New York is actually a great city to wander in—it’s pretty safe, pedestrian friendly, and laced with public parks and waterfronts. But when Lifehacker sent a team to Tokyo to find the local hacks, damn was I jealous of the city planning. There are lots of touches that make Tokyo easy to navigate and pleasant to wander.
Well it looks like NYC is finally going to get congestion pricing, a technique used successfully in a number of cities around the world to reduce the number of cars on the road and increase the investment in mass transit.
The concept is simple. Tax cars coming into the center of a city and use those tax revenues to invest in other ways of moving people in and out of the city.
I have been a supporter of this idea going back to the Bloomberg era in NYC when it looked like we were going to get congestion pricing and then it fell apart due to political opposition.
I wrote about congestion pricing late last year when a report came out from the Governor’s committee on metro area transportation which recommended congestion pricing and increased investment in the MTA.
I think this is the right policy. We need to create financial disincentives to drive in NYC (with the proper exemptions like people with disabilities) and we need to invest more in mass transit.
This will be good for the tech sector in NYC, where employees largely use mass transit to get around. Julie Samuels, Exec Director of Tech:NYC, explains why in more detail in this op-ed.
I do have concerns about giving billions of new tax revenues to the MTA which has not been great at using the billions we have already given them to deliver better mass transit. I mention those concerns in my post late last year.
But we should not let perfect be the enemy of the good. NYC needs congestion pricing and we need it now. It will reduce traffic in lower and midtown manhattan and it will provide the resources we need to modernize and improve our mass transit options.
If we could couple congestion pricing with structural reforms of the MTA, then we would be really cooking with gas.
When it comes to predicting climate change, traders in financial markets have been making profitable bets.
A new study from Columbia University calculated almost 20 years of trading in weather futures contracts on the Chicago Mercantile Exchange (CME), where investors effectively bet on the number of hotter- or colder-than-average days across eight US cities.
"The market has been accurately pricing in climate change, largely in line with global climate models," they wrote. "This began occurring at least since the early 2000s when the weather futures markets were formed."
The futures contracts are derived from measurements called "degree days," which can be calculated over periods of time. That can then be used for analysis like estimating the amount of energy needed for heating and air conditioning.
The contracts, at about $20 each degree day, are used to offset risk within markets or by speculators. For example, a citrus company may purchase a contract to mitigate the risk of a winter freeze, the study said.
The report outlined an example of a winning trade:
For context, if a trader buys one July "cooling degree day" contract for 300 CDDs, the cost would be $6,000.
"If the realized cumulative CDD for the month of July settled at 330 cooling degree days, the clearance value would be $6,600, and the trader would reap a profit of $600 ($20 times the increase of 30 degree days)."
The study, led by Wolfram Schlenker — from Columbia's National Bureau of Economic Research — and Charles Taylor — a PhD student in Sustainable Development, controlled for short-term weather forecasting and periods of thin liquidity.
The impact of the findings have implications for finance more broadly. For the corporate sector, the stakes are high:
"Recent studies have highlighted how the valuations of companies and entire industries are sensitive to weather fluctuations. Efficient and profit-maximizing behavior requires an accurate assessment of predicted warming. Weather markets can provide companies with pertinent information on future weather and climate trends, as well as a hedge against potential lost profit."
As a result, traders — whose entire role depends on better understanding market forces — have aligned their pricing of buying or selling futures alongside academic research on climate change.
The study also suggests that while there are plenty of climate-change deniers around, they don't seem to be putting their money where their mouth is.
"Anyone doubting the observed warming trend can make a significant profit by betting against it in weather markets," the study said. "However, the observed annual trend in futures prices shows that the supposedly-efficient financial markets agree that the climate is warming."
The researchers continued: "Climate models have been very accurate in predicting the average warming trend that’s been observed across the US. When money is on the line, it is hard to find parties willing to bet against the scientific consensus."
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NOW WATCH: A mathematician gave us the easiest explanation of pi and why it's so important
Digitalization of the economy is a hot topic these days. Technological change creates new jobs and new opportunities for business. It’s also changing the nature of work and disrupting many industries.
Central banking is no exception.
Digitalization raises a lot of important questions. Here is what is top of mind for the Bank of Canada and for other central banks around the world.
Technological change is not new. Whether it was the steam engine or the World Wide Web, there’s no question that past technological change has helped raise overall living standards around the globe. Since Confederation, Canada’s real income per capita has increased by more than 20 times because we’ve become more productive.
While the world has gotten wealthier, the share of income going to workers has declined over the past few decades in many advanced economies. Technological change has spurred structural shifts in labour markets, so workers and firms are now competing in a global marketplace. That likely explains some of the weak wage growth we’ve seen in recent years.
Understanding this is essential for monetary policy because it appears to be changing the relationship between unemployment and inflation.
Today’s innovations — artificial intelligence, machine learning and many others — will benefit scores of workers because they will use the technology to do their jobs better. The Bank of Canada is certainly aiming to harness new technologies in our own operations. But adapting to this changing world will also be challenging for many. And we may see an erosion of jobs in more groups than in the past, such as lawyers and investment advisers. That’s why continuous investment in skills is more important than ever.
Central banks care about these changes in the distribution of income because they can change how monetary policy works through the economy. Less wealthy households tend to spend more of their income. So, changes in interest rates may matter more for them. Highly indebted households are also more sensitive to rate changes. Understanding these dynamics is a research priority for the bank.
Much is being made of the rise of “superstar firms” in the high-tech industry, and their impact on competition. We’ve seen this in the past, when highly innovative firms benefitted from significant economies of scale — cost advantages from being big — and put downward pressure on prices, at least initially.
A new twist to the story of market dominance is user data. Access to and control over user data can create barriers to entry for other players, providing leverage to stifle competition and, potentially, control prices.
Why is this on our radar? As an inflation-targeting central bank, we care about how this could impact inflation dynamics.
We also care about the impact on the economy’s potential to grow without causing inflation, or its speed limit. The innovative ideas that are coming to market have a real chance of boosting sustainable growth. The full benefits will only be felt if newly created firms can contest the bigger players and fuel a vibrant, competitive economy. As well, existing firms need to invest in new technologies to remain competitive in global markets. Higher economic potential means more wealth to share.
