So often my clients find their #1 competitor is actually the customer doing nothing. That’s right. It’s not the direct competitor or a substitute option or even a homegrown solution that cinches the deal but rather inertia or doing nothing that wins.
This can be especially frustrating and expensive when a sales team has invested a lot of resources to pursue a deal in good faith.
And there are real opportunity costs for resources such as demo equipment, sale rep and SE time, travel, and executive relationship credibility. So the question is: how can you compete more effectively against Mr. Do Nothing? Here are some tips that have proven effective.
Clayton Christensen talks about the “overserved market” in his bestseller the Innovators Dilemma. Basically the logic is that for some customers an 80% solution meets 100% of the need. The 80% solution may be doing things the way they are done today even if it’s manual, error prone, inconvenient, painful, inefficient, costly, etc. This is home territory for Mr. Do Nothing since the pain isn’t perceived as great enough to justify change and to buy a new solution. Competing against Mr. Do Nothing starts with a different sales approach from the outset.
Qualification: Ask qualifying questions of prospective customers with as many stakeholders as possible. And be sure to get the opinions of likely dissenters early on such as the CFO.
• Why not keep doing what you’re doing?
• Why is this a must-have priority versus nice-to-have?
• What was the impetus to launch this project?
• Why not wait another month, quarter, year?
The answers to these questions will uncover some of the reasons that the prospect may later choose to do nothing. Knowing this ahead of time can tell you whether it’s worth your time addressing these objections or better just to qualify out early on.
Build Advocacy: Every change represents both a threat and an opportunity. Identify the potential winners and losers when a new solution is adopted. The biggest resisters of change are those who feel they will lose out somehow. Find out who they are and create a win for them if at all possible. Then there are executives who might reject the purchase late in the cycle. Map out the organization from the perspective of doing nothing and see how you can make sure each player can be a winner and an advocate for change:
• Decision maker
• Economic Buyer (e.g. CFO)
• User
• Managers (e.g. IT organization that will manage/support the solution)
• Evaluator/Influencer
• Legal
• Purchasing
Business Case: Confirm that there is a budget for this solution purchase. How was it justified and what assumptions went into it? Build a business case relative to doing nothing. Help the prospect see all the hard costs, missed opportunities, and business consequences of business as usual. Quantify, quantify, quantify. Your solution ROI must be relative to doing nothing not relative to your competitors. Here are some ROI elements that you might explicitly define relative to doing nothing:
• Revenue expansion (e.g. incremental sales)
• Faster time to market
• Reduced capital and operating expenses (e.g. facility, equipment, personnel, etc.)
• Risk reduction (e.g. security threats, financial risk, compliance)
• Improved customer satisfaction (e.g. increased customer retention and upsells)
• Productivity gains
In conclusion, the key to beating Mr. Do Nothing is to do something very proactive which is to treat this option as the #1 competitor. And that means starting the sales process with smart qualification questions and criteria, building a ground swell of support as well as air cover from executive sponsors for the new solution, and to help craft a solid business case that makes doing nothing seem irresponsible.
Partners Revisited – Seven Watch-Outs
Jeff Thompson, my partner at Aventi Group, and I recently worked on a project where we helped an important client revisit and optimize their channel strategy. The problem was that our client who sells directly and indirectly to the SMB segment, had partnerships agreements in place with over 9000 partners. But what they did not have is a clear picture of which partners were performing or even active.
Note that this is a client for whom the SMB segment (yes I know it is not one monolithic segment) is key and selling through partners is very important. Also our client is a leader in understanding this segment and providing incentives for making their partners successful in selling to SMBs.
But over the years, in response to market and competitive pressures, their offering and programs had become so complex that it was unclear which of their partners were actually performing or even active. To add to this they had a multitude of contracts dating back to 2004 often with varying addendums and special commissions structures. It had become very unwieldy to manage the partners in an efficient, cost-effective manner. As a result, resources were constrained and even good partners suffered.
To help them, we conducted a detailed analysis – covering legal, operations, promotions, competitive, revenue and P&L factors – that was very revealing. Based on that we were able to make several recommendations about how they could optimize their program, make it operationally more manageable and more productive!
While I won’t share the specific recommendations we made to them, I do want to offer up some nuggets we learned as watch-outs in developing your channel:
1. Be sure to listen to Multi-Functional input: We found that programs are often developed and deployed without the proper inputs and this can result in unintended - and often bad - consequences. Legal, Operations, Channel marketing, Finance, Marketing (Promotions) and anyone else (even website managers who will enable any self-service online) who might touch partners should be invited to give their feedback to the proposed programs. What we learned was that you can circumvent many issues by doing this upfront. Don't reinvent the wheel. Someone in your organization already has one.
