Make it Easy for B2B Prospects to Buy (address the last mile problem)


"Research is a process where you can spend a lot of money and come up with zero. Isurus guides me quickly through the key decisions, helps me avoid the pitfalls, and makes sure I walk away with high-value implications."

-Vice President of Marketing, Enterprise Content Management System Provider

Joe Radwich

Joe Radwich
Vice President

Make it Easy for B2B Prospects to Buy (address the last mile problem)
05.05.2017

Do some prospects slip away at the last stages of their buying journey, even though it seems your sales and marketing teams have done everything right? You may inadvertently be making it difficult for some prospects to make a decision. The following illustrates how this situation arises, and how to avoid it (names have been masked to protect the guilty).

Yellow Manufacturing seemed ready to buy Acme Tech’s CRM solution. It had conducted research about the solutions available prior to reaching out to vendors set a preliminary budget, etc. prior to reaching out to vendors. Acme provided extensive information about its CRM suite, outlined the different options available, demonstrated everything the solution could do and answered every question Yellow raised. But after months of back-and-forth Yellow put the initiative on hold.

What happened? Acme made it difficult for Yellow to make a final decision by providing too much information. In short, Yellow wasn’t ready to process the amount of information Acme provided and ended up with analysis-paralysis.

The tendency to overestimate readiness to buy stems from a misinterpretation of the new buyer journey. Many articles from the past few years talk about how prospects are 70% (or some comparably high %) or more through their buying journey before they reach out to vendors. These data suggest that when the prospect calls a vendor, they have objectively worked through their needs, know what they want and are at the stage of collecting the specific information necessary for vendor selection.

In reality, for many prospects the first 70% of the purchase journey focuses on the rudimentary elements of the buying decision. Yellow identified the problem that needed to be solved, the type of solution that might be able to help them, and some vendors that provide that type of solution. Their knowledge was still broad and thin when they reached out to Acme and competitors. Yellow may have been through 70% of their journey, but as with many situations in business and in life, it’s the last mile where the real learning, thinking and challenges take place.

When Yellow reached out to Acme CRM, it still needed to determine whether to invest in a solution at all. By providing stacks of information about its products, Acme increased the dimensions Yellow needed to consider, raised questions Yellow hadn’t thought of before, and made the solution and decision feel too big. Collectively this slowed down the decision process and eventually knocked Yellow out of the sales funnel.

This confusion about Yellow’s readiness to purchase isn’t entirely Acme’s fault. Prospects like Yellow can contribute to the impression that they are an informed buyer. Consciously or note, Yellow worried about being taken advantage of by Acme’s sales team and process, and presented themselves as knowing more than they did. Yellow knew the buzzwords, and had specific questions—they talked a good game. In addition, when faced with complex questions, people often substitute a smaller, easier to understand questions in place of the hard ones. Many B2B technology solutions raise big picture considerations about business processes, integration, how ROI will be measured, etc. The list of specific questions Yellow asked Acme CRM reflected a need to get their head around the solution, rather than an indication that they just needed a few more details to finalize their selection of vendor.

Improving the last mile.

Vendors can implement two related strategies to improve their effectiveness and win-rates during the last phases of the prospect buying process.

  1. Map the last 30% of the buying journey in more detail
  2. Use a prescriptive sales approach

Mapping the last 30% of the buying journey

When B2B marketers map the buying journey, many tend to focus on the steps in building awareness and consideration, which happens to be where marketing has the most responsibility. However, by paying as much attention to mapping what happens after a prospect engages with the sales team can enable their company to close more deals. Some of the key aspects to explore include:

  • How knowledgeable and informed is the typical prospect when they begin to interact with the sales team. This helps marketers and the sales team set a baseline for creating materials and processes that speak to prospects in a way, and at a level, they can understand.
  • Identify the 2-3 core drivers of the buyers purchase motivation—even when buying the most complex product, most prospects are focused on improving a handful of key activities. This will provide a framework for marketers and sales team to speak to the benefits that prospects care most about – instead of a range of things that are interesting but unlikely to influence their purchase decision.
  • Determine the internal barriers your internal champion is likely to encounter and provide data and recommendations for how they can overcome them. Once your champion is sold, the deal can still be derailed if they cannot sell it internally.

Use a prescriptive selling approach

When prospects reach out to vendors most are still trying to understand what solutions would be the best fit for them and whether to should invest at all. Many ask for different options because they don’t really know what they need and hope that one of the options presented will stand out as the right choice for them. Instead too many options can confuse the issue. Research conducted by CEB shows that vendors that take a prescriptive approach—provide a recommendation with a clear rationale instead a series of options—close significantly more deals.

That said, it is important for your recommendation to be in line with the core drivers of the prospects purchase motivation. Prospects tend to reject solutions they view as too broad in scope relative to what started them down their purchase journey. Put another way, presenting your entire suite of products can knock you out of the running if the prospect is focused on a single module.

Making it easy for prospects to buy

The vendor that makes it easy for Yellow to make a decision by presenting information they can understand, addressing Yellow’s core needs, and presenting a recommendation instead of options, is most likely to win Yellow’s business.