At the Bank of Canada, we often say we are “data dependent.” It’s not just a nerdy slogan. Good economic data are central to our ability to set the policy interest rate to keep inflation low, stable and predictable.
Yet the economy is getting harder for everyone to gauge as it becomes increasingly digital. Major indicators like inflation, business investment and employment are not fully capturing the digital shift.
Think about online shopping. The Amazon effect has disrupted the retail business and affected pricing behaviour. How can we ensure that measures of inflation incorporate prices from online stores such as Amazon and others? How should we tally up business investment when firms are hiring cloud services instead of installing servers? What is the economic value of data? And how should we assess the state of the labour market in a gig economy?
Statistics Canada is working hard on these questions.
Meanwhile, the Bank of Canada is tapping into the big data made available by digitalization. We’re exploring how to apply artificial intelligence, machine learning and text analytics to predict sectoral economic activity, house prices and turning points in the business cycle, to name a few.
No one has a crystal ball, but it’s our priority to understand and adapt to digitalization so we can do our part to support the economic and financial well-being of Canadians.
Carolyn A. Wilkins is the Senior Deputy Governor of the Bank of Canada.
Even as WarnerMedia, Disney+, and Apple prepare to launch paid streaming services, free ad-supported streaming TV services, or FASTS, are taking off as people look for no-commitment viewing options and subscription fatigue sets in. Almost half of US consumers think there's too much choice in subscription services, according to an annual report by Deloitte.
These companies, like Pluto TV, Tubi, XumoTV, and the Roku channel, have grown in monthly average users over the past year, according to the companies' own figures. Video supply-side platform Beachfront reported a 1,640% increase in ad requests to nearly 30 billion in 2018 from 1.7 billion in 2017, mostly coming to the free streamers.
These free streaming options are popular because they have lower ad loads than traditional TV and offer familiar content that people can play in the background while they're doing other things, said TVREV cofounder and lead analyst Alan Wolk, who wasn't involved with the report.
"They are surprisingly popular," Wolk told Business Insider. "It's a bunch of of 80's movies and reruns that Netflix didn't want to buy."
These streaming services are seen as the likely target for acquisition by a variety of companies, said Wolk, citing recent conversations with executives at TV networks, agencies, and technology providers for a report he published on the OTT industry.
These services look increasingly attractive to companies that recognize not all consumers are willing to pay for multiple television services, and traditional MVPDs and cable and broadcast companies face pressure to innovate through OTT services to keep up with changing viewing habits.
There's already been one big acquisition in this space, with Viacom acquiring Pluto TV for $340 million in January.
People are hitting their limit for paid TV and often just want someone else to make the viewing decision for them, Wade Davis, chief financial officer of Viacom, told Business Insider in January. "We think it's more than a billion-dollar business," he said.
Device makers like Vizio (which already has a streaming service powered by Pluto TV) or Samsung could look to acquire a free ad-supported service, Wolk said. That would allow either company to build a "walled garden" where they could sell their own ads and promote their streaming services as the Roku Channel and Amazon Freedive do.
Another potential buyer is broadcaster Sinclair, Wolk said. Sinclair which launched a free, ad-supported streaming service in January called STIRR, offering local news and other content to cord cutters. There are unconfirmed reports that Sinclair is looking to buy Xumo, according to Variety.
Other possible acquirers are MVPDs like Comcast, whose core business is increasingly becoming broadband connectivity into the home. Content programming is expensive, and as consumers continue to cut the cord it might be cheaper for distributors with broadband businesses to forgo linear TV offerings altogether. Instead, they could offer service through one of the free streamers, said Wolk.
Comcast has started to explore just that. In March, it announced a new $5-a-month aggregation service for its broadband customers, Flex, that lets them watch other streaming services they pay for, like Netflix or Amazon Prime, and 10,000 free programs, including live Tubi and Pluto TV.
Cooperation set up and tune up are often overlooked by businesses in their grand search for the right outsourcing partner. Surely, creating a detailed list of requirements for your project is massively important to receive accurate price quotes from vendors and establish the scope of work.
However, by overlooking the different options for collaboration with your new team of software developers carries certain risks, time- and budget-wise. According to a recent report by Quality House, nearly 50% of outsourcing initiatives fail due to unmet expectations and miscommunication. 39% of responders named “hidden costs” a major problem and 37% claimed that insufficient planning was the reason for failure.
Both of these issues can be mitigated by devising a contract with a new partner that covers several aspects of your relationship with the software outsourcing company, including the following:
While the scope of the project and methodologies may be relatively easy to hammer out, the cooperation and pricing model may not be so easy to determine.
To shed some light on your options, let’s go through each of the two predominant models in detail – dedicated team vs. fixed-price model. This should help you make a more informed decision.
Dedicated team (also known as extended team model) is exactly as the term indicates. When you hire a software company for custom software development, you are assigned with a team of programmers who are experts in your niche and will work exclusively on your project, from start to finish.
As a client, you will usually interact most with the team leader/project manager at the vendor’s end who oversees all aspects of product development and who provides regular updates and iterations for review and approval. Alternatively, the dedicated team you hire and “join forces” with your in-house staff and work as a united front on a large scale project.
To hire software developer expertise, as a customer you sit down with the outsourcing company and determine how many employees will be required for your project, what skill sets you need and which programming technologies you expect your hires to be familiar with. The outsourcing provider is expected to match you with the right team and develop the work process for this unit according to your list of project requirements. The latter will require careful ongoing coordination as together will have to figure out the optimal workload for the project and adjust it if your needs change.
Usually, the dedicated team model assumes monthly payments based on the teams size, along with the fixed service fees.
Usually the dedicated team model is suitable for medium-to-large scale projects and an extended software development lifecycle. When you will be using a team on a long-term basis, and you want that team to work exclusively on your project, this will be the best cooperation model.
This model allows for the flexibility that your dedicated team may need, as a larger project can result in several unknowns and frequent changes in the course of design and development. While the total cost is not known in the beginning, billing can be based on a set number of hours per week or month, and this allows predictable budgeting.
In general, a dedicated team is not suitable for a short-term project as you will spend quite a lot of time selecting and onboarding a new team, to let them go soon enough.
It may also not be a suitable choice if your organization does not have an in-house “expert” who will be responsible for hiring and managing the offshore development team. Unless regular iterations and updates can be received and fully understood, this model can be quite inefficient.
