Posts Tagged ‘sales cycle’

SaaS: Building the revenue momentum you need to achieve profitability

Tuesday, May 11th, 2010

Lots going on in Boston this month.  Just got back from an information-rich panel discussion offered by the Massachusetts Technology Council entitled: Tricks of the Trade – Building Revenue Momentum in SaaS.    Here are my notes.

SaaS revenue momentumProgram description

Unlike traditional software business models which are based on one-time license sales and lump-sum cash payments, the SaaS model is predicated upon building annuity-type revenue and cash streams. Over the long-term this business model is highly attractive, but especially for early-stage companies ramping SaaS revenues poses a unique set of challenges. MassTLC has gathered a panel of accomplished SaaS operating executives to share their insights on getting the initial revenue ‘flywheel’ turning and building sustainable SaaS enterprises.

The panel

Skip Bestoff, General Partner, at Castile Ventures did a great job of moderating the discussion–asking all the questions we hoped he’d ask.  Fred Mather, Global Head, M&A and AI Sales at IntraLinks and Richard Turcott, CMO at RatePoint drew on a wealth of experience to share best practices, lessons learned, and advice about how to get the revenue flywheel going.

Determining market positioning and value propositions

Skip asked, “How do you find the sweet spot for your business?”

Advice:

  • Understand your market and follow through–too often people find their target market and then later ignore what they’ve learned.
  • Meet with prospects to gather market insights.  Nothing beats seeing someone’s reactions as they talk about what’s important to them.
  • Ensure that the opportunity you’re pursuing addresses a significant problem
  • Tie your value proposition to cost and/or time savings.
  • To ramp quickly, aim for those who already recognize they need a solution to the problem you’re addressing

Tips:

  • Accelerate your learning by using pay-per-click ads to test various terms you’re considering using to market your solution
  • Then, apply what you learn to other channels

Skip asked:  What’s the impact of the subscription model on the value proposition?

  • SaaS enables you to target the economic buyer, since you don’t need to put anything in “on premise”
  • The sale is more transactional.   When the entry point is just $/month, perceived time savings and ease of use often trump classical  ROI
  • Customer centricity is more important than ever.  You need to deliver a great customer experience if you lead with a trial.

IT’s involvement in the sale

Comments:

  • The IT budget is shrinking, so you need to attack the operating budget if you want to make a lot of money
  • IT is still involved for enterprise sales, that require custom development such as integration with other applications the customer is using
  • You need to tell IT what’s in it for them
  • Although it’s all over the place, most IT departments today are economic buyers
  • If IT approval is needed, there is one more step in the sales cycle, and the company tends to grow less quickly.

How much should you pay to acquire a customer?

Advice:

  • Start by determining the lifetime value of a customer (LTV).  The calculation is (1/attrition rate)*Average sales price
  • In the beginning, you may need to pay more than the LTV because you haven’t proven your value or developed a brand.
  • In the long term, you need to pay less than LTV to achieve profitability

Best practices for acquiring customers

  • Depend on prospect and customer anecdotes to get your messaging right.
  • For small price point products, you’re conducting focus groups every day (as you watch online buying behavior)
  • Leverage the community: start with those who wield the greatest influence with the target market
  • Then, focus on getting customers that are willing to serve as spokespeople for your case study
  • Work your network:  with the advent of social media, no one needs to make cold calls
  • Set limits and success criteria to ensure that your trials encourage conversions:  give prospects just enough time and functionality to experience value
  • Hone your process by analyzing the sales pipeline:  key metrics include visitors to trials, trials to conversions, time to progress through cycle, level of discounting

Customer support strategy is essential to success

  • Having a well thought out support strategy is essential to success
  • Business users are less technically savvy and require more handholding
  • To scale, you need to make people comfortable with on-line support
  • To maximize profitability, you need to bake support into the product over the longer term.
  • Initially, however, it’s likely you’ll need to  provide personal support to compensate for gaps in the product and/or training materials

These are some of the insights I gained from the panel this morning.  What have you done to get the revenue flywheel turning for your SaaS business?

