The Sales Insider

One of the problems we all have with technology is that we soon forget that what is now commonplace was once rare or non-existent.

New technologies penetrate the market so rapidly that total market transformations can occur in the space of under three years (and some might say even less).

It’s barely been a decade since the Y2K scare and the Dot Com crash. Widespread broadband Internet access hasn’t been a reality since 2003 (and some could even argue since 2005). Smart phones, text messaging, YouTube, SmugMug and Flickr, convergence of mobile audio and telecom, “apps” getting added to the mainstream lexicon . . . all recent developments. 4G network access right through your telecom provider? Check. Streaming HD? Check.

Many businesses and universities barely got their WIRED infrastructures in place by the early 2000s. Now being forced to “plug in” to a network with an actual wire seems almost archaic.

But the real point of all of this is that we have to be careful not to look past the mark with our old sales and marketing standby, CRM.

Hosted CRM seemed revolutionary 10 years ago. Now it’s simply considered the norm for applications of its type. Fluid, mobile, always-on, cross-platform, multi-device ready, “The Cloud” is becoming exactly what industry giants like Mark Benioff of salesforce.com believed it could be.

But as the nature of professional sales has evolved, so too has the need for CRM to evolve with it. “Naked” CRM–i.e., a self-contained CRM application just for use by the sales team–is now just the beginning, not the grand end of sales and marketing intelligence.

InsideView proves that the value of social media increases exponentially when it can be applied directly to the sales/buying cycle. Marketing automation solutions like Eloqua manage opt-ins and content, all directly linked back to lead generation and sales acquisition costs. Dialer tools like the PowerDialer for Salesforce manage and predict call cycles for lead generation, pushing the highest-quality leads and data to the reps right when they need it.

All of this is designed for a single purpose–to close the gap from “old” sales to new. Getting attention through marketing channels is harder than ever. So when a company finally does “get some love” from a prospect, the tools have to be in place to make every opportunity count, to have the highest chance to contact and close the deal.

While I don’t totally agree with InsideView that cold calling is “bottom of the barrel,” the shifting sands of demand generation and sales intelligence in 2011 means that true “cold” calling will almost be a misnomer in the future. Our ability to “predict” who and when to call, what to say when we do, and the value proposition a prospect will most readily respond to will ever increase as the sophistication of the tools we use increases with it.

Driving performance requires accurate and focused measures of performance.  This is especially the case for account development and lead generation teams.  I have recently been interviewing both InsideSales.com customers and non-customers (predominantly from the B2B High Tech/Services/Telecom industries) to identify the optimal metric to use when measuring the success of account development reps.  I found that these companies are actually using a wide array of criteria that include talk time, dials per day, appointments set, appointments held, and opportunities set.

The most successful teams, however, are all using some variation of opportunities set.  Specifically, the most common metric I heard is called TQO, or Totally Qualified Opportunities.  A TQO is an opportunity that actually contributes to the sales pipeline and has a close ratio that is within the same ratio as the existing sales process.  This metric provided much greater visibility than any of the others I saw.

Then I dug into the number of TQOs that an account development rep can reasonably achieve in one month.  This number ranges from 16 to 28, and seems to vary due to differences in industry, maturity of rep, list type and source, and company/product brand.  The maturity level of reps ranged from young (20 year old non-experienced) to 45+ veteran reps.  Generally speaking, reps in the companies I talked to were calling on Jigsaw-, ZoomInfo-, or InsideView-type cold lists.

The next metric I looked at were the metrics measuring reps’ effort.  These were also extremely varied, although I did find an interesting pattern.  Companies that sell higher ticket items (valued at $100k or more) tend to have fewer dials per day (between 75 and 100 dials per rep) and spend more than 50% of their time researching the companies they are calling.  In contrast, I found that reps in companies with lower cost items typically dialed twice as much—between 150 and 200 dials per day—and spent much less time researching.

So, in evaluating your own team, consider focusing on 20–24 monthly TQOs per rep as your primary success criteria.  Additionally, depending on your average revenue per customer, set the expectation that your reps achieve 100–200 dials per day, where they spend the rest of their time researching, networking and connecting with the people they are calling.