Likewise, having dedicated developers can be inefficient if your own IT staff is already consumed with its own projects and lacks the time to participate in management of the development process.
For when your business needs to hire talent for a software development project with a clearly defined outcome (e.g., an app with a fixed number of user stories) or one with an inflexible budget, the fixed price model may be a better choice.
This cooperation model assumes the following:
In general, the client is not involved in significant management or communication during the development process, and exercises little control over it.
If an organization has one or even a series of clearly thought out software projects that range from simple to moderate levels of complexity, with clear specifications, and a defined budget and completion time frame, then this model will be the right one.
It is also suitable when the client has neither the expertise nor the desire to be involved in the development process. The work is fully managed by a project leader selected by the software development outsourcing firm.
If this option is chosen, it will be important, however, to ensure that the contract provides for follow-up support and work, if there are issues (e.g., bugs) with the delivered product. It would also be wise to include in the contract a penalty should the product not be delivered by the agreed-upon deadline.
Because there is a fixed price, there is a high level of motivation on the part of the development team to complete the project according to the predetermined timeline, if not before.
Obviously, if you have a long-term complex development project, the fixed price option is not for you.
If you envision that there may be multiple changes and modifications as development occurs, and that you want to be involved in the iterative process as it moves forward, then the model is not suitable. You will find yourself re-negotiating many times over, and this is a time waste, as well as a blowout of your budget.
It is obvious that each of these two models has advantages and disadvantages. You must weigh your options, of course, against the type of project(s) you are seeking. For a general summation, though, here are the key takeaways to consider:
Dedicated Team: Here you have lots of flexibility in terms of modifying the project details as iteration move along and you have the chance to review them and analyze what may need to be changed or added. You also have involvement throughout the entire development process. Costs, though will fluctuate, and you do run the risk of blowing out your budget.
Fixed Price: Cost and scope are pre-determined and fixed, based upon the specific details that you provide to the outsourcer. There is then no flexibility for modifications without re-negotiating the initial contract. You will have no involvement in the development process which usually occurs via waterfall methodology. The risk here is product quality, although with contract terms that provide for fixing issues after delivery, this is somewhat mitigated.
This article originally appeared here.
Sales will always be a persuasion game, but the biggest obstacles to success are actually cognitive biases rooted deep in the human brain.
The brain has evolved in strange ways. It has developed mental shortcuts around rational thought: like factory-settings that help us avoid change by ignoring, rejecting, or modifying what we hear.
From an evolutionary standpoint, this makes sense: craving routine made life safer and easier. But in modern times, these adaptations can cloud judgment and decision, preventing meaningful progress from being made.
Salespeople confront these 13 cognitive biases on a daily basis:
This blog will describe the common biases professional sellers face and how to use logic, examples, and stories to break down 250,000 years of evolution to win more deals.
In nature, evolution and advancement are slow processes. Large decisions, in our ancient past, were usually matters of life or death.
As a consequence, we have all inherited a reluctance to embrace new habits, new information, and new risks. The saying, “if it ain’t broke, don’t fix it,” wasn’t just a piece of advice, it was a way to ensure your community’s survival.
Many of these evolutionary holdovers hinder the selling process. These are the most common cognitive biases that trouble sales professionals.
Each bias is followed by a brief description on how they’ll present themselves in a sales context.
Attentional bias is the tendency for people’s perceptions and actions to be affected by recurring thoughts they’ve had in similar situations.
During the sales process, your prospect may be predisposed to hesitation and rejection because of previous sales interactions they’ve had. Overcoming the prospect’s immediate desire to raise objections is a common problem facing sales representatives.
The ambiguity effect is the tendency to avoid scenarios or choices where a positive outcome is uncertain.
Especially during the first point of contact, sales professionals have to convey the reliability and reputation of both their products and themselves. Otherwise, the uncertainty alone will drive the prospect away from making a decision.
Parkinson’s Law of Triviality states that members of an organization tend to give undue attention or importance to easily understood issues instead of more important or impactful ones.
Especially in a complex sale, or when selling subscriptions, buyers may not immediately realize the long-term benefits of your product. For example, focusing on upfront costs rather than long term cost-saving measures.
Confirmation bias is the embracing and amplifying of information that supports one’s existing beliefs over new ones.
For example, hearing that you’ve been acting unwisely or spending inefficiently is difficult for anyone to process. Many prospects will choose to defend their past decisions, insisting that the improvements you describe aren’t possible or have been exaggerated.
The status quo bias is the desire to keep things the same.
Related to Confirmation Bias, this line of thinking assume that if nothing is glaringly wrong, it’s preferable to keep everything constant. More sales deals are lost to “no action at all” than to competitor products. The status quo bias is probably the most common sales inhibitor.
Selection bias is defined by noticing more of something once it’s directly brought to our attention.
This works both for and against sales professionals. When you point out a previously unseen flaw with their current system, perhaps it will influence buying behavior. However, drawing attention to those shortcomings can also prime the prospect to see more of the same in your own product or solution.
Reactance is the urge to do the opposite of what you’re told in order to maintain a sense of independence.
A frequent reaction to anyone perceived as a “pushy” salesperson. This cognitive bias causes most instant brush-offs.
Projection bias is the inaccurate prediction that our thoughts, preferences, and values will remain constant.
Hesitant prospects assume their targets, company cultures, and priorities will remain the same forever. Sales representatives have to make sure buyers know that their ideas will shift as trends progress.
The mere exposure effect is the forming of strong connections to things merely because of a familiarity with them.
Unless the newer option is an exact replica of what a prospect is currently using, they’ll resist a change. This bias can also be used to the salesperson’s advantage if the prospect is familiar with them before conversations begin.
Loss aversion refers to the tendency to fear losses more than we enjoy equivalent gains.
The pain of losing $5 is greater than the joy of finding $5. Even if purchasing your product will lead to noticeable advantages, if the process of changing is too painful, buyers will tend towards inaction.
Functional fixedness is the inability to see objects as useful other than in the most obvious way.
Additional benefits or long term advantages to purchases aren’t always apparent. Especially relevant during a product demo, sales reps must show where extra value can be added.
The base rate fallacy is when we ignore broadly accepted information and favor information specific to a specialized case.
Nearsighted buyers will only want to talk about their processes and how those will be immediately impacted. They may be impatient to hear about the general benefits of your product and instead focus on the short-term impact.
