Specifically, I’m thinking about the white lies we tell ourselves concerning the desirability of Marketing generating leads for Sales.   As part of our current research about gaining commercial alignment, we asked sales and marketing executives to force-rank their priorities.  Somewhat surprisingly, ‘lead generation’ appears toward the end of that list, with sales executives ranking it as an even lower priority than their marketing counterparts.

Now this may be an indictment on the quality of the leads.  But in this day of LinkedIn, Jigsaw and any number of networking applications showing you exactly where people work, I wonder if we’ve set the bar too low.  The challenge for marketers and account managers is around generating introductions – nobody continues to simply need a list of prospects.

The bar for an introduction is much, much higher and requires some real commitment on the prospect’s part.  The willingness to take a quick call is, in and of itself, a pretty good qualifier for a prospect.  Refocusing the commercial organization to think about introductions has some major implications:

1)      For Account Management, the level of collaboration with the sales organization just went up. This doesn’t just pre-qualify the leads; it also allows management to separate the wheat from the chaff in terms of who actually contributed to a new sale.  For example, many companies find themselves not wanting to pay out multiple sweeteners to all the people who flagged the obviously attractive prospects.  Requiring an introduction would probably solve that particular problem.

2)      For Marketing, the type of activity likely changes.  Instead of optimizing for reach, marketers should optimize for higher bandwidth channels that allow for a two-way communication. So, more emphasis on spending time with customers and a re-prioritization toward higher impact channels such as conferences and user groups.

3)      And for Sales, well, it’s very hard to turn down a first invitation to speak with someone. Chances are, not all of these introductions will work out, but this should mean that the sales organization is much less likely to simply throw out everything.

MLC members: take the commercial integration diagnostic to see how well your sales and marketing priorities align.

I’m reminded of a recent conversation with business owners at a software company, who developed a new way of thinking about certain data problems.  Though customers generally agreed that this was a better way to handle the data problems, the solution spanned many departments, and the software company couldn’t convince customers that the hypothetical returns were worth the extra coordination efforts. Failure to generate a positive emotional response likely explains our non-finding with regards to the effectiveness of the ROI pitch.

It’s not that customers aren’t influenced by ROI calculations; it’s just that few people make complex business decisions based entirely on somebody else’s ROI calculations. Senior buyers are pretty savvy people – they know their own ability to derive a set of returns that will look sufficiently attractive. They also likely recognize that they are constantly pitched things that they are already inclined to like. In other words, buyers become perfectly cynical about value at the point at which the entire conversation becomes dominated by claims about value. It’s a subtle notion, but the hypothetical existence of value simply doesn’t challenge the customer.

This finding has profound implications for how marketers need to think about building the messaging and reinforces many of our findings around commercial teaching:

1)      Challenge concrete customers assumptions. Everybody already assumes that we offer some hypothetical value; thus most people aren’t going to be very excited by the idea that you have value to deliver. You’d never be talking to them if they thought otherwise.

2)      Lead to the value and unique strengths offered. The sales force still needs perspective on how the value is derived, but the calculations should be substantially built on how the customer has come to conceive of the problem.  Ideally, Marketing shows Sales how to help the customer build this for themselves.

3)      Use calculations to show why customers should care. Numbers can help you prove that the problems identified are worthy of the customer’s time. The absolute dollar amount, in other words, has to be worth the opportunity cost of solving that particular problem.

4)      Show the sales force how to think about the sale. Show reps your ROI calculations to signal that the thing has been thought out and that it’s worthy of consideration, but make sure they end with the ROI pitch and that they don’t just start with it.

MLC Members, access our tools and templates to help hardwire the connections between your differentiators and customer emotions and pain points.

This observation comes from a study of key account managers in 2006 that surveyed key account managers from 53 large companies.  The study found that, while all companies tier customers, they also tend to limit the number of accounts that fit the description: “a customer relationship that is deemed significant to your company’s long-term growth because of that customer’s current and/or expected financial, learning or strategic value”.  Specifically, the number of true key accounts tends to cluster around the 15- to 20-mark, irrespective of the company’s industry segment. That was a surprise, since we expected certain firms (like the delivery industry) to engage with a much larger number of accounts given their routine interactions with 100,000s of customers.

The fact that the number was constrained suggests a managerial, rather than an operational, bottleneck.  Simply put: no company is capable of seriously engaging with more than a few handfuls of true key accounts at any one time.

This is an important constraint for marketers as they are the custodians of the firm’s value proposition and are often tasked with identifying the firm’s next growth platform.  For most firms, breakthrough growth is going to come from identifying those customers who are positioned to grow and whose growth will depend on the use of contingent capabilities.  But key accounts shouldn’t just be about stable revenue generation; they should also be about co-developing capabilities.  Privileged access to these important customers becomes a major competitive differentiator for a given company.

The catch, however, is that it’s relatively rare for key accounts to be offered a unique value proposition outlining the strategic direction for both firms to pursue. Instead, it too often comes back to ‘white glove service’ and access to fun functions. These are all wonderful things, but they don’t really talk about offering access to key managers/staff or the firm’s scarcest capabilities. They sometimes contain goals around mutual investments, but it’s rare for these investments to link to a specific strategic intent. And thus, if your firm is trying to manage more than about 20 of these top-to-top relationships at the same time, well, then maybe it has placed too many small bets and needs to double-down on a selected few for it to make a difference.

MLC members: learn more about developing a key account strategy that uses your company’s core capabilities to address the needs of target customer segments.

Take the sales cycle – or the time it takes somebody to go from an evaluation to a purchase. Over time, we observe that the sales cycle, especially in B2B contexts, is especially fixed by customer. Different people and different companies simply have different ways of making purchases and it’s very hard to lastingly change this. Of course you can inflect this through discounting or special offers, but these effects are temporary at best. Marketers can learn a lot from watching the sales cycle as carefully as possible because it’s a very powerful indicator of whether or not demand for a given offer is either slowing or expanding:

• If the sales cycle goes down across multiple regions and people for a given product/service, then this almost certainly means that the market is growing. This is the time to suggest aggressive campaigns to capitalize on the momentum. It’s also a good time to consider expanding coverage through the addition of people.
• Conversely, a contraction of the sales cycle should suggest a change in the nature of the demand.  People will tell you that deals are stuck in the pipeline, and this is when marketers face maximum pressure to come up with a quick relaunch or a new campaign. Realistically, they would do better to resist this and instead focus on quality of business, concentrating resources on fewer customers known to have significant needs.

Incidentally, there’s always the person whose sales seem to go much faster than everyone else’s, and most likely this person is doing something differently. It’s worth finding out so that marketing can tell everybody how to similarly get on board. But there’s also a chance that this person is simply a little more restrained about entering unlikely deals into their pipelines – and that too is worth understanding.