Post to Twitter Tweet This Post

Tags: , , , , , , , , , , , , , ,
Posted in How to, Marketing strategy, SaaS | No Comments »

Social media for B2B Marketers via Paul Gillin

Monday, May 3rd, 2010

A lot of what we read and hear about social media focuses on how businesses can use it to market to consumers (B2C).  Yet, as a business-to-business marketing consultant, I’m far more interested in its B2B applications.

This is perhaps the main reason I was looking forward to Paul Gillin’s breakfast seminar at the Massachusetts Technology Leadership Council last week. The other reason is that Paul has an uncanny ability to connect the dots in ways that add new meaning to any topic that he addresses.

B2B Marketing differs from B2C marketing

Paul distinguished between B2B marketing and B2C marketing by noting that because B2B purchases are often bigger, more complex, and ultimately “bet the company” decisions.  Therefore, the focus is on value, and then service and support.

Most buyers have a rigorous process for ascertaining value because they know that they will have to live with their decisions for a long time.   This process includes seeking expert advice.

Winning depends on influencing the experts

As validated by a 2008 Marketing Research study that Paul cites, the experts they rely on include employees who have experience with the product or vendor, analysts, and peers in that order.  Although the decision makers don’t ignore vendors’ marketing materials, personal recommendations carry much greater authority.

Winning therefore depends on building relationships with the experts–and those that influence them.  Today, much of that influence is happening through social media, so that’s where vendors need to be.

Strategies for determining who is influential and what interests them

Paul outlined a number of strategies for figuring out who wields the most social influence and what will engage them.  He recommended turning to peer validation sites such as Technorati to identify candidates and then looking to sources such as presence in the mainstream media, traffic rank, number of inbound links, Hubspot’s website and Twitter graders, and the number and quality of Twitter followers and LinkedIn connections to assess each individual’s level of influence. To learn what interests them most, Paul suggested checking their blog rolls and tag clouds.

It’s about engagement, not merely circulation

As Paul points out, it’s all about engagement, not merely circulation.  Once you’ve identified whom you need to reach you’ll want to treat them like reporters and reach out to them with news that they’ll find interesting.

Nevertheless, it’s important to remember that they’re not the reporters of old–and therefore will have different questions and concerns.  Paul provided a number of examples of engineers that blogged on their technical specialties, CEOs that blog about the issues that face their organization, and others who are passionate about the niches they cover.

Case studies, tips, and more!

Then there were case studies to illustrate each point.  Paul showed examples of how companies used social media to attract attention, save money, get rid of excess inventory, and generate revenues.  He also discussed which social media tactics work best at each stage of the sales cycle.  It will come as no surprise to readers of his earlier book The New Influencers that blogging remains a favorite.

Next were tips for would-be publishers.  Chief among them was the importance of having clear business goals and a strategy for achieving them–at every stage of the sales cycle.  Paul noted that he feels that small business can really excel at social media because they know their niche, are nimble, and are less likely to get caught up in politics.

Another important piece of advice was to “fish where the fish are”.  With Twitter and posts on group discussions linking to blogs–and Facebook’s new “Like” button–the walls around each platform are continuing to come down.

Find out where your audiences congregate and go there to communicate.  Answer questions on LinkedIn.  Post presentations on SlideShare.  Then, you can link back to your site so the engaged can learn more about you and your company.

Finally, recycle and extend.  The same content can serve as a foundation for a blog, a podcast, and even a video.  You can reference it in a LinkedIn group on Twitter or in a comment on someone else’s post.

Read the book

Lots of good advice–but this blog post is just a teaser.  To get the full scoop, you’ll need to wait for the book–due out next January.  For a sneak preview, see Paul’s slideshow entitled B-to-B Social Media–Really.

Post to Twitter Tweet This Post

Tags: , , , , , , , , , ,
Posted in social media, social media marketing | 1 Comment »

Is your company batting .300?

Monday, February 16th, 2009

By Barbara Bix -Sports teams watch video replays to learn from experience and see how they can improve upon their game. In so doing, they examine what worked—for them and the competition—at various points in the game. They also study their performance under various playing conditions.