The bandwagon effect is the tendency to behave in the same manner as the majority.
This bias works both ways for sales professionals. Social proofing and customer testimonials can influence similar buyers toward your product, but more popular brand names will need to be proven inferior.
Even though our brains are thoroughly schooled in ancient practices, we’re living in an innovative, fast-paced economy. Buyers who don’t recognize new trends may fall into irrelevance before any “fad” passes over.
To break the biases, sales professionals can use multiple tools and tactics. Each of the following persuasion techniques can be used to ease worries and show how the path forward will be beneficial and seamless.
Change and uncertainty intimidate buyers away from moving forward in the sales process. One way to overcome these obstacles is to show them how you’ve helped other prospects realize success.
Testimonials are easily displayed on websites and can be quickly dropped into email communications. These should be short statements that indicate positive results, individual buyer satisfaction, and a track record of success. Recognizable brands and high-ranking spokespeople go farther in creating prospect-seller trust.
Customer stories tend to go more in depth. These pieces of sales enablement content seek to create an empathetic bond between your prospect, and a satisfied customer who found themselves in a similar position.
The structure of every good customer story follows a formulaic structure.
Customer stories are best presented as blog or video content and can be shared with prospects post-call or during email exchanges.
Many biases use experiences and emotional states to inform decisions, but these obstacles can be easily bypassed by presenting logical and numerical facts.
Case studies take the customer story method one step further. By polling current successful clients, you can get a rough estimate of how your product has improved productivity, operations, or communication.
Again, it’s helpful to assign company names to these results, but if enough information is collected in bulk, the sample size will prove persuasive.
Another form of persuasive sales enablement content is the industry survey. The respondents don’t need to be current customers, but theoretically, they should be similar to your ideal customer base. The purpose of industry surveys is to prove that your product is solving an actual need.
This may be necessary when confronting the Base Rate Fallacy, Selection Bias, and the Law of Triviality.
Unfamiliarity with the salesperson – as an individual – will influence buyers negatively. Successful sales representatives know how to display empathy and build trust with their prospects through active listening techniques and clear communication.
When the buyers and sellers become better acquainted, Attentional and Ambiguity Biases can be mitigated through a relaxed setting and candid exchanges. This eventually helps, the mere exposure effect to work in your favor.
Tone and presentation skills go a long way toward establishing good first impressions, but personal accountability counts for even more.
Let them know you’ll be there through the buying process and even beyond. Having an advocate to address questions and guide any transitions will be very persuasive for certain buyer personas.
Change is the great human fear, and possibly the root cause of all cognitive biases.
In business as well as life, we constantly run equations comparing the risks and rewards of doing things differently. As a sales professional, you must make the adoption of your product or service an enjoyable and simple process.
For one, it’s always a good idea (once the ball has begun rolling) to outline what the transition process will look like. Candid sales representatives will create documents specifically for each potential client that say what – and most importantly, when – each phase of implementation will be complete. When prospects have an idea of what the future holds, it seems less scary.
Free trials and in-depth product demos are also a useful way to show your prospects what life will look like post-purchase, but additional measures, such as a service level agreement, will give needed weight to any promises.
Familiarity with recognized cognitive biases is the first, and most important step, in combating potentially negative effects on sales. Luckily, most biases fall into broad sweeping categories related to avoiding change, confronting the unknown, and ignoring new information.
Using the resources described here, sales reps should be able to keep prospects clear-headed and ready to consider an impactful pitch.
The post Sales Persuasion: Recognizing and Beating Cognitive Biases appeared first on Sales Hacker.
An omnichannel approach to customer support requires a dedicated strategy—will you designate agents to focus on single channels or will they multitask? Are there channels that you want to guide customers towards? How do you properly staff agents on these channels throughout day, month, or year to keep up with customer requests?
Your strategies will need to be measured for effectiveness. When an omnichannel approach is paired with the right analytics tool, you’ll have all the metrics, data, and insights needed to do just that:
Even with multiple channels to choose from, customers will still be keen to choose the channel that works best for them. Many prefer the convenience of live chat while some will want to air their grievances through social media, and there are still others who prefer to reach out via telephone.
By paying attention to the ticket volume by each channel, you can measure the channels that customers are frequently using. These conversations can be broken down by channel and day of the week to clue you into trends. Using what you learn, you could properly staff your channels to keep up with customer demand through a given day or season.
Customers can be guided towards channels with lower volumes to take the weight off of others, or a greater emphasis can be placed on the channels that are performing well.
Measuring each channel will reveal a lot about your customers: they might be inclined to figure things out themselves, or they might be quick to engage with your agents. The activity and volumes of each channel will be affected by changes in your products or services, so play close attention to how channel interactions change as your business does too.
Another indicator of channel effectiveness (and agent effectiveness) is taking a look at customer satisfaction (CSAT) by channel. CSAT will shed light on how well your support is tailored for the channel – more satisfied customers generally means a more effective support channel.
If administrators want to set specific thresholds or goals for their support teams, CSAT is a good benchmark statistic to use for omnichannel. The omnichannel approach is all about providing customers with support options they want to use, so they ideally should be satisfied with the channel of their choosing.
Offering multiple channels can reduce ticket backlogs where customers often be funnel into, especially if your customer base has a preference (like live chat or calling over the phone). Ballooning ticket backlogs can be frustrating for support team leaders and can hinder agent effectiveness when they feel like there’s too much on their plate to handle.
A reduction in wait times can indicate that your omnichannel support is working. Invest in areas where quick resolutions often occur, like self-service or live chat. These can shrink ticket backlogs to a manageable level and reduce overall wait times.
Also, note if the wait times are higher in some channels—it may indicate that the channel needs further optimization via staffing, UX improvements, or agent effectiveness.
A ticket volume spike is often tied to an event, like a service outage or a popular offering for customers (like a big sale). It’s important to measure spikes with your omnichannel strategy in mind—it can provide lots of context on trends like customer channel preferences, volumes by time of day, what customers frequently ask about, and so on.
Having insight around ticket volume spikes will educate support teams and help formulate effective strategies for when they encounter them. That may include staffing the proper channels during anticipated spikes as a proactive measure or setting up a process to funnel customers to self-service solutions for frequently asked questions. Knowing what to expect will help get your agents through those difficult periods.