Saw a link to a Harvard Business Review article this morning on Twitter (thanks @abneedles) that had something interesting to say about the “sales funnel.”

“A global consumer electronics company embarked on a CDJ [Consumer Decision Journey] analysis after research revealed that although consumers were highly familiar with the brand, they tended to drop it from their consideration set as they got closer to purchase.”

A fairly critical warning note to those of us in marketing, wouldn’t you say?

A brand with high awareness, but low conversion.

In other words, awareness /= buying, and getting farther down the funnel before a prospect drops out isn’t a net benefit. It’s no different whether they drop out at the top (before they even begin their initial information search) or if you’re the last to get “cut” from the final decision.

I’ve heard in several places now that research by SiriusDecisions shows that today’s typical customer is 70% through their buying cycle before they’re ready to meet with a sales person. Sure, it’s good to be at the top of the funnel and to be considered at all, but “awareness” is only the first step to being considered in the decision-maker’s criteria.

After that, it’s not just about awareness, but consistent response, lead management, marketing automation, quality sales skills to maintain awareness once contacted, and providing useful information and content–all with the goal of educating the prospect to find a solution that is right for them.

When Ann Holland from MarketingSherpa asked Dave Elkington and I to present InsideSales.com’s research findings with MIT and Kellogg back in 2007, I’ll admit we were excited for a chance to “show off” a little bit what we thought was some “pretty cool little research” on lead management and lead response.

To say that the response since then has exceeded our expectations would be a major understatement. That same research has practically spawned the the entire lead response management industry, and I’ve seen at least ten follow-up studies from other sources since.

So when Ann contacted me to let me know she was moving on from MarketingSherpa, I was both surprised and intrigued to see where she was going.

Ann’s had an ear to the ground, and her finger on the pulse of sales and marketing, especially in B2B, for a long time now. She’s an industry insider in the best sense of the word, and the work she did at MarketingSherpa helped make it one of the most respected thought leaders in professional sales.

One of her two new ventures, Which Test Won? is a fascinating take on split variant marketing testing. Using actual samples of marketing content, she has users predict which content actually performed better in use–and then show the actual answer. It’s still ramping up, but this is the type of real, actionable data that we marketers can use in our everyday work with a vengeance.

Check out the Web site here.

Her other site, Subscription Site Insider, gives users a well-informed view of how to better manage their subscription Web services, with great content on managing legal issues, renewals, content, and more.

Check it out here.

“Our Age of Anxiety is, in great part, the result of trying to do today’s job with yesterday’s tools and yesterday’s concepts.” -Marshall McLuhan

New Year’s Eve, 2010, will mark the 30-year anniversary of the passing away of someone you’ve probably never heard of, a scholar by the name of Marshall McLuhan.

Many academics consider McLuhan, a Canadian who taught the majority of his life at the University of Toronto, to be one of the foremost pioneers in media and communications studies, and their effects on the social and cultural makeup of society.

The concept of “the global village”—an always-on, totally connected society, linked by electricity and wires to move information—was first posited by Marshall McLuhan in 1961, 30+ years before the public Internet and World Wide Web would make his vision a reality.

So why do you care who Marshall McLuhan is, you ask?

Because if there’s a better quote to represent our 21st century reality than the one that kicks off this post, I have yet to see it.

“Trying to do today’s job with yesterday’s tools and yesterday’s concepts” sums up the entire zeitgeist of the Sales 2.0 / Marketing 2.0 / Social Media / Whatever Else 2.0 movement.

It’s the reason why education in America is failing rapidly, why Apple and Google, and not Microsoft or Sony are the world’s technology leaders, why newspapers are dying, why Hollywood Video is dead (and Blockbuster is getting there fast) in the face of RedBox and NetFlix, why American automotive makers seemingly haven’t turned a profit since 1974, why the MPAA and RIAA would rather spend money on exorbitant legal fees than in promoting better entertainment content and distribution.

It’s also the reason why sales advice and sales training continue to be highly profitable businesses, why Social Media “gurus” are getting paid large consulting fees, why “naked” CRM systems are no longer enough without marketing automation, social connectivity, and lead response management.