More than win or lose–it’s how you play the game

The goal is not so much as to see what cost the game, but to note specific behaviors that contributed to the win or loss—at crucial points in the competition. Only that way, can they reduce future vulnerabilities and replicate success.

Will deeper scrutiny increase sales?

Similarly, businesses that have Six Sigma programs fine-tune their manufacturing operations to weed out errors and reduce expense. Even health care organizations have begun to study what works and what doesn’t to isolate opportunities to save lives and delay the progression of disease. That said, relatively few companies have dedicated the same scrutiny to determining what it would take to accelerate revenues. Those that do tend to focus on sales performance—and reasons for wins and losses.

Shorter sales cycles are like base hits

In our experience, the real opportunity is shaving time off the sales cycle—rather than just improving the close ratio. It’s not uncommon for companies that sell professional services and other complex solutions to experience six to nine month sales cycles—with each extra month delaying recognition of tens of thousands of dollars of revenue. And the opportunity for delays is abundant.

Eliminate sales obstacles to speed the sale

If you look at the typical buying process: there are at least four major stages: awareness, interest, evaluation, selection. Each of these stages contains multiple hurdles as evaluators gather the information they require to minimize risk and assure themselves that sellers will deliver the promised benefits. Each of these hurdles can add weeks or months to the sales cycle. For example, with everyone’s busy schedules just checking references can postpone a sale by several weeks.

Web 2.0 reduces control over the sales process

Identifying potential delays is a major challenge. In the old days, the salesperson controlled most of the sales process and could often provide valuable insights into what worked and what didn’t—if he or she had the time to debrief managers at the home office. In today’s Web 2.0 Internet world, however, influencing the outcome—and even finding out what happened is more difficult than ever before.

Social media means sales comes late to the party

In many cases, the deal may be mostly done, before the buyer ever contacts the company. First, stakeholders may research options on the web, learn more about various products on the vendors’ websites, form their impressions of the company by postings in the blogosphere, and even contact current customers directly for references–after finding their names in press releases or company case studies. In some cases, companies can gather information about prospective buyers—and their intentions—by monitoring website activity. In other cases, buyers build their impressions based on interactions with their party sources—and sellers have no visibility into what transpired or the impact.

Deep insights drive sales

So, what’s a seller to do? Unlike at sports events, you can’t watch an instant replay. Sometimes the only option is to interview prospective buyers directly. Those that do can then find out who was involved in the buying process, how they gathered information, what impressions they formed of the company and its competition, and what caused them to move forward—at every stage of the buying process.

Actions speak louder than words

Although dialogue doesn’t offer the same fidelity as a video camera, an experienced interviewer can often find out what happened at every stage of the process. Because humans have limited awareness of their own motivations, this focus on behaviors and actions, is far more useful than buyers’ insights as to what factors affected the final outcome.

Base hits add up to runs scored

Once sellers have the play-by-play information in hand, much like the sports teams we discussed earlier, they can reduce vulnerabilities and replicate successes. And by improving their strategies, tactics, and execution at every stage in the process, they’ll almost certainly shave time off the sales process—and they may even close more deals.

Post to Twitter Tweet This Post

Tags: , , , , , , , , , ,
Posted in Marketing strategy | 1 Comment »

The fastest way to accelerate revenues? Just accelerate referrals!

Tuesday, October 7th, 2008

Let me ask you a question. Are you missing out on business opportunities because prospective clients either don’t know about all of your services—or don’t fully recognize the value that you could deliver to their businesses?

Would these companies be more likely to buy if they knew how others have benefited from your services? If so, maybe it’s time to tell them.

Better yet, let your current clients do the talking. But, make it easy for them to share their experiences with a wide audience—rather than just telling those they know who are in similar circumstances.

Launch a customer case study program.

Customer case studies showcase successes

A customer case study program showcases the successes that current clients have achieved as a result of engaging your firm. Whereas your service descriptions merely describe what you do and how you do it; your client success stories bring your services to life. Each paints a picture of the situations your clients typically face, the obstacles they need to overcome, and the dramatic impact that using your services has had on their companies’ overall success.

Everyone loves a good story

Effective case studies engage prospective clients by telling a story that captures their attention—because it’s also their story. These narratives begin with a description of your client’s business. Next, they describe the crisis that caused that client to seek out your services.