Your omnichannel support should include a self-service component where customers utilize your help articles. Ticket deflection can be measured by dividing the total number of users of you help center by the total number of submitted tickets. This can be tied to an actualized dollar value of how much money is saved from each deflected ticket.
You can also measure the resolutions that come out of article recommendations made by an AI assistant. They also deflect easily-resolved tickets so that agents can focus on more complex requests from your customers.
In Silicon Valley, investors don’t expect their portfolio companies to be profitable. “Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies,” a bible for founders, instead calls for heavy spending on growth to scale in an Amazon -like fashion.
As for Wall Street, it’s shown an affinity for stock in Jeff Bezos’ business, despite the many years it spent navigating a path to profitability, as well as other money-losing endeavors. Why? Because it too is far less concerned with profitability than market opportunity.
Lyft, a ride-hailing company expected to go public this week, is not profitable. It posted losses of $911 million in 2018, a statistic that will make it the biggest loser amongst U.S. startups to have gone public, according to data collected by The Wall Street Journal. On the other hand, Lyft’s $2.2 billion in 2018 revenue places it atop the list of largest annual revenues for a pre-IPO business, trailing behind only Facebook and Google in that category.
Wall Street, in short, is betting on Lyft’s revenue growth, assuming it will narrow its loses and reach profitability… eventually.
Lyft, losses notwithstanding, is growing rapidly and Wall Street is paying attention. On the second day of its road show, reports emerged that its IPO was already oversubscribed. As a result, Lyft is said to have upped the cost of its stock, with new plans to raise more than $2 billion at a valuation upwards of $25 billion. That represents a revenue multiple of more than 11x, a step up multiple of more than 1.6x from its most recent private valuation of $15.1 billion and, of course, Wall Street’s insatiable desire for unicorns, profitable or not.
New data from PitchBook exploring the performance of billion-dollar-plus VC exits confirms Wall Street’s leniency toward unprofitable tech companies. Sixty-four percent of the 100+ companies valued at more than $1 billion to complete a VC-backed IPO since 2010 were unprofitable, and in 2018, money-losing startups actually fared better on the stock exchange than money-earning businesses. Moreover, U.S. tech companies that had raised more than $20 million traded up nearly 25 percent of 2018, while the S&P 500 technology sector posted flat returns.
Wall Street is still adapting to the rapid growth of the tech industry; public markets investors, therefore, are willing to deal with negative to minimal cash flows for, well, a very long time.
There’s no doubt Lyft and its much larger competitor, Uber, will go public at monstrous valuations. The two IPOs, set to create a whole bunch of millionaires and return a number of venture capital funds, will provide Silicon Valley a lesson in Wall Street’s tolerance for outsized exits.
Much like a seed-stage investor must bet on a founder’s vision, Wall Street, given a choice of several unprofitable businesses, has to bet on potential market value. Fortunately, this strategy can work quite well. Take Floodgate, for example. The seed fund invested a small amount of capital in Lyft when it was still a quirky idea for ridesharing called Zimride. Now, it boasts shares worth more than $100 million. I’m sure early shareholders in Amazon — which went public as a money-losing company in 1997 — are pretty happy, too.
Ultimately, Wall Street’s appetite for unicorns like Lyft is a result of the shortage of VC-backed IPOs. In 2006, it was the norm for a company to make its stock market debut at 7.9 years old, per PitchBook. In 2018, companies waited until the ripe age of 10.9 years, causing a significant slowdown in big liquidity events and stock sales.
Fund sizes, however, have grown larger and the proliferation of unicorns continues at unforeseen rates. That may mean, eventually, an influx of publicly shared unicorn stock. If that’s the case, might Wall Street start asking more of these startups? At the very least, public market investors, please don’t be swayed by WeWork‘s eventual stock offering and its “community adjusted EBITDA.” Silicon Valley’s pixie dust can’t be that potent.
Why Your Marketing Must Be Led By Strategy First written by John Jantsch read more at Duct Tape Marketing
Marketing Podcast with John Jantsch on Strategy First Marketing
A lot of people use the term “marketing strategy,” when what they’re really talking about is marketing tactics. Strategy is not just a Facebook post or a paid search campaign or blog posts. Those are the tactics you use to execute your strategy. But if you don’t have a larger strategy to guide you, then you’re just going to be guessing about what tactics you should be using as part of your marketing efforts.
Today, we’re going to look at what you need to do to put strategy first so that you can get intentional about your marketing approach.
Chance are that, today, you’re defining your ideal client too broadly. If you’re a tax preparer, your ideal customer is not just anyone who wants to do their taxes.
Sure, some of them are, but what makes a customer ideal for your specific type of work? If you charge a lot more than the national tax preparer, who opens up shop on the corner and charges $49.00 per return, then the people who would want to go with this cheap and easy option are not your ideal client. But maybe you have expertise that’s best suited to people with a specific tax need—like a high net worth individual who has lots of investments and philanthropic write-offs. Plus, they’re the ones who’d be willing to spend more to get the job done correctly.
Don’t guess about who your ideal client is. You are already working with some great people, so turn to your existing client base. Who are your most profitable clients? Who refers the most business to? What are the common characteristics that you find in those clients?
This doesn’t mean that this ideal client will ultimately be the only type of person you’re going to serve. But it does mean that all of your marketing messaging should be demonstrating that this is the type of person you can get the greatest results for.
The first step to finding your core message is asking, “What problem does my brand solve? And what promise can my brand make to solve that problem?”
Let’s say you own a lawn care business. Your potential customers will automatically operate under the assumption that you know how to mow a lawn. But that doesn’t really address the problem the potential customer has.
For most homeowners, their biggest problem associated with a home care service is about something beyond the basic service the business provides. Homeowners hate having to wait around for the provider to arrive during their service window (and how often are those people actually on time?). When they hire someone to handle their landscaping, the team leaves behind a big mess of hedge trimmings and lawn clippings. Or it’s difficult to get payment to them because they only accept checks. These are the real problems your clients have.
So your core message is not, “We know how to care for your lawn”—of course you do! Instead, it’s “We show up on time, every time.” Or, “We leave your yard looking cleaner and better than when we arrived.”
This core message should be featured above the fold on the homepage of your website. It’s a key element of strategy because it is how you differentiate your business in a way that your customers care about that goes beyond your products or services.