Jeana McNeil

Jeana McNeil
Vice President

Know thy enemy: How to overcome barriers in B2B technology sales
03.29.2017

The Art of War advises that we can outsmart opponents and avoid battle when we “know thy enemy”.  While marketers typically define direct competitors as the enemy, internal barriers within prospect organizations pose equal peril.

Isurus has seen many innovative ideas in 20 years of B2B market research for technology companies.  Some ideas meet great success out of the gate, others languish for years before taking off, and some recede and disappear altogether.  Through this experience, we’ve identified four major reasons that prevent prospects from adopting new technologies.

Satisficing:  Inertia poses a strong barrier for products that improve on an existing process or system.  Decision makers start with a mindset of “if it’s not broken, don’t fix it”.  This is especially true with complex systems, where change leads to significant disruption.  Unless the status quo is broken and painful, the new product needs to show large improvements in cost savings, productivity, competitive advantage, and the like, to overcome the inertia.  Satisficing also occurs when decision-makers or end users lack a point of comparison for their existing system: The current system seems okay until they step back and compare it to what’s possible.

Competing priorities:  Purchase decisions are made in the broader context of organizational priorities.  A new product competes with all the other technology projects, even if they address a completely different need.  For example, a new supply chain management application competes with a virtual network automation project.  A new investment must prove why it is better than the status quo, and why it deserves resources that could be allocated to something else.

Pain of transition:  Gone (mostly) are the old days of giant ERP implementations that were years and millions over-budget, and earned the permanent scorn of end-users.  Still, some level of process change and learning is inherent in a new system implementation.  The benefits of the new system may depend entirely on successful adoption by end users. For example, if Sales doesn’t enter information into the new SFA system, it can’t deliver the intended benefits.  The decision to buy a new system will take all this into account: What is the level of change required for the customer to realize the benefits of the new solution?  How realistic is it that the customer organization can achieve that change, and what will be required to do so?  When is the right time to embark on that journey?  The benefits of the new solution have to outweigh the pain of transition, or minimize the pain altogether.

Ecosystem dependencies Some new products depend on other processes, technologies and systems to succeed.  These dependencies occur at a macro level and within individual organizations.  Subscription pricing for software is a good example of macro level dependencies.  Fifteen years ago, software providers experimented with the ASP model that enabled customers to license major business applications on a yearly basis instead of making a large up-front investment.  The subscription model failed to gain traction until virtualization and cloud technologies evolved to make software-as-a-service reliable and cost-effective.  At a micro level, an individual prospect needs to have the ecosystem in place to support a new product.  For example, a mobile device management solution will resonate much more with companies that allow Bring Your Own Device (BYOD).

It’s worth stepping back to consider how these four patterns apply for your product or market.  Start by determining which barriers are relevant and most important in your market.  While they are all present to a degree, typically one or two will rise to the top and pose a bigger challenge to your success. Source the data from internal expertise and experience, insights from Sales, or formal market research.

Then decide where the challenge is most effectively solved:  Is it a product problem? For example, is it just too complicated for users to adopt?  Is it a Marketing problem–are we targeting the right prospects with the right message?  Is it a Sales problem–does Sales need to engage stakeholders to address change management concerns?

Approaches to mitigate each barrier include:

  • If satisficing is a top barrier, Marketing and Sales need to highlight hidden pain points that the market doesn’t yet recognize. This can include identifying new stakeholders who are most likely to be unsatisfied, or to have the most to gain from disrupting the status quo.
  • The pain of transition may require that the implementation process be a focal point in the sales process, to show a clear and successful methodology for achieving the goals for the new system.
  • To compete against other priorities, Sales needs to understand IT’s broader plans and goals. This knowledge equips Sales to make the case for your solution. It may also provide a reality-check on the likelihood of a sale, and timing of the decision.
  • Mapping ecosystem dependencies at a macro level informs the market opportunity analysis and business case for a new product. If critical elements of the ecosystem are missing, adoption will be slower, take longer, and require more evangelizing.  At a more micro level, knowledge of the ecosystem dependencies can be implemented to improve lead generation and qualification.

In summary

Successful adoption of innovative products (at an individual customer or for the market as a whole) depends on many factors.  Incorporate this analysis into your strategy to effectively allocate resources against the barriers present in your market.

 

Joe Radwich

Joe Radwich
Vice President

Speaking to Trust in B2B messaging
03.10.2017

Communicating trust in B2B sales and marketing messages requires showing, not telling. Here’s one way to do it.

In many B2B sectors, Trust, or Trustworthiness, sits near the top of market’s vendor evaluation matrix. Given that trust is earned over time presents a barrier to prospects switching to vendors that they don’t have experience with. When vendors say Trust me, at best the market views it as marketing-speak, at worst it conjures up images of unsavory car salesmen.

