If you sell B2B it's quite likely that you have a hidden infection that's poisoning your new business sales - and you don't even know it.
You can probably see the symptoms - not enough current sales opportunities, not enough leads, low quality leads that waste more time than they're worth, excessive "lead to close" times, low "lead to win" ratios, an empty sales pipeline or worse, a pipeline full of wishful thinking.
But what's the cause - and what can you do about it?
The root cause is easy to identify - if you just analyse the situation logically. It's the fact that most B2B sales companies have inaccurate, insufficient, scattered or totally non-existent information about their most important source of future sales - prospects where there isn't a sales opportunity. Yet!
But most companies don't even realise the problem exists, so let's do that logical analysis. We'll start with your market.
Your Total Addressable Market (TAM)
There are four kinds of company in your Total Addressable Market*:
- Companies where you're working on a current sales opportunity
- Companies that aren't ready to buy - yet - but that have a need for what you sell
- Companies that you know will never buy what you sell
- Companies that you don't know enough about yet
* Total Addressable Market (TAM) - the number of companies, categorised by geography, size, industry, revenue, etc. that have a problem that you can help solve and that can afford your solution.
If you know a company will never buy from you (locked into another supplier, no current or future need, etc.) you can exclude them. That leaves three relevant categories.
Let's look at each one in turn;
1. Companies with current sales opportunities
You (hopefully) know a reasonable amount about these companies - the people you're dealing with, the business issues they are trying to resolve, their timeframe, whether they have a budget, their buying process, the different people involved in the decision, etc.
Most B2B vendors use a CRM to track such opportunities - and that's great. The main problem here is simple - current sales opportunities usually comprise less than 2% to 4% of your TAM.
It means that you're working on between 20 and 40 current sales opportunities for every 1000 companies in your TAM - if you're lucky.
In six months time you'll have won some of those 20 - 40 deals, you'll have lost some and some may have been deferred. But whatever has happened, you need to replace them with new sales opportunities to make your numbers.
Those new sales opportunities are going to come from the other 960+ companies - but which ones?
In order to answer that you need a Future Sales Pipeline*.
* Future Sales Pipeline - an analysis of companies in your TAM that will be coming to market; when they are likely to start looking, their key business issues, who the relevant people are and the degree of trust and relationship you have with each one.
2. Companies that aren't ready to buy - yet
These companies are the main source of your Future Sales Pipeline. You know they have a need and will be coming to market at some stage in the future. They just aren't ready yet.
When they do come to the market, the more you know about them, their needs, their current situation, their interests and their timeframes the better chance you have of them considering you.
And the more they know about you, about how you can help them, about how you can educate them and advise them, the more likely it is that they will buy from you.
So you need nurture and educate these companies, to build credibility and trust with them before they begin looking for a solution.
Depending on how proactive you are in communicating with them they could comprise anything from 10% to 50% of your TAM. The higher this percentage and the more you know about those companies in your TAM that aren't yet ready to buy, the better your future sales will be.
But in many B2B companies there is little or no visibility of these companies and they often comprise much closer to 10% than to 50% - which leaves a lot of companies in the third category.
3. Companies you don't know enough about yet
The biggest proportion of your TAM is probably comprised of companies that you don't know enough about yet. For many vendors these comprise between 50% and 90% of their TAM - usually closer to 90% than 50%.
What you do need to do with these companies? You need to find out more about them so you can either discard them or nurture and educate them.
(Or, of course, you can just bombard them with digital marketing irrespective of what you don't know about them and hope something sticks- and hope you don't annoy them so much with irrelevant communications that they never call you even when they do have a genuine and current need.
But of course, even though that's a very common approach, you'd never do that, would you, because you realise it just doesn't work.)
The bottom line is that the more you know about the companies in your TAM the more chance you have of selling to them and the fuller your Future Sales Pipeline will be.
Your Future Sales Pipeline
If you want to keep selling after your current sales opportunities have been won or lost - and if you want accurate forecasts beyond 3 months - you need a Future Sales Pipeline.
This obviously depends on companies in the second category - ones that you know have a need but aren't ready to buy yet. Because if you don't know anything about them they can't possibly be in your Future Pipeline.
So how important are those companies to your future? If you're in sales - or if you're the CEO - they're critical.
And that's where the source of the problem is - that poison that's killing your sales.