Customers don’t need a description of your product or service right up front. Sure, once they get further along in their journey and begin considering their purchasing options, they’ll want to know the nitty gritty details. But for now, they want to know how you’re there for them.
Back to the lawn care example: If the prospect is looking to create a better lawn, they may not have decided they need someone to do that for them. They may initially just be looking for advice and expertise, thinking this is a task they could tackle on their own.
The lawn care business, then, wants to establish themselves as that local source of expert advice. This is where hub pages come in. The lawn care business will publish “The Guide to the Perfect Lawn”—a hub page that consolidates all of their content around lawn care into one place.
This hub page will rank in Google results for someone looking for the perfect lawn in your local area. Now, you become their go-to source for guidance on lawn care. You develop a relationship with them, and they come to trust you. Some of these people will, of course, still opt to go it alone and handle their lawn themselves. But others will say, “It looks like these lawn care people have it all figured out. Why don’t I just hire them to do it?”
The hub pages are a way to draw people in who might not even be looking to make a purchase or become a customer. But then, your expertise is what builds trust and eventually convinces them that they do need the solution you offer.
Customers have buying questions and objectives, and these will change along the various stages of their journey with your business. It’s your job to guide customers through the marketing hourglass, taking them through the logical steps of getting to know, like, trust, try, buy, repeat, and refer your business.
To make sure you’re providing customers with what they need at each stage, start by asking questions. In the know phase, the essential question for a business owner to answer is, “If someone didn’t know about us, where would they go to find a business like ours?” For most businesses, the primary answer to that question is Google. But in the lawn care example, you also might have prospects that ask a neighbor for a referral, or see your truck around town or your signs on people’s lawns.
Once you’ve done that for the know phase, you move on to the other six stages of the hourglass. Once they find your website, what do they see when they get there? Do they see that other people know, like, and trust you?
How does someone try what your business is offering? If you’re the lawn care business, that might be getting a quote. But how exactly do they go about getting that quote? Is it a form on your website, or do they need to call or email you? How quickly do you respond? Is the response personalized, or does it feel like a boilerplate offer? These elements all become a part of the customer’s experience and journey with your business.
The buy, repeat, and refer stages are more internal. How do you onboard a new customer? What are your team’s checks to ensure that customers are getting the results that they want from your business? What makes a great experience that will bring them back for another purchase or encourage them to refer a friend? This is where you want to get into the buyer’s head to determine what they’ll expect out of you.
Once you understand what a customer wants from you at each stage in the journey, you need to make sure that your online assets address those needs.
You’ve now identified the ideal customer, you know the core message and promise, you know how content becomes the voice of strategy, and you know how your customers want to buy. Now, you can fill in the gaps to meet customers wherever they are. That is the heart of marketing strategy.
Tactics are what allow us to fill in those gaps to meet customers where they are. If your ideal customer finds businesses by searching the web, you need to create a hub page so you rank in those SERPs. You need testimonials on your website to build trust. You need to be on social platforms, so that you have information in lots of places that proves your legitimacy as a business. You need reviews on social media and review platforms so that others are vouching for you. These are the tactics that align with the larger strategy.
We have an engagement called Strategy First, where we do this entire process for our clients. As a part of this engagement we interview your existing customers and analyze your competitors. We build ideal client personas and establish a core message and promise that will speak to them. We map out your hub page and determine how to make content the voice of your strategy. And we go through the marketing hourglass exercise and identify the gaps in your current marketing approach. This gives you a firm foundation on which to build your tactics and move your marketing forward based on solid strategy.
Want to learn more? Schedule a consultation with us so we can talk about how to do this for your business.
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Real trust can only grow when people know how the organization’s performance will be judged. In my experience, people align themselves around whatever is being measured like particles of iron around a magnet. That’s why the scorecard is such a critical part of sharpening the focus.
When measuring success, distinguish between inputs, activities, outputs, and outcomes. Outcomes measure the actual value you’re creating, like satisfied customers or financial profitability, and they are the key to high performance. This is shown here in the “stairway to performance.”
Too often I find organizations where leaders are deep in the weeds, tracking the number of sales calls per salesperson or the quantity of units produced, not the results in terms of satisfied customers, retention of key clients, or profitability. Not only does this produce skewed performance measures but it also breeds turf battles. So when you’re putting together your scorecard, make sure you’re focusing on the right stuff.
When a large health care system in California started measuring health outcomes, a surprising thing happened: patient health increased, while at the same time, health care costs declined. Why this surprising result? A major factor was that doctors started looking at the performance measures and teaming up to treat the sickest people. As a result, the number of “frequent fliers” – people who regularly sought medical care – decreased dramatically.
Paying attention to outcomes pays off in big ways. Yet many companies fail to take the time to systematically figure out how to measure performance. As a result, the business doesn’t flourish as it should. Instead, it stagnates.
When we work with our clients, we help them look holistically at the organization and develop a set of performance measures that tracks outcomes rather than outputs. We then help ensure that the information is communicated throughout the organization on a regular basis – via forums in which people talk about performance, look at trends, and focus on areas where the organization is not meeting its targets.
Sharing performance information in this manner aligns people around a common set of goals and focuses everyone’s attention on how to improve the organization’s performance. It also builds trust when people see that leaders are holding everyone accountable. Done well, a strong set of performance measures will raise the organization to a higher level of success.
Originally published here.
In this hyperconnected and competitive environment, keeping your customers satisfied is non-negotiable. According to a Walker study, by the year 2020 providing great customer experience and building long-term relationships will be a major differentiator for your business overtaking price & product features as the key differentiating factors.
A relationship becomes strong only with trust and openness. Your relationship with your customers is no different. Staying accessible, being easily reachable to customers and engaging with them at each stage of their customer journey is the first step to building trust with your customers. Here are a few important reasons why you should care about being reachable to your audience:
i) Convenience for customers and prospects
Convenience is a critical factor which impacts the customer experience and their purchase decisions. Imagine yourself from the customer’s perspective. When you’re looking for a specific product or service, how would you evaluate similar businesses? One product’s website offers answers to FAQs, an easy-to-navigate website and a responsive support email ID/contact number for support while the other website offers great content and online experience, but chooses to hide all their contact information making it impossible to reach out to them. Undoubtedly, you’ll choose the first product over the second, not because you have any issues or questions regarding the product now, but because when you do have any questions in the future you always have the option to reach out to them.