At a high level trust equates to delivering what’s promised. This promise consists of a mix of discrete rational and emotional elements (e.g., ability to understand the customer’s need, expertise to provide the right solution, on-time delivery, confidentiality, financial stability, makes me feel valued, has my best interests in mind, etc.). The emotional dimensions need to be experienced to be credible. However, using the rational elements in value propositions and messages begins to build trust in the marketplace – it shows that the vendor understands what is important to customers and prospects.

Finding the right elements to emphasize becomes the challenge. Primary research offers different approaches that help marketers understand how to build trust with prospects. Quantitative research uses statistical analysis to measure the impact of specific attributes in cultivating trust. Qualitative research explores the personal dimensions of trust in B2B relationships. The following provides a high-level overview of how primary research can help identify the core drivers of trust.

Quantitative research

Statistical approaches such as regression analysis can measure the strength of the relationship between trust and specific service/product attributes, e.g. to what degree does billing clarity drive trust and how does its influence compare to other factors such as on-time delivery, or security.

The first step in regression analysis is to generate a list of attributes that likely contribute to trust; the more specific the attributes are, the better. Most B2B marketers start their lists with the intuitive ones such on-time delivery, product quality, no hidden fees, etc. But it is important to include factors along the customer journey that may seem small, but can have a big impact on trust such as accurate billing, things work the way they were described in the sales process, consistent account reps, does not go over my head to win business, etc. Some B2B marketers can generate diverse and comprehensive lists based on the team’s collective knowledge about the market, others find conducting a small set of customer interviews helpful.

The next step is to conduct a survey with customers/prospects to measure how the company performs across the discrete elements related to trust and overall trustworthiness. A regression analysis of the data will identify the strength of the correlations. A key benefit of regression is that it derives predictors of trust by exploring how customers view their vendors and relationships, rather than through importance ratings (what customers say is important and what drives their perceptions in the real world may be different). Once the core drivers of trust are identified they can be leveraged in sales and marketing communications.

Even if a B2B marketing team does not have the budget to conduct survey research with customers and prospects, going through the process of systematically identifying the possible drivers of trust can help the organization. It provides a framework for the team to conduct an internal assessment of how the organization performs across these dimensions and identify any critical gaps that should be addressed.

Qualitative research

Qualitative research approaches such as open-ended, in-depth interviews (IDIs) with customers and prospects can provide fodder for the personal narratives around trust. IDIs are a good methodology to understand how individuals develop opinions and to explore the emotional side of business decisions. In IDIs, individuals are asked to talk about experiences such as: When a vendor exceeded their expectations, let them down, provided peace-of-mind in a crisis, how these things affected them personally, etc. Their responses provide insights into the characteristics of vendors that customers deem trustworthy and their emotional connection to those traits. B2B marketers can use these themes, tonality, and vocabulary to develop value propositions and messages that resonate with the market and speak to them in their own words.

You can trust us because…

At the end of the day real trust is earned through repeated successful customer interactions. However, B2B vendors can credibly position themselves as trustworthy, by demonstrating that they understand what it takes to earn a potential customer’s trust.

Joe Radwich

Joe Radwich
Vice President

Developing a mid-market strategy for your enterprise product/service
02.21.2017

The mid-market is an unfulfilled market opportunity for many vendors that serve enterprise segments. Rethinking the needs of the mid-market can improve a vendor’s chances of succeeding with smaller customers.

The mid-market challenge

As enterprise markets mature, vendors look to the mid-market as a growth opportunity that looks primed for entry.  Many enterprise vendors enjoy strong brand awareness and the mid-market views enterprise products/services as the “Cadillac” that’s out of reach. The mid-market knows that enterprise-class products provide more capabilities than what they use today and agrees that these extra capabilities provide value.

Given these market conditions, Sales finds it easy to get sales calls and schedule demos. The mid-market likes the attention from premium providers. However, these interactions often don’t lead to as many sales as expected.

Many enterprise vendors frame the problem as a Sales and Marketing challenge, where the mid-market just doesn’t understand the value of the solution, but with the right message or sales process, they could be made to see the light.  This is misleading – a range of factors prevent the mid-market from upgrading to enterprise class solutions, even if they would like to do so.

Lessons from BMW

Although BMW is a consumer brand, its experience moving from the luxury market to the mass market offers relevant lessons for enterprise vendors seeking to grow in the mid-market.

BMW possesses considerable brand equity: Most consumers are aware of it, view it as a premium product, and acknowledge that it produces a higher quality vehicle than say, Chevy and Ford. Unfortunately for BMW, despite this brand equity, the market for luxury cars is finite. BMW’s mid-market opportunity for growth is the average consumer. BMW recognizes that it cannot gain sales with average consumers by emphasizing its quality or advantages in its sales and marketing. Consumers don’t need to be convinced of its quality or how it is better than what they drive today – they already know.

Marketing campaigns can attract a small sub-segment of average consumers willing to stretch their budgets to enter the luxury segment. However, this low hanging fruit doesn’t represent an opportunity for sustained growth.