Then, customer case studies detail exactly how your firm helped the company overcome the obstacles standing in the way of their success. This helps your readers easily visualize how you would help them address their own situations. Finally, the most effective client case studies drive home the value that your firm delivers by translating the technical merits of your services into dollars and cents.

Client case studies shorten the sales cycle

Well-written success stories are invaluable marketing tools at almost every stage of the sales cycle. Deploy them in on your website, as sales collateral in pocket folders, and as featured articles in your monthly newsletter to accelerate your clients’ buying process .

Early on, case studies help prospective buyers recognize their need for your services by describing your client’s dilemma in a way that is painfully familiar to them. Later in the sales cycle, these same case studies create a sense of urgency about buying because everyone wants to “keep up with the Jones”.

Client success stories also help your organization raise awareness of your services. They can elevate your company above the competition by associating your brand with the better known brands of some of your high profile clients.

Customer case studies also attract media attention because they are relatively easy to turn into meaty articles. Reporters especially like the fact that you have already identified sources willing to speak on the record.

Client success stories attract web traffic because they are rich with the keywords that your most promising prospects enter when searching for solutions like yours. Placed in newsletters—or featured in your practice’s blog—client success stories can help keep your practice top of mind with prospective clients.

Finally, client success stories remove obstacles to the sale. They build confidence that your solutions will achieve the promised results. Moreover, by quantifying the value that your clients received, client success stories help decision makers justify an investment in your services.

Client case studies keep on giving

There’s no doubt that client success stories are versatile sales tools. Yet, many of our clients hesitate to launch customer case studies programs because they worry about imposing on their best clients.

To their delight, however, our clients often discover that their clients are happy to discuss their experiences and look forward to being featured in an article that positions them as leaders in their industry.

Many also find that that the interview itself strengthens the relationship. It turns out that just reflecting upon the benefits they derived from working with our clients, reinforces our clients’ clients’ perception of the value they received. As for our clients, they benefit from gaining a deeper understanding of their clients’ requirements and often uncover other opportunities to serve them.

You can never have too many client success stories

Once they realize all the benefits of doing client case studies, many of our clients ask all their clients to collaborate on customer case studies. Their goal is to get at least one success story for every service they provide in each industry they serve—since all their clients continue to believe their needs are unique.

So, here’s another question. Shouldn’t you start leveraging your clients’ satisfaction to cross-sell your business to existing clients and attract new business?

Post to Twitter Tweet This Post

Tags: , , , , , , , , , , , , , ,
Posted in Marketing communications programs | 4 Comments »

Integrated Marketing Campaigns – What happens when they’re not?

Wednesday, September 24th, 2008

Here’s a response I received last week–after posting a complaint on the offending company’s online feedback form about a misleading product offer.

“Thank you for your e-mail regarding your account. It is always our aim to provide the highest level of customer satisfaction. We are always concerned to learn that any customer is unhappy with the service we provide.

All applications are processed by our Customer Recruitment Department, so you will need to contact them directly [at phone number] with your request.

I must also advise you that if we do not hear from you within eight weeks of the date of this e-mail, we will assume that your complaint is resolved. We apologize for any inconvenience caused.”

The note ended with the writer wishing me his kindest regards.

Branding is the sum of the buyers’ experiences

This communiqué came from a business that regularly spends exorbitant amounts of money on branding their company, extolling the virtues of their products, and encouraging prospective customers to buy. Yet, they had clearly not spent as much effort developing their post-sales strategy.

What did this company do wrong? Rather than addressing my concern, the representative first gave lip service to the importance his company places on providing “the highest levels of customer satisfaction” Then, he suggested that I turn to someone else in his company for help. The buck clearly didn’t stop with him.

This “service” representative also made it clear that the onus was on me to resolve the issue. Finally, adding insult to injury, he apologized for the inconvenience he and his company must surely have been aware they were continuing to cause me.

What do you think my impression was of this company? What was the ultimate cost of this communication to the company? What could this representative have done differently to preserve good will–if not the sale?

When you think about these important questions, the answers are probably obvious to you. Why weren’t they obvious to the company in question?

