Sales

The Calculator Within, Part 2

By Bill Freedman

Thanks to part 1, I have your attention. Good.

Let’s cut right to the chase, price leadership appeals strongly to our inner calculators. It is universal (rational in the words of the economist) when products are identical, to choose the lowest priced item. Walmart is the master of this strategy through tactics ranging from featuring prices prominently in their merchandising, running their price rollbacks ad campaign, and (in legend) fleecing employees and suppliers. Similarly, commodities like gasoline and groceries are inner calculator plays by subverting aspects of quality and service to the almighty price.

Inner Calculator

FedEx created an industry by appealing to the inner calculator. “If it has to be their overnight,” the saying goes. FedEx marketed their 10:30AM next day delivery service level agreement and backed it with a money-back guarantee. So we know the FedEx delivery time, but what is the price for their service? I don’t have a clue, but know it’s a lot more than $0.39 for a first class stamp. We each use our inner calculator to determine if the value of overnight delivery is substantial enough for FedEx.

The inner calculator drives software buyers to value quality and service more than price. (Innovation is also a key factor, but that is a different topic for a different day.) As a result, selling on price alone is rare in the software industry. Bill Gates’ and Larry Ellison’s personal wealth are the poster children of a software industry built on quality, service and innovation, not price. On the buy side, countless IT professionals, from programmers to CIOs, have build careers and nest eggs on their ability to translate the principles of quality, service and innovation into specific business solutions.

Even with the emergence of open source software, quality and service continues to trump acquisition cost. Open source makes technology free to acquire. Importantly, the projects and businesses that succeed in open source create a long term value advantage well beyond the initial acquisition cost savings.

Every time I look at an IT department budget, the number that sticks out is labor costs…employees. Smart CIOs know that is where the value is. They also know that the software they acquire is a rent payment on the brains of smart programmers working for software companies. IT professionals who listening to their inner calculators know that open source may be “rent free” at time of acquisition, but it is not “cost free” over the useful life of the technology.

While smart labor is in IT, the cost areas that make or break a business are in ongoing operations. Automating critical but repetitive functions such as processing orders, monitoring quality, and routing information are prime areas where IT applies smart labor to create long term value for business. After all, the most efficient bank teller cannot compete with the speed, accuracy or cost of operating a banking portal for displaying bank balances.

Focusing the Inner Calculator on Value

While price is always a factor for the inner calculator, its not the most important number. The most important number is the value assigned to the features, services and innovation of a product offering. A customer that precisely knows the value associated with a potential purchase or by automating a business process is the one that is ready to put the inner calculator to use…and to buy something. And Walmart, FedEx, Oracle, Microsoft, and Red Hat all have mastered selling to the inner calculator of IT executives to the delight of shareholders and customers alike.

The Calculator Within, Part 1

By Bill Freedman

In my experience, there is no better way to foster a heated discussion than to quantify a claim. From guessing how many gumballs are in a pickle jar to forecasting future interest rates, humans have an inner calculator ready to quantify the size, scale and trajectory. Of course, anyone and everyone can shout out a number. Some, however, are more savvy (and more accurate) with their calculators than others.

Many marketers, myself included, present quantified claims. Fewer, however, explore the behavioral impact of such claims on customers. How you frame a discussion about quantitative information determines if you are “in the game” or irrelevant.

Quantifying claims achieves two important outcomes. First the quantified claim either establishes or fails to establish a bond of empathy between you and the customer around a specific area of interest. One clever example is a local real estate agent who sends a monthly mailer including the address, number of bedrooms and sale price of local houses. For homeowners in the neighborhood, this mailer sets their inner calculators abuzz with estimates of the change in value of their own homes. For renters or homeowners in different neighborhoods, the calculator is quiet.

Second, the quantified claim either establishes or fails to establish credibility. Returning to home real estate, think of all the mortgage refinance offers you receive in the mail offering below-market interest rates. The savvy inner calculator quickly rejects the low-ball rate. These mailers exist to prey on people who’s inner calculators are less refined or perhaps malfunctioning.

Empathy and credibility are important prerequisites for any conversation or business transaction. Prerequisites are nice, but I play to win. Moving from prerequisites to winning transactions is important work–and the focus of part two of this topic. You can read part 2 on December 8 right here at Bill Freedman’s Soon To Be A Major Trend.

Why Sales and Marketing Processes and Terminology Matter

By Bill Freedman

A short and simple question on Quora captures the essence of why it’s so hard to automate sales and marketing processes:

How can the relationship between leads, accounts, contacts and opportunities be simplified in a CRM/Sales application?

My initial answer is on Quora and is worth reading. Here in the blog, however, I’m going to expand on why sales and marketing processes and terminology matter.