BMW recognizes that price is the limiting factor and has implemented multiple strategies to make its vehicles more appealing and feasible for its mid-market with varying levels of success.  These include:

  • Offering competitive financing
  • Leasing vehicles at a monthly rate average consumers can afford
  • Cultivating a used BMW market
  • Introducing lower-priced models for entry level buyers

BMW’s mass market challenges seem obvious, and they are. What’s less obvious is that these same dynamics unfold in the B2B mid-market when it evaluates enterprise-scaled solutions. The mid-market’s barriers include:

  • Budget limitations: The mid-market faces greater near-term financial constraints than enterprise markets and while they understand ROI arguments, in the short term they simply do not have the budget available.
  • Resources to execute: Even if they have the budget many mid-market organizations lack the people or processes needed to take advantage of the features/functionality of robust solutions designed for the enterprise. This reduces ROI arguments.
  • Limited needs: Many mid-market organizations do not have enough volume of data, transactions, production, throughput, etc. to require a robust solution, again reducing the ROI argument.

Strategies for the mid-market

One approach to addressing these barriers follows BMW’s lead and asks: How can we make the product/service affordable/feasible for the mid-market? Strategies to consider include:

  • Lowering prices: Can prices be lowered enough to attract mid-market customers? This is the simplest strategy, but also the least appealing – modest price cuts typically do not attract meaningful number of the mid-market and leaves money on the table from enterprises that would have continued to pay the higher price.
  • Pricing structure: Can the upfront cost be reduced by tying it to usage, number of users, or some other factor that scales along with the size of the customer. The growth of cloud applications in enterprise technology is due in large part to the short-term cost structure that enables organizations to rent software they would not be able to buy outright.
  • Develop smaller solutions: Can the product/service be scaled down to align with the functionality the mid-market uses and the budgets they have available? This could be offering scaled down version or developing a new brand altogether.
  • Help customers use the solution: Can programs, trainings, etc. be developed that would help customers grow into the solution? Some mid-market organizations need help envisioning how they could use a robust solution, and the steps they would take to make it work, etc.

These strategies do not come without risk. Lowering pricing and offering scaled down options may increase interest within the mid-market, but may also cannibalize enterprise customers willing to accept less if they can lower their costs.

Determining which of these strategies makes the most sense for any given market requires insights into four broad areas:

  • The core features/functionality used by the mid-market today
  • Their resources and processes
  • Barriers to change
  • What they pay today

These insights can be collected in a number of ways including.

  • Competitor analysis: Vendors that specialize in the mid-market have identified its core needs and general price tolerance.
  • Sales reps: Sales reps have direct contact with prospects and can also provide feedback into the aspects of the solution that generate the most interest, why deal stumble, etc.
  • Primary research: Primary research can provide direct feedback from the market in terms of its needs, solutions it uses, willingness to invest in new solutions, etc.

In the end the most important thing to remember when entering the mid-market is that it is different than the enterprise market. The businesses aren’t just smaller, they face a different set of needs and limitations. Understanding those differences can greatly improve your chances of success.

Joe Radwich

Joe Radwich
Vice President

Does your VOC program encourage purchase behavior?
02.07.2017

Your NPS or customer satisfaction survey can increase the frequency and number of purchases a customer makes over time.

Research by Sterling Bone of Utah State’s Huntsman School of Business indicates that starting customer feedback surveys focused on what you do well increases NPS and satisfaction scores in the short-term, and can increase the frequency and number of purchases a customer makes with you over the long run.

The boost in NPS or satisfaction is expected – asking people questions like “What was the best part of your experience?” puts them in a more positive frame of mind than does asking them to remember how you’ve fallen short. And enough existing research shows that people in a more positive mood give higher ratings on surveys.

That this positive nudge influences purchase behavior months after the survey comes as a surprise. We usually think about how experiences drive the ratings on surveys, not how surveys may influence behaviors. The researchers have two hypotheses for this effect: Asking “what went well?” generates a positive feedback loop by surfacing good memories for the customer; and, that people unconsciously try to avoid cognitive dissonance – if we said something positive about a product, we don’t want to seem inconsistent by not continuing to purchase it.

The findings raises the question: Should you adjust your voice-of-the-customer or NPS program to take advantage of this phenomenon? National brands such as Subway and Jet Blue already incorporate these ideas into their customer feedback programs. There are four broad justifications for making the change.