Return on marketing investments are not always positive

It just didn’t add up. This company had invested in a direct sales force to sell me the product. They had invested significant sums in free gifts to sweeten the offer. Yet, in just one email communication, they had succeeded in reversing all the efforts they had made to get my business. Worse, they may have jeopardized any possibility of doing business with me in the future.

Chances are that many of you have received similar missives from equally well-known companies. How do strategic errors like this happen and what can companies do to prevent them?

Product Development – Giving buyers what they want the way they want it

Two posts back, we discussed the fact that if you want to speed up purchases, you need to know what’s important to customers and give them exactly what they want, the way they want it. This company clearly missed the boat. They got the core product right, but neglected to consider the ancillary services required to deliver it satisfactorily.

Although many companies think of product development as ending at launch, that’s not how buyers see it. Rather, buyers view the product in terms of their entire experience—from pre-sales offers, to purchase, to conformity with their expectations about functionality and ease of use. When their overall experience is positive, they buy again. When it’s not, they may even go so far as returning the product or canceling a service.

Nevertheless everyone makes mistakes. When businesses take steps to rectify the error, many buyers will give them a second chance and consider other products. When, on the other hand, companies are cavalier in their treatment of complaints, dissatisfaction can escalate. In the worst scenarios, buyers refuse to buy any products from the company and significant sums of promotion dollars spent on branding the company also go to waste.

Integrated marketing campaigns begin with integrated product development

What can businesses do to avoid these consequences? Here are some suggestions:

  • Re-define “product” success to include the buyers’ ultimate satisfaction 6 to 12 months following the purchase, rather than mere execution of a sale.
  • Encourage a culture where everyone in the company is motivated to personally contribute to the advancement of buyers’ satisfaction.
  • Involve every internal department in the product development process to increase the chances of anticipating all buyers’ concerns, avoiding missteps, and ensuring seamless delivery.
  • Ask them to research what actions their organizations can take to stimulate delight in their own areas of expertise—and what practices they’ll need to avoid.
  • Review the ultimate proposed delivery process from the buyers’ perspective. What issues might arise? What can the company due to avoid them altogether? For unavoidable issues, what steps can be taken to resolve them sooner rather than later?
  • Test the process with real users before launching and correct as necessary.
  • Follow up on all system failures and take corrective action.

One manufacturing concern I worked for convened cross-functional teams weekly to review and determine the root cause of all customer-reported problems. First, however, they classified any shipment that resulted in dissatisfaction—for any reason–as “dead on arrival”.

Marketing Research shortens the sales cycle

At BB Marketing Plus, we work with clients to look at the whole picture, upfront, from the perspective of prospective buyers. To step into our clients’ buyers’ shoes, we do a lot of primary marketing research but we also gather information from internal experts–such as sales people and customer service personnel–who know from experience where potential pitfalls lie. Cross-functional development teams then use this knowledge to guide the entire product development and launch process.

We find that mapping the buying process —and finding out exactly what prospective buyers expect at every stage—greatly increases our clients’ ability to hit the mark with both their product offerings and their marketing messages.

How does your business find out what’s important to prospective buyers so that you can give them what they want—and do it their way?

Post to Twitter Tweet This Post

Tags: , , , , , , , ,
Posted in Buying process model | No Comments »

Will prospective buyers turn to you when they’re ready to move forward?

Friday, August 8th, 2008

Will prospective buyers turn to you when they’re ready to move forward?

Getting the sale depends on affirmatively answering all three of the following questions:

  • Have they heard of your business?
  • Do they know that you can address the problem?
  • Will they remember you when it comes time to buy?

Brand awareness is not sufficient. Think back to your own experience.

Sure, you’ve lost sales because prospective buyers haven’t heard of your business. But, I’ll bet you’ve also lost business because prospective buyers just didn’t realize that you offered a particular product or service.

For example, three years ago, when I needed my hedges trimmed, it never occurred to me to call the arborist who prunes my trees. That is, not until I asked a neighbor for a reference and she told me she used my arborist.

I was taken aback. Even though I was highly satisfied with his services, it just never occurred to me that he also trimmed hedges. That’s because in my mind he was a “tree specialist”.