Staying easily reachable and sharing contact information on relevant pages of the website gives the idea of perceived convenience and can work wonders for your business. Figure out areas where customers may have questions about your product/service and brainstorm ideas on how you can reduce/eliminate those questions with ease.
Highlight how your products/services provide more convenience over the competitors and stay easily reachable to them using a free appointment booking system like SuperSaaS. Set aside some time from your daily schedule to connect to customers and allow them to schedule a time directly to the schedule. The system sends you automated reminders before the scheduled time so you don’t forget to connect. We recommend you to customize the automated follow-up emails to share relevant business information with your prospects.
ii) Adds credibility to your business profile
Every single customer interaction impacts your brand perception, and your business wants to stand out as credible and trustworthy. Your website is your online workspace where the customers interact with you and should reflect your brand values. First, start by sharing your relevant contact details on the website. Make sure your contact information is easy to find and give links to multiple platforms to reach you, for example, links to social media pages.
Second, build your credibility by sharing reviews from existing customers. You do not manage a business in isolation, so it’s not possible to build your credibility just with your own actions. Use a combination of tools like testimonial pages and links to product/service review websites to allow the prospects to see how your existing customers perceive your products/services. Reading reviews (including negative reviews) boosts your credibility in customer’s eyes and also helps in proving that your business is a real business that is easily reachable in case of any real issues. We recommend you to take ownership of your profile on these multiple platforms and respond to the reviews to show your prospects that you’re always there to hear their feedback.
iii) Improve your brand equity & bring value to your clients
According to a recent study, it’s proved that emotion trumps reason when customers are making a purchase decision, even in a B2B scenario. Hence, it is important that your business and your brand are perceived in a positive light by the customers. One way to build a positive brand perception is to include website elements requesting feedback from prospects and customers. This can include engaging elements like pop-up customer surveys, feedback buttons, live chat options, opinion polls, forms asking their requests or requirements, etc. This will help you remove the guesswork from your marketing activities, bring value to your customers and will aid in further improving the business experience.
According to a study by Stella Service, a dissatisfied customer tells between 9-15 people about their experience, and negative interactions with a business are spread to twice as many people as the positive ones. Engaging and being easily reachable to customers reduces the probability of a negative experience left unattended and improves the chances of growth for your business. And for prospects visiting your site, it’s a direct signal that you’re always reachable when they have feedback to share.
Make your customers feel that you really care about them and value their feedback. The product/service you offer is not just to make a profit for your business, but to provide value to your end customers. When they truly believe that, you will observe long-term loyalty and sales growth in your business.
This article was originally published on Complete Connection.
There’s a lot of value in periodically bringing all of your employees together for a team building exercise. When done right, these activities can improve communication, foster cohesion, and bolster morale.
With that said, team building is harder than it used to be, and that’s largely thanks to the phenomenon of remote workers. Simply put, it’s a lot harder to include employees in your group activities when those employees don’t work in the same building—or in some cases, when they don’t even work in the same town!
While it’s challenging, it’s by no means impossible. Let me offer a few specific ways you can include remote employees in team activities.
Start with some small talk. One of the disadvantages of being a remote employee is that you don’t get to participate in everyday small talk, like on-campus employees do. As a leader, you can encourage your virtual employees by building some space into each conference call or video meeting for personal chat. Make it a point to go around to each employee, and especially each remote employee, and ask them something about their family or about how their week is going.
Set up meetings off-site. With Wi-Fi accessibility, it’s easier than ever for your employees to spend an hour or two working outside the office—in a coffee shop, for instance. This can be a good way to include employees who live in the same community but don’t come into the office each day. Set up an afternoon for employees to get together in an external location—somewhere the remote employees can be in the mix!
Assign on-campus employees to work with remote workers. A simple suggestion: If you have a project requiring two people, encourage one in-house person to work alongside a remote employee. Have them get together over Skype or Facetime to work on the assignment together. Simply facilitating these partnerships can be very valuable to building team cohesion!
Sales consultants often make the distinction between transactional and complex sales. Transactional sales - whatever their value - tend to have a relatively simple buying journey, are associated with lower decision risk, and involve fewer stakeholders. The decision is often regarded as tactical rather than strategic, the information required to support their decision is often straightforward and based on specification, price and delivery and the decision-making process itself is typically linear.
Complex sales, on the other hand, tend to be subject to a complicated and often non-linear buying journey, tend to have a higher decision risk, and involve a larger decision team. The decision is often regarded as strategic, the information on which decisions are based is usually complicated and sometimes contradictory, and there is a very real possibility that the potential customer may - after devoting significant effort to the exercise - simply decide to stick with the status quo.
But after observing a large number of complex sales environments, I’ve come to the conclusion that there is another significant factor at play - and that is whether the customer is involved in a familiar or unfamiliar purchase...
Let me explain what I mean: familiar purchases are ones which are similar to those that the organisation and the decision team have made on previous occasions. They have relevant experience of the problem, the options available and the decision-making process.
As a result, they are often confident in their ability to make significant progress in their buying process using their internal resources and expertise plus publicly available information. They often see little need to actively involve potential vendors until they are a considerable way through their buying journey.
These are the sort of projects that have led various researchers to conclude that “buyers are (on average) 57%, 65% or 75% through their buying process before they want to engage with a sales person”.
Unfamiliar purchases, on the other hand, are ones which take the organisation and the decision team into previously uncharted territory. They have much less experience of the problem, of the options available and the factors they need to take into consideration in their decision-making process.
They are typically, as a result, less confident in their ability to drive the buying process forward just using their internal resources and expertise. They may find themselves confused by the range of information and opinions they can find over the internet.
They are much more likely to recognise that they need an experienced external guide. They may choose to engage a specialist consultant to help them. And they may be much more open to having a consultative conversation with a sales person if they believe that they are not simply going to be exposed to a crude product pitch.
These are the sort of projects where it should be possible for a credible and trustworthy sales person to be invited to help the prospective customer navigate the complexities of their decision process at a far earlier stage.
Between these two extremes, we have what I call “deceptively familiar purchases”. These are situations where the customer is - for the moment at least - more confident than can be rationally justified in their ability to apply their past experiences to the current decision process.