The reason we’re willing to pay a lot of money for new methods, new technologies, new ways of thinking, is because they’re needed, and we’re seemingly willing to reach out to anyone who appears to have some answers.

Realistically, can everyone actually be an expert who claims to be?

Hardly, and it’s a cautionary tale to not get caught up in hype and snake oil.

But if we’re in such desperate straits to make sense of our emerging economic reality, it’s because we recognize that Marshall McLuhan was right.

Trying to do today’s jobs, meet today’s needs, connect with today’s customers, while using yesterday’s tools and concepts cannot be anything but a recipe for failure.

Tuesday evening at Dreamforce, I got into an interesting Twitter conversation with Left Brain Marketing’s Adam Needles (@abneedles on Twitter) discussing marketing’s relationship with sales.

In Adam’s mind, he felt that the presenters of the Sales/Marketing alignment session were pushing marketing back into a sales support role, one that he felt didn’t align with the purpose of today’s Sales 2.0 demand generation strategies.

I’ve never met Adam in person, but having read some of his writing at Silverpop, Left Brain Marketing, and on his own personal blog Propelling Brands, he has always produced insightful, thought-provoking content related to B2B demand generation. Thus, I was intrigued by his conviction that marketing and demand gen were not “sales support,” but a holistic, integrated set of processes that speed and maximize business development.

In stark contrast to Adam’s ideas is an article I read several weeks ago from BNet’s “Sales Machine” blog. In it author Geoffrey James forcibly decries what he sees as one of the biggest failures of marketing departments — that they “turned from service functions into a ‘strategic leadership’ role.”

James goes on, “Marketing geeks started showing up in product design meetings, pretending that they understood the customer . . . The problem isn’t that two co-equal groups [sales and marketing] need to work together. The problem is that marketing got uppity and forgot its place.”

Hmm, so which is it? Marketing and demand gen as a strategic, holistic business practice? Or a subservient lackey to the sales team’s needs and imperatives?

As Adam stated in one of his tweets, “In a Web 2.0 world, #B2B marketing must become the leader of a holistic demand gen process — not just tactical lead gen.” Ideally marketing is about producing “closable” leads, but it’s also about branding, educating potential buyers, creating valuable content, and generating “thought leadership” in the market — all of which ultimately produces better quality leads in the future.

That said, having straddled the sales and marketing “Great Divide” for nearly six years now, Geoffrey James’ words carried some weight with me. Too often marketers get away with living in a “measurement vacuum,” and the C-level doesn’t hold them to the same level of hard metrics as sales. Marketers want to be “creatives,” with all of the associated “freedom,” without being tied down to “mundane” lead qualification rates and cost-per-acquisition.

Yet Adam’s vision of what could be ultimately seems to be the best long-term strategy. If marketing and sales need to align, it’s precisely because of Geoffrey’s point. Sales reps can no longer chase after marketing-generated “rainbow sunshine”; they have to maximize every lead they get, every minute of time they have. If marketing isn’t producing quality leads, sales reps don’t have the luxury of throwing good effort after bad, especially now. And a good demand gen strategy, based on quality sales intelligence, analytics, and processes, will absolutely provide more and better opportunities.

More than anything, the question boils down to, Who has the final say in what marketing should be doing? The CMO, or the VP of Sales?

“Subservient” might be too strong of a word, but I do think that ultimately if marketing isn’t producing quality leads for the sales team, it’s sales’ job to get the course corrected. When it’s all said and done, the buck stops in sales, not marketing.

It was a crazy week at Dreamforce. The PowerDialer for Salesforce 3.0 that we rolled out the first day of the conference was an incredible success. The number of inquiries, and the level of interest blew away our expectations.

Now back to the real world.

I have to admit, before Dreamforce, I was getting g little burnt out on the usual sales and marketing blog schtick.

How many different ways can you say, “Align marketing and sales,” or “Create a measurable sales process” before you’re repeating yourself (endlessly….repeating….yourself)?

So today we’re doing something different.