Because very few B2B vendors can access relevant information on companies where there isn't a current sales opportunity. Either they don't gather the information, they don't record it or if they do it's held in scattered places and is inaccessible. There are two key problems here;
1. People, not companies
In B2B sales you never sell to a company. You sell to people who work in a company.
Every single message you send or receive, by whatever communication channel - a telephone conversation, an email, a white paper downloaded from a web site, a LinkedIn InMail, a conversation at an event, a webinar - is read, watched or listened to by an individual, not a company.
And the sum total of information transmitted between you and a target company - in both directions - is made up of multiple communications between many people via many channels; digital, phone, email, etc..
The average B2B deal involves many people. You need to communicate with them, influence them, listen to them, educate them and build relationships with them. They include researchers, influencers, users, gatekeepers, business unit managers and decision makers.
A DemandGen report shows in the past year, 34% of B2B buyers have increased the number of team members involved in the buying process. Now there are an average of 7 people involved in a B2B buying decision, with some teams having up to 20 people.
You need to know who has said what to whom and when. Because if you don't you'll miss important information, you'll send the wrong collateral to the wrong people, you'll ask the same person the same question twice, you'll send contradictory messages and you'll generally be ill informed.
You won't communicate a consistent story, you'll lessen your chances of being seen as a competent, trusted advisor, your opportunity to educate the prospects will be diminished and your nurturing will be haphazard at best.
You need somewhere where you can see every relevant communication, every piece of feedback from all the relevant people in each prospect - no matter what the channel.
And I'm pretty certain you don't have that right now.
2. Missing, inaccurate and inaccessible data
"Hang on" you might be thinking right now, "isn't that what our CRM is for?"
The answer is - in theory, yes. In real life, no. Here's why;
a. Current sales opportunities versus future prospects
In real life, many B2B vendors only keep information on contacts and companies in their CRM where there are current sales opportunities. They use it as a management tool, a forecasting tool and a way to manage current deals.
Which is fine, but as we've discussed, that's only around 2% to 4% of their TAM. The other critical 96% of their TAM often isn't tracked in the CRM.
b. Data democracy
A lot of people can enter information into a CRM and that's very democratic. It's also very haphazard.
When you enter data into an ERP system there are standards, checks and balances to ensure data accuracy. The people who enter and check ERP information are highly trained in a rigorous approach to data entry - orders, customer information, stock receipts, stock levels, purchases, etc.
There are end of day and end of month balancing routines to make sure everything is entered correctly and multiple reports to help with this. Auditors and financial people check and double check everything. And even then there are still discrepancies.
When you enter data into a CRM there are very few data accuracy standards.
Most of the people who enter and check CRM data are sales people. And while sales people are a critical part of any company, they aren't exactly renowned for their stringent data entry procedures. If they bother to enter the data at all.
CRM data is inherently inaccurate because of the many diverse people who enter CRM data and because there is a significant lack of rigour and auditing.
c. Data transience
Prospect data decays quickly.
People aren't static. They change jobs, they change roles, they retire, they die.
Even if the data entry standards in CRMs were rigorous, which they aren't, more than 20% of contact data will have degraded within 12 months. Unless someone is actively monitoring this and updating the data it means CRM data is very often out of date.
d. Multiple sources
When you receive an order from a company you usually have all the necessary details at company level - the name, address, account number, credit limit, terms and so on are all held in one place.
Information on companies in your TAM and communications with the contacts in those companies are held in multiple places;
- CRMs (if you're lucky)
- Mailing lists
- Sales reps' email systems
- Marketing's email systems
- Event attendee lists
- Direct marketing systems
- Marketing automation systems
- Business development reps' laptops
- Various spreadsheets
e. Data ownership
A lot of data on prospects is held by sales people - in their email systems, on their laptops, in their diaries, in spreadsheets, in Word and via their LinkedIn accounts.
But the average tenure of a B2B sales rep is 1.4 years, while fewer than 5% of sales reps stay on board for more than 3 years.
A 2016 Sales Metrics Report from Sales Hacker surveyed 355 sales companies & found the average tenure of a B2B sales rep is 1.4 years, while less than 5% of sales reps stay on board for more than 3 years.
What happens to that prospect data when a sales rep leaves, is promoted or moves to another territory? Far too often it disappears with the sales rep.
f. Perceived unimportance
As we've discussed, your company's future sales and revenue depend on the companies in your TAM where there aren't any current sales opportunities yet.