  • Traditional research philosophies reject this type of manipulation and strive to minimize any impact the artifice of a survey has on the results. We don’t want to bias the data. The reality is that most research is biased (more on that later). If asking about positive experiences primes some customers to be happier with a product or service, then the opposite is probably also true. A survey that asks customers to focus on problems may prime them to be less happy then they actually are. More research is required to answer that conclusively, but it would be surprising if the phenomenon only works in one direction.
  • There is bias in every data set – the mistake is not recognizing its nature. If you know what it is you can use judgement to account for it as you make inferences, and strategy based on that data. If your VOC program shifts from a problem-finding focus to a positives-focus, expect an increase in NPS and satisfaction at first due to the positive bias. Scores will stabilize as the new protocol is repeated over time. The easy mistake to make would be to forget that the one-time increase in the metrics is due primarily to a change in the survey instrument. But if you account for the one-time jump in ratings and reset your baselines, having a positive bias to your surveys isn’t a problem in and of itself.
  • Some strategists believe that it is more effective for companies to focus resources on enhancing what they do well instead of on potential areas improvement. The underlying idea is that whatever a company does well is likely its biggest competitive differentiator and maintaining those strengths should be a priority. Proponents of this approach also point out that identifying and fixing problems does little to attract new customers. If your company embraces this philosophy, focusing your voice-of-the-customer programs on the positive will provides the data you need to strengthen what you already do well.
  • For most companies, voice-of-the-customer programs are a cost center – as much as they help companies in the long-term, it is difficult to tie the insights gained to a direct financial benefit. This explains why many VOC programs and other customer surveys are scaled back when budgets get tight. If Dr. Bone’s research stands up to further validation, using positive questions to influence purchase behavior may help justify the cost of voice-of-the-customer programs. Using A/B testing of the survey types and their correlation to long term customer purchasing data would provide you with the insights to show the financial impact of your program.

So what is Isurus’ point of view? To start with, we agree with the broader implication that customer surveys are touch points that influence customer opinions. Customer surveys can…

  • Show that you care about customer opinions
  • Feel relevant to customers, or conversely make it seem you don’t understand their needs
  • Be either a pleasant or a tedious experience for customers
  • Show your hand about future intentions
  • Feel like a burden to customers if they get too many
  • Lose credibility if customers never see any changes based on their feedback

As with any customer touch point, you should manage it to ensure a positive customer experience. Customers should believe the survey was worth the effort they put forth, and that you respect their time and opinions.

The decision to use a positive orientation in your VOC program depends on your competitive situation. If all is going well in terms of growth, profitability, etc. a positive orientation towards your VOC program will likely provide some benefit. However, if growth has slowed, customers are leaving, a competitor is making inroads into your market, etc., you need to know what has gone wrong. Your historic strengths may not be as differentiating as they once were and emphasizing them may contribute to your decline.

For more information on the research visit: “Mere Measurement ‘Plus’: How Solicitation of Open-Ended Positive Feedback Influences Customer Purchase Behavior,” by Sterling A. Bone et al. (Journal of Marketing Research, 2016)

Joe Radwich

Joe Radwich
Vice President

Re-Thinking the C-Suite Sales Strategy
05.31.2016

Selling to the C-suite or other senior executives is the holy grail of many B2B vendor’s sales and marketing strategies. Vendors believe a senior executive is in the best position to recognize the business value of their solution. We believe selling to the c-suite is not the right strategy for many vendors, based on recent research on decision-making, our conversations with executives and some practical realities. If you plan on moving your sales & marketing upstream, consider how the following trends impact your sales & marketing decisions and strategies.

When we interview executives about their buying processes, they almost always emphasize the important role their team plays in identifying and selecting the products and services the organization uses. Executives see their role as managing the business at a strategic level – they set the direction and rely on their team to execute on those plans through a mix of internal and external resources. Most executives acknowledge that they lack the hands-on knowledge to formally evaluate how a product or service will improve existing processes or help accomplish their vision. Executive managers rely on their teams to identify and vet new ideas and vendors before they become involved in the decision process. As a result, support from a team member provides a far more credible voice than any vendor can have by trying to by-pass the team and going straight to executive management.

Although exceptions exist, in most organizations the senior executives build a team of reports that they trust and communicate with regularly. Although the two groups may have different focuses (strategic vs. operational) in most organizations they generally share an understanding of organizational needs, priorities and opportunities. Only in dysfunctional organizations are their opinions and perceptions radically different. Some vendors worry that middle management doesn’t really understand their own business or how the vendor’s product or service could help them. A way to put this in perspective (assuming you are product marketing manager, product director, director of marketing, director of operations, etc.) is to ask yourself if you have a radically different understanding of your businesses’ goals, challenges, and priorities than your boss and are blind to new opportunities? The answer is probably “no”.

Even when vendors manage to get face time with senior executives, the decision process isn’t a top-down decree. Recent studies indicate that 4-5 people are involved in a typical B2B decision, up from the 2-3 a decade ago. The numbers go higher as the size and significance of the purchase increases. The buying process has also become more collaborative and consensus driven. We expect this style of decision-making to be more prevalent as the management philosophies of Silicon Valley continue to influence businesses in a variety of sectors. As a result, top-down decisions will continue to shrink in most organizations. There are, of course, cases when the C-suite brings in operational products and services without the involvement of their team. But in most of these the executive is proactively looking for something specific, not responding to unsolicited vendor pitches.

And at the most basic level, senior executives are busy people focused on the big picture. Therefore, relatively few discrete products and services are worth their attention. They set the direction for organization, and rarely dictate the solutions to use to accomplish operational tasks. Most products and services help organizations accomplish tasks and processes they’ve already identified as important – few change the strategic direction of the organization. Beyond that, many solutions fall into the category of minutia for executives at large organizations – a product that makes or saves $1 million may not be significant enough to warrant the attention of executives.