2. The evergreen KISS principle (Keep it Simple, Stupid): Incentives for performance should be easy to understand and uniform for all. While "kicker" rewards are tempting to offer, be sure to only institute them if you can offer something really powerful for a potent return. Offering kickers just for the sake of it only adds complexity. You will be surprised at how many partners prefer simplicity to meaningless rewards that take up mental "space".
3. Be Competitive – "holistically”: Ask what alternatives your partners have? What will they do if they do not choose to partner with you? How will that choice affect your competitive standing? Be competitive in your offering to tip the balance in your favor but look at the whole picture – not just the monetary offering. Is your company more or less stable from a partner's perspective? What's your credibility vs. your competition? What's been your history on partnering – real or perceived? Are there other strategic reasons (e.g., related offerings, geographical presence, strength of parent company?) why they might prefer to partner with you – or not?
4. Don’t think of Monetary Incentives as the end-all: It's true that partners are in it for the money but often they will forgo the last few dollars to partner with a player who makes their lives simple. So look at your whole offering, the whole experience you offer them (how complex are your contracts? how hard is it for them to sign up? get paid?) and make it attractive so that you're "easy/iest to do business with..."
5. Ensure Operations can support the program as it grows: Often companies make the offering very attractive so everyone wants to sign up - but then everyone cannot sign up because the company cannot support it. Automating repetitive tasks, enabling self-service and minimizing and planning for exception management are critical in these matters. As you develop the program and involve legal also involve the operational side of the company.
6. Ensure the Programs do not become a Millstone: Once the partner is inactive and/or non-performing what happens? One of our findings was that a large number of contracts could be interpreted to entail "evergreen" commission payments even after the partner was terminated. As a result a large number of partners were collecting very small checks forever – not efficient for our client or for the SMB partner. While we recommended a solution to ease this, the best way is that such eventualities should be avoided upfront.
7. Apply the 80-20 "prune" Rule – but smartly: As in all things we found that it was the top 10-20% of the partners that were delivering most of the value. However be sure to segment your partners by performance to see who is performing and who's not and try to understand why. A lot will be revealed by this segmentation. We found that the next 30% (below the top 10%) were not performing but collectively accounted for a huge portion of the business. They could not be terminated without careful consideration. With deeper analysis and further market research we recommended keeping them but modifying their contracts to reflect their business realities and the client's needs.
Any of this ring true? Write to us.
September 27, 2008
Optimizing webforms to generate more leads through your website
After a talk on lead management, I spoke with several marketers from a company where one said, “We don’t need to qualify our leads because our web forms do the qualifying for us... then we send them to our sales team.”
Here's the problem with that model... long and detailed web forms often cause people to lie or simply leave altogether.
So what should you do instead? Start by creating a lead generation form that balances your need for information and potential buyers need for not being hassled.
Testing and optimizing even a few key aspects of your landing pages can provide major gains for your lead-gen efforts to improve lead conversion and ROI.
Recently, I was a guest on a web clinic Dr. Flint McGlaughlin, Director, MarketingExperiments that examines three tests they conducted to demonstrate how you can use Incentives and Friction to generate more leads through your site.
The webinar was titled “Filling the Pipeline: How a LeadGen Test Strategy Achieved an 86% Increase” You can watch the webinar (no registration required) or read the synopsis.
September 24, 2008
Should You Require Registration for Web Content?
Should you require registration in order for Website visitors to download white papers and other content? And if so, how much information should you require?
Perform a random survey of high-tech company Websites, and you’ll discover very quickly that there are widely varying schools of thought on this topic. Some sites (including those of some very well known brands) provide unfettered access to all content and require no registration whatsoever.
Others make the visitor run a veritable gauntlet of forms and qualifying questions simply to get to a measly case study.
There’s also a growing trend towards the “resource center” approach, that is, a one-time registration that thereafter gives the approved visitor complete access to everything the Website has to offer.
What’s the best approach? It depends on your priorities, and to some extent your audience, but here are some thoughts to consider:
Should you require registration in the first place? If you care about sales leads, the answer is absolutely: yes. If your priority is getting your brochure or white paper or case study into as many hands as possible and not really caring who those people are or whether you ever talk to them, then: no.
There was an interesting discussion on this topic during a recent industry Webinar I attended. To quote the transcript:
“… this is a real-life example from Red Hat, where they set their webinars free. A lot of their webinars do not require any registration at all. You just go online and there it is. So how are they collecting leads from this? Well, they’re collecting plenty of leads because what’s happening is they’ve got that big, honking, ‘contact sales’ button there. They’ve got a ‘learn more’ button. They’ve got all sorts of buttons there designed to get the right lead to interact with them.”
To which I say: ridiculous. Yes, you’ll pick up some subset of the leads you might have captured initially through registration, but you’ll lose many more. With all due respect to the speaker, believing that you’re going to capture leads anyway because people are so desperate to talk to your sales department is, well, optimistic. And besides, this is Red Hat (open source software), for whom offering free downloads is a way of doing business.