So you'd think having accurate, comprehensive information on those companies, the people in those companies and your various communications with them would be important and would have a high priority.
It doesn't - at least, not with the people who understand data - your IT department.
Their hierarchy of data importance goes something like this;
- financial data first,
- transactional and customer data second,
- stock information third,
- possibly current opportunities fourth
- non-current prospects bringing up the rear - a long way behind.
What are the chances of IT de-emphasising their primary responsibility - to keep the lights on - and provide dedicated resources on an ongoing basis to help you collate critical but scattered prospect information held in multiple formats in multiple places?
I suspect the answer is nil and none.
When you're trying to convert a potential customer - a prospect - from a future possibility to a current opportunity and then into a sale you are dealing with real human beings.
They're busy people and they don't care about your data problems.
They do care when they get asked the same question two or three times by different people. They can get miffed when you spell their name wrong or send them several invitations to the same event or they get three prospecting calls from three different people within two weeks.
They get annoyed when you violate their "do not call" requests, they become irritated when you send them irrelevant collateral for solutions that don't apply to them.
They probably don't care if they give you critical or valuable information and you lose it - but you should care.
If your goal is to identify the right people in companies that have a need for your solution, to educate them about how you can help them, to nurture them and to build a trusted relationship so that they turn to you when they are ready to buy - then you need good, accurate, consistent information about them.
You need easily accessible data that allows you to send the right message to the right people at the right time and to record and use the feedback that you get.
Because real people don't follow a linear, predetermined buyer's journey that you can reproduce virtually and guide them along automatically.
The B2B buyer's journey is populated by many people. They all interact with each other as well as with you (hopefully). Different people in the same company have different ideas, perspectives, problems and needs. They move at different paces.
It's chaotic, it can be repetitive, it can stagnate for weeks or months and then accelerate in the blink on an eye.
If you want to be alongside them on that journey you need to understand them, communicate with them effectively and have all the right information at your fingertips. You need to know who said what to whom, what you've sent them, what they've said to you, what their interests, their problems, their needs, their beliefs and their constraints are.
And you need as much information as possible about each relevant individual as well as on the company as a whole.
It's hard enough to collect this information in the first place. It's unforgivable to collect it and then not be able to use it because it's scattered everywhere and is inaccessible.
And that's the poison that's killing your sales - insufficient and inaccessible prospect data.
This isn't meant to be a commercial article - it's meant to be informative and to alert you to a pervasive problem that affects the great majority of B2B sales organisations.
But it would be remiss of me to identify the problem in depth without mentioning that there are solutions - and the reason we understand the problem so well is that we help our clients overcome it.
The ideal solution is to collate all of the information you collect about prospects, no matter where it comes from, where and how it's stored, in whatever format, into one centralised, easy to access and easy to use Integrated Marketing Database.
There are different approaches to this.
Our approach is to offer this as a Data as a Service offering. We do it this way because, as I've explained above, it simply isn't a priority for most IT departments. Marketing and business development people need a way to access and use this information quickly without going into an IT backlog or waiting for weeks for a report.
Marketing departments want to be able to create narrowly targeted campaigns to the right people in minutes, not weeks. They want to view market insights on various issues based on feedback from people in different roles (e.g. CEO, CIO, etc.) and from different categories of companies.
Business development personnel need to see comprehensive information on individual prospects (people and companies) at a glance. If they contact someone they need to know who else has contacted them, what they said, what the prospect said, what collateral they have received and so on.
And when a prospect becomes a current sales opportunity, sales people need to know everything that's happened before they became involved.
That way they can build on all the activity that's taken place, they can benefit from the credibility and trust that's been generated in the pre-sales processes. And they can begin the sales process from a position of strength, building on the trust and credibility that's been generated rather than starting from scratch.
Of course, our OneIMD Integrated Marketing Database, offered via a Data as a Service, isn't the only solution. But it's the only one I'm personally aware of that's a proven antidote to the problem that's poisoning your sales.
This article originally appeared on LinkedIn here
John Bedwany is the CEO of the Database Dept., an Australian company that helps clients like Amazon Web Services, Adobe, Fujitsu, Google, HP, IBM, Microsoft and SAP throughout Asia and Australia to build trusted relationships with prospects and win new business.