None of these factors would matter if vendors had unlimited time and resources. However, most need to devote a limited number of sales people and marketing dollars to areas where they will provide the most return. So how can you tell if it is worth targeting the executive suite? Start by asking a few broad questions (and answering them honestly):

  • Related to your product/service who is likely to know the details of what systems and process are in place and where they are falling short?
  • Who will have the most accurate understanding of how your product/service is an improvement over what they are doing today?
  • How large are the improvements/benefits your product/service brings relative to the organization’s other initiatives and priorities?
  • Based on your pitch, who is the most likely to take your sales call, visit your booth at the trade show, or notice your ad?

In addition to answering these questions it can be useful to map the customer journey from an organizational standpoint, rather than an individual’s perspective: How do prospect organizations become aware of products/services/vendors? Who goes through the discovery process?

It might be that after a systematic review you find it makes sense for your organization to spend the time and effort trying to reach the C-suite. But it could also be that someone in middle management not only gets you in the door, but also is your most effective champion.

Joe Radwich

Joe Radwich
Vice President

Win/Loss Analysis – Triangulating on the truth
05.13.2016

Understanding why deals are won or lost can seem like a game of telephone or “He said, she said”:  The Buyer gives one side of the story, Sales has another, and Marketing brings its point of view too.  Who is right?  Everyone’s partly right and partly wrong.  In our experience, the best process combines all available information streams to triangulate on the truth.

Companies often implement win/loss programs when they encounter a rough patch: Sales have flattened or declined, or a new competitor emerges with unexpected success. These dynamics create internal insecurities, finger pointing, and at worst, eroded trust between functional teams. Sales feels Marketing is out of touch with the front lines, Product Management believe Sales uses price as an excuse, and so on. To settle the dispute, a third party like Isurus Market Research is brought in to provide an objective, outside perspective. With no vested interest in the outcome, we listen to wins and losses with an unbiased ear (e.g. we can tell if comments about price reflect actual decision drivers or if they are a red herring). People talk more openly with a third party than with someone who wants to sell them something. This enables a third party, like Isurus, to elicit insights that are unavailable to internal teams.

While results from win/loss interviews provide significant value, we encourage clients to use the insights we bring judiciously.  No win/loss program or research firm can provide the end-all be-all of reasons for a client’s wins and losses. There simply is no single point-of-truth. The process is analogous to a criminal investigation.

In an investigation detectives take statements from multiple witnesses and often from the same witness multiple times. Rarely do the stories match perfectly. There are inconsistencies across witnesses and from the same witness over different conversations. Lawyers and investigators evaluate the circumstances and possible motivations. Then, as a team, they take these various information streams to develop the most accurate picture possible of what happened. In the end it’s the collective knowledge that makes the difference – not any single interview or perceived circumstance.

Effective win/loss programs have the same dynamics and follow the same process. The sales reps have multiple conversations with the loss, some during the sales process, some after the decision has been made. The product team has circumstantial evidence on how its products fit the specifics of the RFP. Marketing has insights into competitive advantages/disadvantages. Outside research firms like Isurus provide insights into motivations, perceptions and additional circumstantial evidence. Taken collectively these provide the most accurate picture of why the prospect likely made the decision they did.

This is a mix of good and bad news in terms of setting expectations for a win/loss program.

The bad news first: There aren’t any silver bullets. Often by the time organizations engage a third party for a win/loss program they’re frustrated and looking for a single, definitive thing they can do that will improve their sales outcomes. Unfortunately, the solution is more complicated than that. If a single factor makes a major difference most companies would have figured it out long before looking for outside help. In addition, getting the most out of a win/loss program takes work. The functional teams need to spend time together dissecting the lost deals. This includes thinking through all of the information available and figuring out how to square the circle when Sales heard one thing and the win/loss consultant heard another.

Now the good news: The efforts will bear fruit. When functional teams regularly work together to evaluate why they win or lose deals they start to see patterns. They can then make systematic changes that lead to long term success, which is far better than reacting to the one-off circumstance of any individual lost deal. The process also brings the functional teams closer to the end-customer and helps them develop a shared understanding of the value the company brings to the market.

The takeaway: Relying on a partner for a win/loss program will get you part of the way there. But the most successful programs get more than simple buy-in from the functional teams, they bring the teams together as an investigative team. So before you evaluate potential win/loss vendors, you should evaluate your internal teams and how you will work together to triangulate on the truth.

Jeana McNeil

Jeana McNeil
Vice President

The customer decision journey should drive content marketing strategy
05.03.2016

Across the many frameworks available on the topic, there’s consensus that a successful B2B content marketing strategy is built on knowing the target audience, how they progress through the buying process, and their needs along that journey.  Yet, it is rare for marketers to use buyer insights to inform their content market strategy.  Doing so requires a documented content marketing strategy and a recent study finds that only 32% of B2B marketers have one.

If you’re embarking on a new content initiative or evaluating the effectiveness of an existing one the first step should be to develop buyer personas and outline the customer decision journey.

