast or invitation to a local event. They may not be ready to buy at first, but they may be totally ready to hear more. After hearing more, they may be ready to buy – which means the nurturing worked. This is a far superior situation than forcing the lead to sales immediately just to find out they are not ready and please don’t call again.

Gravity in the funnel is the key. The problem with the web today is that it is easy for people to find you – even if you are not trying very hard. Then, you get excited because somebody came to your website. Remember, just because somebody visits your site, it does not mean that they want to buy. Go back to the previous paragraphs – they probably need nurturing. But, what do you do when you start attracting people to your site? Pull them in, but for the right reasons.

If you sell toilets, don’t give away iPods to attract people into the funnel. Give away a really, really compelling article on why your toilets never clog. That will provide the gravity to bring in the prospect that your field sales folks want to talk to. They don’t want to talk to people who want free mp3 players. My kids use toilets, love free iPods, but have no intention to buy a toilet that does not flush. Content on your site, like a good white paper, is one of the best means for creating positive gravity. Pull the right prospects through your funnel and into the pipeline. Let the rest of the riff raff hit your site then swirl away if they don’t truly intend to buy.

December 07, 2007

Deal or No Deal?

Saturday Market

Many times in the past on this site I have posted entries that have started out with words like, “I recently read an interesting article about…”, or something to that effect. But this is not one of those postings. In fact, it surprises me that I have not run into any written point of view on the topic of this posting.

And one other disclaimer – it is going to appear on the surface that this is all about the life sciences industry. But, if that is not where you reside, read on – this may still be relevant for you.

Salesforce automation has had some significant difficulty proving its value in the life sciences industry. I think the core of this issue lies in the disconnect between how these sales professionals sell and how SFA software is designed.

At the heart of SFA software is the pipeline, tracking opportunities as they transform one stage at a time from lead to close. The software, if it were to have a personality, really likes to behave this way – moving deals along a progression of activities until the ink is on the contract. Everything hinges on this, planning, forecasting, activity tracking, and coaching.

Unfortunately, this is not how most of the pros in the life sciences industry sell (as well as many other types of organizations that do not follow a deal progression model). If you sell acid blockers, stents, or dental amalgam, you don’t get a lead, work a deal, and close a sale. Rather, you educate, nurture, loan, demonstrate, coach, and reward a wide variety of healthcare professionals until a physician, dentist, clinic, or department becomes regular users or prescribers of your product. There is no deal; there is a relationship lifecycle. This is at the center of most of the business models within the life sciences industry, but it is not limited to that industry alone.

SFA is not built this way. It is built around deals. As a result the disconnect hampers the value of the software that can be derived by the field force. So, this begs the question, what can be done?

I think it is useful to start with sales operations. Recognize the disconnect and become very explicit about describing the progression of the relationship with the individual medical professional or the medical account (hospital, clinic, department). Build a relationship maturity model. I see typically four stages – trial, adoption, commitment, and advocacy. And, yes, these stages are product dependent. A physician can be at the commitment stage with one drug and at the trial stage for another.

Next, it is critical to configure your SFA tool to reflect these stages of the relationship and not the out of the box opportunity design. This works better for the sales folks conceptually, and allows them to utilize the software more practically – driving up adoption and value. One fly in the ointment is for those medical device companies that sell both ways. If you do have equipment in your product line, then you do have the enjoyment of selling more traditional deals. For these companies, your SFA has to satisfy both audiences.

It surprises me to what extent this disconnect between the way selling works and the way the software is designed prevails within the organizations with whom I meet. I think it is a relatively easy fix, but it needs to get some visibility. So, let’s start talking about it so we can do something about it.