Sales and Marketing is a Team Sport

marketing processes and sales teamwork

Sales and marketing benefits from teamwork

This may seem obvious, but we all know there are mavericks in both marketing and sales. How many marketing campaigns were launched to prospects before sales was trained or even saw the materials?  How many rainmakers (or floundering reps who think they are rainmakers) don’t log their calls in the CRM or keep their forecasts accurate? I’m not saying there shouldn’t be room for individuality, experiments or process refinements. What I am saying is that outcomes are more predictable and jobs go more smoothly if there is agreement and coordination between marketing and sales teams.

Just like in football, business teams need game plans, play books and trust in one another. Sales and marketing teams are no exception. But unlike football, business game plans, play books and even terminology are sufficiently different across companies to cause problems.

Common Terms Have Different Meanings

What is a “lead?: An “opportunity?” Ask people in different roles and you’ll likely get different answers. And to make matters worse, throw in the automation vendor’s proprietary terms and confusion multiplies. Here’s what I mean:

Term Generic Marketing Generic Sales Salesforce.com
Lead Any contactable person A person or database record with the following:

  • Name, title, phone number and email
  • Confirmed interested in our products
  • Has budget, authority, clear need and a decision timeline.
 Leads are prospects or potential opportunities stored in the “Lead” object.
Opportunity Any person who has shown interest in buying our products. A sales transaction that ready to be forecasted and shared with management. Opportunities are the sales and pending deals that you want to track in the “Opportunities” object.

Agreement is better than diversity when it comes to terminology. Even so, I’ve never worked with an organization that would have achieved success using any of the above definitions. The marketing definitions are often too broad. the sales definitions are too precise. And the software definition is focused on how many rows are in a particular table.

Yes the definitions I’ve shared are cliches, but they confirm the key point. Consistency across sales and marketing processes and terminology is crucial. It ensures that marketing draws the right people to your web site and passes the right people on to sales. It ensures that a marketing lead is worthy of sales follow-up. It ensures that a opportunity is qualified before receiving precious corporate resources. It allows management to examine and approve putting resources on opportunities that are outside the sweet spot. And most importantly, it enables accurate reporting on revenue and identification of impending problems.

Measurement Requires Precision … and Consistency

precision improves marketing processes

Precise reports are usable reports.

We rely on automation software to produce reports. For the reports to be useful, however, sales and marketing need to agree on definitions and follow processes based on those definitions. For example, a person who enters the lead database as part of an acquired list is valuable, but isn’t a “sales-ready lead” at the moment of import. Many companies forecast how many “sales-ready leads” are needed to fill the pipeline in a period. If there isn’t agreement on the definition of “sales-ready lead,” marketing, sales and executives will have trouble planning. Thinking of merchandising is important, building eye-catching displays that attract potential buyers, and using signage to provide pricing and other product information, all of this to increase the sales.

Complicated? You bet! But as I mentioned in my Quora response, it’s complicated because it’s valuable, important and core to your business success.

In this case you can’t eliminate the complexity, but you can make it approachable and understandable to all constituents. Here are some things you can do to help your team embrace the corporate process and terminology:

  • Publish a glossary/cheat sheet of terms
  • Create a process flow diagram
  • Present, rather than distribute, reports until you have both buy-in and understanding of the sales and marketing processes and terminology 
  • Meet regularly with stakeholders and share the detail every time

Now it’s your turn. Reflect on the sales and marketing processes and terminology in your organization. Is it complicated? Is it broadly understood? Do you have any thoughts on how to improve acceptance? Please share below.

The Full List: 23 Varieties of Successful Web Conversion Offers

By Bill Freedman

Your website should deliver your highest value and lowest cost business leads. People who find your site are interested in your business. People who stay on your site are engaged and developing trust. People who fill out a form on your site, sharing their contact information in exchange for something of value, are gold.

Web Conversion Offers

To mine gold, your web site needs to offer two things:

  • One or more registration forms
  • Relevant content that visitors want

Below is the full list of 23 successful web conversion offers, sorted by category:

Information Downloads

  1. White papers
  2. Tip sheets
  3. Software
  4. Apps

Registrations

  1. Webinar sign-up
  2. Cloud account on your site
  3. Trial request

Activities

  1. ROI calculator
  2. Webinar attendance
  3. Meet-up attendance
  4. Hack-a-thons
  5. Software usage

Subscriptions

  1. Newsletter signup
  2. Mailing list signup
  3. Blog or podcast RSS subscription
  4. Social media “like,” “follow” or “channel subscription”

Access

  1. Contact us
  2. Request a demo
  3. Meeting request
  4. Free consultation
  5. Contest entry
  6. Claim a discount
  7. Inbound call to sales

Picking offers for your business is a very important decision and should flow naturally from your marketing strategy. One size doesn’t fit all. A free trial may make sense for a software developer but not for a business decision-maker. Make sure you have content for all potential buyers.

Keep one more thing in mind: conversions happen in the buyer’s mind and only gets measured on your web site. To earn a conversion, you first need to prove that your business is trustworthy, honest and helpful.