  • Buyer Personas: Personas define who buyers and influencers are, their goals for a purchase decision, their motivations and biases, and behavior in the buying process.  Many B2B decisions involve multiple personas—for example, an executive champion, the day-to-day manager, and the financial decision maker. Effective content speaks to each buyer’s role in the decision, what motivates them (including functional and emotional factors), and the outcome they seek to achieve in the process.
  • Buying and decision journeys: Research from Gartner and others has shown that buyers spend only 32% of their journey interacting with supplier-side content or sales people.   Content marketing has the potential to extend a vendor’s reach into the buying process by engaging a buyer before they might typically contact Sales.  To do so, the content strategy needs to identify what information a buyer needs at each stage of the buying process.  For example, a buyer early in the process of investigating marketing automation solutions needs content that helps them decide whether or not to invest; later in their journey buyers want to examine product features.

Building personas and buyer journeys can draw on data from a range of sources.  The most accessible sources are typically the Sales team and Customer Advisory Boards.  While these perspectives are valuable, they each have blind spots.

  • Sales has visibility into only part of the customer buying process. As noted previously, some data suggest that the majority of buyer activity happens absent any visibility from Sales, therefore Sales is making educated guesses about what takes place in most of the buyer’s journey.
  • Customer Advisory Boards by definition represent only part of your target audience. The criteria, motivations, and journey of the prospect who considers your product and drops out of the funnel, or never considered your product, may be very different from existing customers, especially those on an advisory board.

A more complete view of the market will incorporate:

  • Insights from lost deals: Interviews with accounts who considered but did not buy provide an important complement to the feedback from existing customers or Sales.
  • Industry reports: Studies from industry analysts, management consultants, associations and trade press provide a useful data on macro-level trends and dynamics. Depending on the industry, these reports can provide data on the market’s top priorities and challenges, and investments to date and provide valuable context for understanding the market.
  • Proprietary market research: Custom studies provide data that is directly relevant to your industry, your audiences, and your information needs: 61% of B2B content marketing teams use proprietary studies to create thought-leadership whitepapers, webinars and infographics. These studies can take the form of statistically reliable surveys, or qualitative approaches such as focus groups or depth interviews.

A strategy built on buyer insights will become even more important in the future.  Content marketing received 28% of the average B2B marketing budget in 2016, and most organizations expect spending to grow in 2016 and beyond. This means that each year your content will have to fight through an ever-increasing mass of content in its struggle to break through and win attention from prospects. Aligning your content strategy with the buying journey will increase the relevancy of your content and the likelihood that your investment will produce results.

Joe Radwich

Joe Radwich
Vice President

Are Rising NPS Scores a Red Flag?
03.28.2016

Reports that track NPS scores across a range of sectors—recently reported that NPS scores in the enterprise software sector have increased across the board – most vendors have seen an uptick in their scores. While good news, it raises some questions about the accuracy of NPS scores.

Glass Half Full – Rising NPS Scores Reflect Overall Improvements

Bain created the NPS approach to help companies gain a better understanding of how well they meet customer needs and to provide a structure for addressing areas in need of improvement. The approach has gained widespread use since popularized in the book The Ultimate Question. Like other management approaches that made material improvements to the way businesses operate—LEAN, Six-Sigma, Agile—NPS may have cultivated a genuine shift in executive recognition of the importance of listening, and responding, to customers. If so, this explains the industry-wide increase in NPS scores – by responding to the insights gained in NPS programs, businesses are turning Detractors into Promoters.

We’d like this to be true, but have some concerns.

Glass Half Empty – Increases May Reflect Data Collection Issues

The systematic rise in NPS scores may indicate a methodological problem with data collection – ironically, one that NPS was designed to address. Back in 2009, Bain and Fred Reichheld identified two failures of typical customer satisfaction programs:

  • The average customer satisfaction survey had become an arduous experience for customers due to survey length and minutia covered. This resulted in low response rates and a bias towards happy customers who were motivated to take the survey.
  • Many customer satisfaction programs had become rote: An annual program that executives reviewed once a year and then put on a shelf, with the results never making it to frontline employees.

The NPS approach addressed these problems by proposing a very short survey 3-5 questions and delivering the results in real time (or close to it) to front line employees so they could make the needed changes.

Unfortunately, NPS may be a victim of its own success. The Ultimate Question, did indeed become the ultimate question – every sector asks it. And with the rise of easy-to-use, inexpensive online survey platforms the average person gets NPS surveys weekly (if not daily) from a range of companies they interact with personally and professionally: Their banks, hotels, enterprise software vendors, doctors, auto repair shops, energy providers, restaurants, etc. Combined with the other online surveys they receive, people are now bombarded with surveys. As a result, overall response rates to online surveys continue to decline. No single survey causes the problem, but in a classic tragedy of the commons, the abundance of surveys has lessened their value overall for everyone.

With decreasing response rates the same challenges of traditional customer satisfaction creeps in – happier customers are more likely to take the survey, increasing the ratio of Promoters and raising NPS scores.