And, my mistake was not uncommon. In fact, most people only think of your business as doing the last thing you did for them–unless you take conscious steps to correct that impression. We’ll discuss how in a future post.

We’ve also all lost business because we’re not “top of mind” when the buyer finally develops a sense of urgency. We’ll also discuss how to stay high on prospective buyers’ radar in a future post.

In the meantime, we’ll discuss 4 questions you need to answer before launching a marketing campaign or engaging an advertising or public relations agency.

Who do you need to reach?

Often, it’s not just the decision maker. While he or she may make the final decision, many others often influence the sale. Without first engaging these individuals’ support, it’s often impossible to sway, or sometimes even reach, the decision maker. Prospective audiences for your marketing messages may include industry analysts, trusted advisers and internal staff such as technical evaluators and financial personnel.

How do you get their attention?

As Marshall MacLuhan said the media is the message. That means that the delivery vehicle is often as or more important than the message.

Most people are busy performing urgent tasks and are not receptive to messages about anything else—unless the information comes from a trusted source. Examples include advisers, existing suppliers, trade publications to which they subscribe, or presentations that they attend.

If, on the other hand, the prospective buyer is ready to purchase, he/she may be actively seeking out information. In that case, consider adding paid Internet search and website optimization to the marketing mix. If you’re already a trusted source, you may be able to save money and go direct—via telephone, email or direct mail—with confidence that they’ll open your communication.

How do you capture their interest?

Always speak specifically to the most pressing concern of the target audiences–in their language. General messages are not nearly as effective. So, it’s essential to first identify the target audience—and then what’s keeping them up at night.

As we discussed last week, you may need to prime the pump before speaking about your solution—or even the benefits it offers–if the problems your solution addresses are not particularly pressing. Consider developing intermediary messages that heighten prospective buyers’ awareness of the consequences of not addressing the problems your solution addresses. Follow those with messages that generate a sense of urgency about addressing these problems sooner rather than later. Then, and only then, will prospective buyers be receptive to messages about your solution and the benefits it delivers.

When is the best time to deliver your message?

The best time to deliver messages is when the audiences are most receptive. That however is hard to establish. That’s why marketers often say, “It takes 7 impressions to make an impact.”

In some cases, key events trigger needs for services. For example, everyone needs accounting services when taxes are due. Many require accountants when starting or acquiring a business. Nevertheless, the safest approach is to communicate your marketing messages consistently and frequently since recipients are generally pre-occupied with something else. Just by the law of numbers, if you communicate often you’re more likely to get a hit.

Once you get the answers to these questions, you’re ready to begin promoting your solutions.

Next week, we’ll discuss what to do once you prospective buyers’ attention.

Post to Twitter Tweet This Post

Tags: , , , , , , , ,
Posted in Buying process model, How to, Marketing communications programs, Marketing strategy | No Comments »

Making the sale depends on addressing an urgent need

Monday, August 4th, 2008

This diagram describes the buying process. I contend that before anyone buys anything, they need to go through these nine steps. This is true for any purchase.

The higher the risk, the longer the sales cycle…

For low risk, inexpensive purchases like a candy bar, buyers whip through all nine steps in a matter of seconds. When it comes to major purchases, the buying process often takes months and sometimes years. For example, think back to the time it took your own business to decide to put up—or even redo—your website…

Let’s walk through the buying process to begin to understand some of the circumstances that cause sales cycles to stretch out, beginning with the first row of the chart (although in practice the second or third row may happen first).

Only those that have a need will purchase

The first box is labeled HAVE NEED. That’s because no one will buy from you unless they need what you have to offer. Nevertheless, most businesses waste resources promoting solutions to unqualified prospects–those that don’t need what they have to offer and therefore will never buy. For example, my small business sometimes gets sales calls from companies that sell products and services that only make sense for much larger companies.

But first they must recognize that the need exists

The next box is labeled RECOGNIZE NEED. How many of you know of companies that would be much better off if they purchased from you—but they’re continuing to do business in the same way they’ve always done? Chances are if they stopped to consider the real costs of inertia, they’d behave differently–but in the meantime sales cycles stretch out.