What’s Not on the Web Conversion Offers List

The following types of helpful web content are not listed as conversion offers because it should just be freely available. Somethings, even some valuable things, you just need to share freely. Make the following content freely available to inform, engage and build customer trust:

  1. Product specs and data sheets
  2. Announcements and press releases
  3. Customer success stories
  4. Endorsements
  5. Infographics
  6. Sizzle videos

Are you using other types web conversion offers to generate leads? Share below!

What Does a Sales Funnel Look Like?

By Bill Freedman

A sales funnel is an essential management tools for visualizing the status of sales and marketing operations.

Sales Funnel

The funnel is an apt visual metaphor for virtually every sales process. Many inquiries will enter the top of the funnel. Along the way, some prospective customers abandon your solution while others engage more deeply. In the end, a precious few exit the funnel as paying customers.

But because buyer behavior and sales processes vary greatly across industries, companies and product lines, generic funnel diagrams are of limited use. Think about it: are you satisfied by a picture showing that 1,000 inquiries eventually convert into $199 of revenue? Of course not. The funnel needs to begin with assumptions about your business. From there it needs to be validated, optimized and improved against the reality of buyer behavior and the competitive marketplace. It longs to be a beacon of competitive advantage for your business. It needs to be both predictive and believable.

Eventually, you’ll be able to use your funnel as a model for sales and marketing investments such as sales staffing, lead generation and product roadmaps. It can also become an early warning system for changes in the competitive marketplace, buyer behavior or operational effectiveness.

So what does a sales funnel look like? It looks like your business.

Earning a Handshake 2.0

By Bill Freedman

Building trust starts with the first web visit and with the first impression of your brand.

Such is the idea behind “2.0” thinking. Products, services and brands now have “online,” “interactive,” and “collaborative” elements so that consumers and users play an active, anonymous and early role in creating relationships with vendors. Twitter, Facebook and Wikipedia are halmarks of Web 2.0 success.

handshake 2.0In the olden-days of Handshake 1.0, a handshake was a precursor of bilateral communication. A protocol of acknowledging a peaceful relationship and mutual trust with the idea of building upon the status quo. An initial meeting between a vendor and a prospective customer. A politician building a coalition. A suitor wooing a debutante. Two or more people carve out a sacred space for a live interaction in the hopes of a mutually satisfactory outcome. Stakes are reasonably low with a first handshake; and the budding relationship can quickly go in any direction. Compare this to two people who pass in the street with nothing more than a glance. No rapport. No communication. No goals for advancing an agenda.

The Internet meets Humanity: Handshake 2.0

With that introduction, I’d like to introduce the new concept of—taa daa—Handshake 2.0. As we have more and more interactions online (defined and measured through web visits, cookies and registration forms) there is a new process for establishing bilateral communication. No outreached hand. No touch. No real-time conversation. No progress or even an action plan. Just a web site that seeks rapport and a visitor who is willing to offer personally identifiable information. It’s easy for users to navigate away. But it’s also human to hope that each visited site succeeds at fulfilling the information hunt.

What is interesting is what happens next: a fast exit or an attempt at rapport building. Credibility and effective design by the site owner conspires with desire and perhaps laziness by the visitor to earn a second and a third click.

Like with off-line interactions, there are false-starts and bad first impressions in the online world.

At this point the the user (and laser-focused vendors) chooses whether s/he will try to extend the anonymous glance into rapport and ultimately into a Handshake 2.0. This is so very different than the past. Information collection required numerous human interactions. Now, anonymous web surfers can learn and make some initial decisions without consulting another human. Likewise, the human managers of web sites can look at analytics reports, IP addresses and email domains to determine if the prospect warrants attention.

Creating The Conditions for Handshake 2.0

I argue that earning a Handshake 2.0 is the first job of a web site in the Web 2.0 era. It may not happen on the first day you launch a web site. And the web presence frequently need to be forged with the help of outside forces…reputation, brand, economic forces and individual behavior. So what attracts (and alternatively repulses) visitors from choosing to grant a Handshake 2.0:

Earning a Handshake 2.0 Raising Doubts
  • Hygienic design
  • Empathy
  • Relevance
  • HTML accuracy
  • Browser compatibility
  • A way to offer a Handshake 2.0
  • Jarring or amateurish design
  • Out-of-date information
  • Breaking web conventions
  • Overstepping trust
  • Any of many kinds of errors
  • Asymmetry…asking but not giving

Following the principles above will result in more and faster Handshake 2.0s. Supplementing your web site with other rapport-building tactics makes sense too. This is why marketers are looking for any and every way to build relationships. Facebook, Twitter, MeetUps are the new tools which have earned a place beside reliable standards: press releases, trade shows, advertising and good ole salesmanship.

Did this article make you think? Leave a comment!