It’s a dangerous time in the world of sales and marketing. There’s so much useful information, insights and data available to growth-oriented executives looking to find the elusive formula for consistent and fast growth.
What makes this time dangerous is the very reason that so much great information exists. More than $10 billion of venture and private equity investments have poured into technologies aimed at supporting growth (source: VBProfiles). Every one of these companies has a vested interest (literally!) in convincing you that they’ve found the formula... that it’s simple and oh by the way, all you need to do is buy (subscribe?) to our product...and sales growth is yours!
Here is some of what I’m talking about:
- Drift is telling the world that they should eliminate their forms (here’s my response to that).
- HubSpot proclaims that no one answers their phones and outbound is dead.
- SalesLoft teaches that outbound is still the answer.
- Numerous sales consultants rail against “social selling kool aid purveyors” and remind everybody that cold calling and prospecting is the key to success.
I could go on (and on). It’s enough to drive anyone crazy.*
Worse. It’s dangerous. I’ve had more conversations over the last couple of months with smart, experienced business executives who are buying these over-simplified formulas for growth. When I say “buying,” I don’t just mean buying products, I mean basing their business strategy on it.
Growth is complicated. There are no simple solutions. If you could figure out all that needed to be done by reading some blogs posts, ebooks and webinars, (no matter how good they may be) the growth formula would have been figured out many, many years ago.
Consider this: despite all of this great information and unprecedented expenditures into the sales & marketing technology and sales enablement, results are down! Research from CEB shows that for the $4,797 that businesses spend on “sales enablement” per rep, the impact on sales conversion is negative 12%!
How can this be? The answer is quite simple: there are no simple answers. There is no one size, one strategy fits all. What works for one company does not always work for another. If it did, strategy would neither be necessary or valued. The very definition of strategy (as defined by the “father of strategy” Michael Porter) is the ongoing process of making decisions and managing trade-offs to enable a business to deliver its value proposition successfully.
While there are virtually an infinite number of inputs that could be considered in developing and executing a strategy that leads to predictable, sustainable and scalable growth, here are five categories that are at the core of every go-to-market strategy.
The Type of Offering
I was recently having a conversation with a senior sales executive that I’ve become friends with. He had watched one of my videos on effective outreach programs and he was questioning my comment that an SDR should aim to provides some bits of value in a first conversation, en route to scheduling a call to qualify and fully establish fit.
He was questioning the time this would require of the SDR. He shared with me that his approach at his company (and this executive is very successful) is to spend as little time as possible and instead go directly to scheduling the fit meeting.
As we discussed the approach, what became clear was that we were describing two distinctly different types of offerings. His team sold a relatively low ACV product, while the video he watched was geared to services that sold at a solid six-figure ACV. His approach was right for his type of offering.
The type of offering you are selling will have a significant impact on the strategies you select and how you ultimately implement them.
The Value Segment of Your Target Customer
People define value in many different ways. One of the best ways to differentiate strategy and tactics is to hone in on the unique definition your target market has. Realize there are two distinct definitions of value:
- Fundamental value: focuses exclusively on the value within the product or service. Fundamental value buyers are experienced, sophisticated and fully capable of navigating the decision to the right solution. Fundamental value buyers are making a cost-based decision.
- Total Value: focus beyond just the product/service being offered to the total equation. Total value buyers are looking for insights during both the buying process and view those insights as a part of the “product.”
With fundamental value buyers, your goal should be to eliminate friction and empower the prospect to control their journey as much as possible. There’s no “creating value” in the sales process with them. It’s akin to buying an airline ticket from point a to point b. If you’re selling to fundamental value buyers, look to eliminate forms wherever possible and use chat instead (see Drift, I really am a fan).
Total value buyers are looking for more of an overall experience. You should be looking to orchestrate more of an overall journey and experience with these buyers. Find places where you can inject “teaching moments” and challenge their thinking.
No matter how good your product or content is, a misaligned model will not work.
The Average ACV (Annual Sales Volume)
About three months ago I got a call from someone who had been reading this blog for quite some time and had recently consumed a number of my videos. She had seen the light and believed in a comprehensive demand generation process and wanted to talk to us about our sales development programs, as well as getting help to design her new sales playbook.
The problem here was that her average ACV was $5,000 - $7,500/year. I told her that her economic model did not afford such a high touch model for sales. She needed to automate the sales process and turn her website into “her sales team.” Her (legitimate) concern was that her solution did require her market to approach a common problem from in a very different manner and she felt as though she needed salespeople to “teach” the new approach. My response to her was that while that made sense, the answer was that she needed to put in the hard work to translate that in a manner that could be delivered without a salesperson doing the heavy lifting.
Then just last week I got an inquiry from a company involved in a very high-value ACV (typically more than $200,000/year), and they wanted to talk to me about automating their sales process and reducing their need for salespeople. Now, this approach would have made sense if they were selling a known approach to a fundamental value buyer, the opposite was true.
This executive was by no means naive. He’s quite successful and very intelligent. The problem was that he had just heard about the economic impact of turning the web into a high powered sales asset. The problem here was that the strategy that was shared applied to a different scenario.
Your ACV is going to highly influence what you can do and how your customers and prospects will respond. Be sure you consider it in your strategy.
Maturity of the Market
If you’re a fan of (and have read) Geoffrey Moore’s Crossing The Chasm, you can skip this section...you already know what I’m talking about.
Yesterday I was talking with a friend who sells a solution for email marketers. He was working on a new marketing and sales campaign and asked me to look over some of the content he created. The focus of his message was on selling the problem (what I refer to as making sale one).
That would be the right focus for a less mature market/problem. We discussed the profile of his target customer and we agreed that his customer already knows they have an email problem. He doesn’t need to teach the problem. Instead, he needs to focus on teaching his market how to solve the problem (what I call sale two).
An earlier stage market or a less defined problem would behave very differently, as would an even more mature market/product. The point here is that the nature of the market you are trying to attract is a crucial component of the growth formula.
Experience/Sophistication of the Target Customer
When I started Lift in 2004, I launched it with the publication of the first article in a series on Avoiding the Commoditization Trap. When I shared my plans with some marketing advisors I was friendly with, they cautioned me against focusing on the concept of commoditization. They were worried that the word wasn’t known well enough. I responded that anyone who didn’t know what commoditization was would not be a good fit for my business at the time.
This is an example of how the consideration of the experience and sophistication of your personas must play into your go-to-market strategy and tactics.
There are certainly many more factors that should be considered when designing your strategy and implementing your growth efforts. And of course, you don’t want to look at these factors independently.
For example, the playbook I would design and implement for a company that was selling high priced, disruptive services to sophisticated, fundamental value customers in a mature market would be very, very different than a mid-value product to early adopters looking for total value.
Blogs, ebook, white papers, viewpoint documents, etc. are great resources. They give us insights into experiences that just a decade ago we could have only dreamed of getting. But, use them for what they are - points of data. Be sure you apply them to your unique situation to drive the growth results you desire.
*For the record: I am a fan of all the examples I shared above (even the consultants) and use (at least) sprinkles of their approach in what we do for ourselves and our clients.