So, yes – make people register. Next comes the question of how much information to require. In years past, the answer to this question has been driven by what information is needed to determine whether the person is a qualified lead. You see this legacy quite clearly on a number of sites. For example, recently I attempted to download a white paper from a well-known manufacturer of security appliances. Here was the process, painful as it sounds:
* In order to access the white paper I needed to create an “account” on the Website.
* In order to create the account, I needed to fill out a form with 18 (count’ em) separate fields – all required (I know, I tried to skip them) – asking how big my company was, what role I played in the decision process, whether I had an upcoming security initiative, and my timeframe for a decision.
* Then I needed to create a user name and password.
* Then I had to wait 2-3 minutes for a “validation e-mail” to arrive in my inbox.
* Then I had to click on the validation link to access the site.
* Then I could download my white paper.
Now if I was a network security manager, and not just some nosey marketing type, I doubt very seriously whether I would have bothered to complete the process unless I was extremely motivated to get that particular white paper.
Putting prospects through this type of initiation ritual is insane. But clearly it’s the result of some past sales VP saying “unless we know these facts about every prospect, I don’t want my reps calling them.”
News flash to all sales VPs: you don’t need to capture all that information as a first step. And to the extent you DO require that information, you’ll lose the opportunity to engage with some seriously interested prospects who are genuinely curious about your product but who want the information you’re offering NOW and don’t want to jump through hoops to get it.
Instead, use what’s called “progressive profiling.” You’ll need a marketing automation system or similar technology in place to accomplish it, but the basic tenets of this approach are:
1. Require very little information to capture initial registration.
2. Engage the individual in a series of follow-up communications via e-mail encouraging him or her to provide more information (in a way that doesn’t require that person to fill out the same information already provided)
3. Set a threshold for what defines a “sales ready” lead (i.e. the amount of information, or certain demographic criteria) and forward those leads to your sales force (automatically) once qualified.
In most cases, the information required for initial registration should be no more than name, company, e-mail address, phone number, and zip code (for lead assignment purposes). If there’s some other absolutely vital qualifying data – for example, the person MUST have Microsoft Exchange installed or there’s nothing you can do for them – then ask that too, but stop there.
Marketing automation systems also enable the “resource center” (one-time registration) approach whereby a visitor, once registered, can access additional content freely, either through a log-in process (as in the security site referenced previously) or because the system recognizes them automatically via IP address or cookie and “lets them through.” Some systems will also track when that additional content is accessed and what was accessed, record that data and populate it into the prospect’s record in Salesforce.com or other CRM system.
There are benefits to this approach – the most obvious being that the prospect only registers once, though you could accomplish the same thing by placing a registration form in front of every content asset but have that form pre-populate automatically for repeat visitors.
The downside of the resource center approach is how it’s presented. When I went to the security vendor’s site, I didn’t want to register for an account on their site. I wanted a white paper. To the extent you’re asking the prospect to register for something he/she didn’t request (a user account, or access to your entire white paper library), you run the risk of that prospect abandoning the process. Basic direct marketing 101 says: give your reader what he/she wants. If you decide to pursue the resource center approach, be sure to position it as simply an added benefit of requesting the initial content, i.e. “When you register for your free white paper, you’ll be automatically granted access to our complete resource library …”
Don’t let the registration process, and your decision of how to structure that process, be governed by your sales reps’ demands to know absolutely everything there is to know about an individual prospect before they will deem to talk to him or her. Instead, make the registration process as quick and painless as possible, even if it means requesting the bare minimum of information. Then employ automated lead nurturing to engage that prospect further, and trigger sales follow-up either when you’ve collected enough information, or else when that prospect has met “sales ready” criteria by your definition. You’ll generate many more leads and your sales reps will thank you for it.
For more information on the lead nurturing/progressive profiling model of demand generation, download a copy of our free white paper on “Lead Recycling: A More Cost Effective Approach to Demand Generation for High-Technology Companies.”
Should You Put a $ Sign on Your White Papers?
We all know that white papers are free documents, often used for lead generation purposes.
However, should we call them a report and place a dollar value on them to help improve their perceived value?
That is precisely what my friend and white paper peer Bob Bly recently suggested. Here’s what he actually said:
In the June 2008 edition of Target Marketing, Bob Bly wrote:
Does what you call your bait piece really matter? I think it does, because calling it a report or guide creates a perception of greater value—after all, thousands of publishers actually sell special reports and booklets for prices ranging from $3 to $40 or more.I often put a dollar price for the guide or report in the upper right corner of the front cover, which strengthens the perception that the freebie has value; I don’t think this would be credible on a document labeled a white paper.
I’m wondering what you think about this?
Do you think for a business audience this would work or make sense?