Online survey platforms make data collection easier than ever so companies move forward with the survey side of the NPS equation (the easy part) without operationalizing how they will use the data (the hard, and according to Bain, more important part). In many businesses, NPS is run the same way as customer satisfaction surveys used to be – it’s just a metric tracked quarterly or annually, reviewed by management, and never operationalized on the front lines.

NPS remains a useful metric, but may have lost some of what differentiated it from the previous ultimate questions – loyalty, affinity, future purchase intent, satisfaction, etc.

Regaining the Value of NPS

If NPS programs are at risk of providing false positives and therefore losing value as a management tool, what can be done to reinvigorate them? We see two potential solutions.

Find the detractors: When NPS scores are going up, but response rates are trending down, it’s possible detractors are dropping out of the respondent pool. Companies can adjust their data collection efforts to ensure they get a more representative mix of customer experience, by adding a telephone survey to their data collection efforts and having managers, product marketers and executives reach out to random customers as a reality check.

Change the NPS calculation: In the six years since NPS was developed the dynamics around recommendations may have evolved. Social media and online commerce may be lowering the threshold required for the average person to provide a recommendation. Almost every online purchase asks you to provide a rating or review, LinkedIn daily suggests colleagues you can recommend, retweeting and Likes are binary endorsements, etc. The constant rating of experiences may be leading to a de facto grade inflation effect. If that’s the case, changing the NPS criteria for detractors from 0-7 or 0-8 instead of 0-6 may provide a more realistic view of the health of the customer relationship.

In the past six years NPS programs have changed the way companies think about, and measure, their relationships with customers, largely for the better. But as with any tool or approach, it shouldn’t be followed blindly. All good techniques evolve with changes in conditions and circumstances and it may be time to consider refinements to NPS programs.

Joe Radwich

Joe Radwich
Vice President

Use Research to Add Foxes to Your Hedgehogs
02.22.2016

A year of political polling, talking heads and pundits have given a bad name to forecasting and forecasters – especially the segment known as hedgehogs. But for all their flaws hedgehogs can guide their organizations as well, perhaps better, than their counterparts – the foxes. In truth, successful organizations have a mix of both.

The research and literature of the science and art of forecasting divides the world into hedgehogs and foxes. The labels and definitions come from an essay by philosopher Isaiah Berlin.

  • Hedgehogs know one big thing. They hold a specific worldview that they interpret conditions and situations through. In the most extreme, hedgehogs believe all things are guided by a big underlying principle—capitalism, communism, consumerization of technology—to the point of dogma. Even more moderate hedgehogs tend to have biased perceptions which makes their record as forecasters no better than chance. Hedgehogs come in all political, philosophical and business shapes and sizes.
  • Foxes know many little things. They tend to hold back judgements and approach the world from a neutral standpoint, or at least more neutral relative to hedgehogs. Because they aren’t predisposed to view the world through a specific rubric they see a wider set of dynamics shaping situations and conditions. Analysis of forecasting success—getting it right—shows that foxes do a better job than hedgehogs.

This oversimplification of a simplification makes it seems as if foxes would make better managers and leaders than hedgehogs. This isn’t necessarily true. The benefit of being a hedgehog or fox depends on context and the objectives at hand.

The traits that make a hedgehog less effective as a forecaster helps them be effective leaders. Building internal momentum for a new product, entering a new market, reaching a revenue goal or running a startup requires passion and a degree of unbridled optimism and bravado. A hedgehog’s worldview helps them create clear, simple to communicate narrative, of what is happening and what needs to be done. This helps build enthusiasm and commitment among the troops. The fox’s narrative which to a degree says, it’s complicated, it depends on a number of things, and here is the most likely outcome, but not a definite one, isn’t always all that compelling – even if it presents a more accurate description of the world.

The risk of course is the hedgehog’s approach can blind them, and their organization, to competitive and market threats and risks. Many market failures stem in some part from doggedly pursuing a course that is at odds with market dynamics. This is an acute risk in when the conditions or markets are in transition. Startups can overestimate the readiness of the market and the paradigm shifting power of their new product or service. Companies that have been successful doing the same thing for decades dismiss new competitors and ways of doing things. Compounding the problem is that with time foxes can turn into hedgehogs. Internal teams start to view the world from the perspective of their product rather than the other way around. They drink the proverbial Kool-Aid. This is human nature. When you live and breathe your product or service every day it shapes how you understand your customer and markets.

The best leaders and management teams have a mix of traits from both camps – the possess a clear narrative vision informed by a thorough understanding of the dynamics of their markets. The problem is these individuals and teams with these traits are hard to come by. There are only so many Jobs, Bezos, Welches, and Buffetts to go around.

If you worry that your organization has tilted too far into the hedgehog camp, market research can bring foxes, or at least a fox’s perspective, back to your strategies. When done well secondary and primary research can provide an unbiased understanding of the dynamics underlying your market: Your customers’ and prospects’ needs, priorities and opinions and perceptions about their options (including your product/service). With this you get the best of both approaches. The hedgehog’s perspective can rally the troops; the fox’s perspective can point the troops in the right direction.