I don’t know anything about Pawel Brodzinski other than he’s a software developer, and he’s Polish.

But I bumped into a fascinating blog post on the “Definition of Done,” referring to the changing scope, problems, and goals that determine when a software product is “finished.”

He states, “Clients often deliver some wishful thinking as requirements, and then vendors go through them only roughly and come up with a generic document which describes fuzzily what should be done. No surprise the real goal appears to be changing over time as everybody realizes all the assumptions and gaps in initial plan.”

In other words: We often don’t really know what we want until we see it – - or don’t see it, and then realize we want something else.

If we can’t define for ourselves the customer’s “Definition of Done,” we’re going to have problems justifying our involvement.

(Whoops. Look like I really am going back into sales process. But the concept was so intriguing, I just had to bring it up.)

Ultimately in sales, there’s two ways of addressing that definition: we either abide by the prospect’s definition as they see it, or we create a new definition for them by educating them.

If this sounds like a rehashed version of “Qualify your customer,” maybe it is, but the difference is “Definition of Done” shifts the focus completely to the buyer’s end state. A sale may close in 90 days, but the customer’s relationship with the product and service going forward remains infinitely tied to their “Definition of Done.”

A sale is never about our “Definition of Done.” It’s always about the customer’s.

The worst kinds of clients are the ones that buy, only to realize in the initial setup phase that they’ve picked the wrong horse. The product or service they’ve chosen isn’t addressing the “Definition of Done” in their heads. They didn’t understand what was being sold, and the sales rep never bothered to address the issue.

As Sales 2.0 Network’s Donal Daly state, there’s only two reasons we lose a sale—either we shouldn’t have been there in the first place, or we get outsold.

We can never get complacent in assuming we know what the customer needs. We can never point to any one feature or benefit and say, “This solves everything.” As Pawel Brodzinski points out, the thing we think they want today may have little bearing on them buying from us in 12-15 weeks.

My biggest takehome from yesterday’s Dreamforce Keynote by Mark Benioff wasn’t the power of the Cloud, Mark’s personality, or the evolution of the salesforce.com platform (though it’s interesting to follow the continued expansion away from purely sales-oriented “stuff” to a broader host of applications).

It was the realization that the move to cloud computing as a mainstream service highlights a very real concern for such systems: the need to carefully control and streamline the data itself.

In the old days, computers were largely personal in nature—we used them at home, with our own software all the time, we rarely moved data from one computer to another (where have you gone, oh great floppy diskettes?).

As a result, our own schemes for managing and organizing data were mostly of our own personal preferences.

And now computers are no longer our own.

They’re our companies’ systems. Our spouse’s. Our neighbors’ in cyberspace. Our data is now part of a corporate network, a critical application database, a Web forum, our social media sites.

Sales intelligence and predictive analysis systems only work if the data they’re using have a basis in accurate reality. We’re increasingly going to have to learn to break some bad data management habits, especially as the future of cloud computing goes forward.

Based on the announcement of the Database.com platform, it’s clear that we’re still suffering from the shock of waking up to discover that our computer systems are no longer personal and individual, but communal—and taking care of our data in a communal space is a whole lot different than doing it when it’s just us and a couple of 5 ¼” floppies.

Sitting at our booth at Dreamforce, I’m always amazed at the energy these big conferences bring. It’s a testament to me of the power of human creativity, how we as people are at our best, our most noble, when we are in the act of creation—from steel and silicon to words and ideas.

We are a race of builders. We weren’t meant to sit around and wait for society to create itself. We make it ourselves, in our images.

I don’t know why I’m bringing this up at this very moment, sitting in this rock-hard plastic chair, the noise of a crowd echoing—but it’s the truth. Building something, sustaining something is the point of who and what we are.

I guess I bring this up because marketing, particularly direct marketing, too often settles for something less. We talk about tapping in to customer needs, organizing our efforts around creating real customer value, but end up simply selling the “thing,” not what makes the thing valuable.

Over the next four days, I’m interested to see who’s going to be giving out real, valuable information and insight, and who’s going to be giving out thinly-veiled promotional pitches.