Take for example, some of the taxpayers that use the post office to submit their taxes. Many are aware that they qualify for free filing and have computers—but they continue to post their returns via US mail.

Although some subset of these individuals has well thought out concerns about filing over the Internet, most have just never stopped to really examine the pros and cons. In fact, they probably would have filed their returns electronically if they had only learned of the option when they were less busy—or realized in advance just how long they would have to wait in line on April 15 to obtain proof that they had mailed their documents in on time. Nevertheless, they didn’t; so the IRS will have to wait at least another year to consummate the sale.

Then, it generally takes a sense of urgency to generate demand

The third box is labeled READY TO BUY. Many buyers not only need a particular solution; they are aware that they should take action. Nevertheless, they delay buying because the urgent takes precedence over the important. In fact, it’s not uncommon for other initiatives to continue to take priority until the need becomes truly pressing.

To sum up, getting the sale depends on finding prospective buyer that need what you have to offer.  Nevertheless, need is a necessary but not sufficient condition.  Prospective buyers must realize what they’re missing by delaying a purchase and develop a sense of urgency about filling the gap.

Next week, we’ll proceed to row two of the buying process chart and discuss three more factors that can cause sales cycles to stretch out.

Post to Twitter Tweet This Post

Tags: , ,
Posted in Buying process model | No Comments »

Shortening the sales cycle starts with getting into buyers’ minds

Wednesday, July 23rd, 2008

Last week, we discussed the importance of reducing the cost of sales—which I defined as the time it takes to prospect for new clients and close new business. This week, I’d like to discuss how to get started.

Step one is recognizing that for the most part, we can’t convince anyone to buy something from us that they don’t want. When it comes to shortening the sales cycle—as with other forms of behavior change, the thing to remember is that it’s all about attraction and motivation—rather than persuasion and pursuit.

Purchasers decide what they want to buy and equally important how they prefer to buy it. All we can do is make it easy for them to buy from us.

The key to success is anticipating prospective buyers’ needs and then making sure you give them exactly what they want, when they want it, how they want it—before they ask. When we neglect to first understand how our clients prefer to buy, we run the risk of failing to make the necessary connection and causing sales cycles to stretch out. Let’s look at a few examples.

Suppose prospective buyers need a written understanding of what you will deliver, and you don’t have it. Sales cycles will stretch out while you prepare the necessary documents. If they require certain payment terms, and you can’t provide them, the sale stalls until you obtain authorization to give them what they want—or worse, you may end up losing the deal. If they depend on their trusted advisors for recommendations and these advisors aren’t familiar with your business, you’ll need to wait while they perform due diligence, or more likely, miss out on the opportunity altogether.

The better you understand prospective clients’ buying behavior, the greater is your ability to anticipate obstacles, and then take action to shorten the sales cycle. In short, upfront marketing research pays. More about that in a later post.

Post to Twitter Tweet This Post

Tags: , , , ,
Posted in Buying process model | No Comments »

Accelerate revenues, reduce the cost of sales, and boost profitability

Tuesday, July 15th, 2008

For many professional service firms, the single largest expense is the cost of sales. That’s because while your firm’s most senior personnel are prospecting for new business—or convincing decision-makers to buy—these highly-compensated professionals are neither available to close other opportunities, or to deliver billable services.

To make matters worse, attracting—and ultimately closing new business–can take anywhere between several months and several years. In fact, sales people, at any organization that sell services, or products, that prospective buyers perceive as a major commitment, find themselves in much the same situation.

Several factors contribute to elongating the sales cycle. Most prospective clients will only buy from those that they know and trust–and winning trust takes time. Many already have satisfactory relationships with others. While some will give new firms a chance, most end up waiting until a major problem develops before they seriously consider switching providers. Even then, sales cycles often stretch out as decision-makers, and every one of the individuals they choose to involve in their buying process, perform due diligence to minimize risk.

The good news is that there are steps you can take to accelerate this process. Next week, we’ll discuss where to start.

Post to Twitter Tweet This Post

Tags: , , , , , , ,
Posted in Buying process model, Marketing strategy | No Comments »