This often happens when something in the customer’s situation or environment has changed, and where the customer may not be aware of the latest development or their implications.
It also happens when the customer has developed an unjustified faith in or a strategic reliance on their current strategic IT platforms despite the fact that other more agile vendors have been able to apply breakthrough thinking to the problems the customer is trying to solve - making the new wave of solutions dramatically more effective than those offered by the “old guard”.
Regular readers will know that I’m a great believer in situational sales strategies. Once we learn to distinguish between familiar and unfamiliar purchase environments, we can implement the situationally relevant strategy.
If our prospective customer appears to believe that they are in familiar territory, and assuming that we are not yet their preferred option, we need to help them see their situation from a fresh perspective.
We need to help them to recognise that disruptive forces are disturbing the status quo, and that traditional attitudes and approaches are no longer going to enable organisations like theirs to rise to the challenge of the future.
Before we make any claims about our solution being better, we first need to establish why and how our approach is different, and how this results in lower risk and superior outcomes in a changing world.
We need to hold back from prescribing our solution until our in-depth discovery has uncovered these disruptive forces, the challenges they are creating, and the consequences of failing to adapt to these inevitable changes.
And if our customer has already recognised that they are in unfamiliar territory and acknowledge that they need help, let’s not spoil our opportunity by rushing to propose our solution prematurely. Let’s stick with the problem and its implications until the customer recognises that there’s an overwhelming need to take a fresh perspective.
Either way, let’s ensure that we truly behave as trusted advisors. Let’s share our experiences and insights. Let’s help our prospective customer recognise the advantages of our perspective and our approach. Let’s have value-creating conversations. And let’s at all times resist the “itch to pitch”.
When conducting your next wave of opportunity reviews, I encourage you to ask your sales people to reflect on whether each of their current prospective customers is on a familiar or unfamiliar buying journey, and how they have adapted their sales strategy a result?
And if you get indistinct answers or blank stares, you might want to question whether your sales people truly understand their customer’s situation - and encourage them to take steps to do something about it before the opportunity is delayed or lost through avoidable ignorance.
Bob Apollo is a Fellow of the Association of Professional Sales, a member of the Sales Enablement Society, a regular contributor to the International Journal of Sales Transformation and the Sales Experts Channel and the founder of Inflexion-Point Strategy Partners, the leading UK-based B2B value-selling experts.
Following a successful corporate career spanning start-ups, scale-ups and market leaders, Bob is now relishing his role as a pro-active advisor, coach and trainer to high-potential B2B-focused sales organisations, systematically enabling them to transform their sales effectiveness by adopting the proven principles of value-based selling.
It's well-documented that millennials tend to make different lifestyle choices than baby boomers do, from waiting longer to get married and have children to spending their money on health, wellness, and experiences rather than material goods.
But baby boomers and millennials also want very different types of houses, and it's creating a major problem in the real-estate market.
Fifteen years ago, boomers were building large, elaborate houses in states like Arizona, Florida, North Carolina, and South Carolina, The Wall Street Journal reported. Now, faced with the effort of maintaining such houses, they're looking to downsize.
The only problem? Young people aren't interested in buying their houses, according to the Journal.
"Homes built before 2012 are selling at steep discounts — sometimes almost 50%, and many owners end up selling for less than they paid to build their homes ..." Candace Taylor wrote in The Wall Street Journal.
"These days, buyers of all ages eschew the large, ornate houses built in those years in favor of smaller, more-modern looking alternatives, and prefer walkable areas to living miles from retail," Taylor wrote.
Younger buyers are also disinterested in outdated interior design.
"Design trends have shifted radically in the past decade," Taylor wrote in the Journal. "That means a home with crown moldings, ornate details and Mediterranean or Tuscan-style architecture can be a hard sell, while properties with clean lines and open floor plans get snapped up."
In addition to their love of open floor plans, millennials are known for being partial to minimalist, low-maintenance designs and sleek, discreet appliances — elements not always found in older homes.
Another hurdle for boomers looking to sell is that most younger buyers want to buy modern, newly constructed homes to avoid paying for renovations or plumbing and electric issues, according to a 2018 report from Nationwide Mortgage.
Millennials are often seen as a generation of renters, but many of them actually want to buy homes — it's just much harder for them to do so.
Millennials buying their first home today are likely to pay 39% more than baby boomers who bought their first home in the 1980s, Business Insider's Hillary Hoffower previously reported.
Read more: Millennials are buying a lot more homes than you think
The generation is also facing record levels of student-loan debt, making it hard to take on a mortgage loan, as Business Insider's Akin Oyedele reported.
When millennials can finally afford to buy a home, it makes sense that they'd hold out for something that's exactly to their taste.
SEE ALSO: 11 things millennials do completely differently from their parents
DON'T MISS: 5 millennials who became homeowners in their 20s share their best advice for buying your first house
Join the conversation about this story »
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If you are not doing keyword research then your SEO strategy is incomplete.
In this article, I am going to walk you through your keyword research weak or missed points to make you confident with your SEO.
Find out not only how to do effective keyword research but the best tips to use right now.
Seed keywords are the foundation of your keyword research.
They define your niche and help you identify your competitors.
If you already have a product or business you want to promote online, coming up with seed keywords is as easy as describing the product or service with your own words or brainstorming how other people might search for it.
For example, let’s say you’re starting a website selling med spa services..
The Google searches (keywords) you would first think of are:
That’s a no-brainer, right.
You can start with a super broad keyword and niche down until you see an interesting opportunity.
For example, you pick “music” as your super broad niche and your keyword explorer tool gives you almost 5 million keyword ideas for the seed keyword.
In order to “niche down,” you need to focus on longer and more specific keywords which have the word “music” in them.
So now you will use the “Words” filter to narrow down the huge list of keyword ideas to those with exactly 4 words.
And here’s what you should be able to find:
“music making software free” – You could start a review site and cover all the latest releases and updates.
“game of thrones music” – People want to download music they hear in movies, TV series, TV shows, etc. And given that new TV content is released regularly, this could be a fun niche.
“gifts for music lovers” – There are a lot of famous music bands and leading music labels have a ton of merchandise for their fans to buy. Not to mention musical instrument brands like Gibson, Fender, etc. They must have some affordable gift options too.
“music games for kids” – Who would not love to play some fun music games with kids.
These niche ideas are obviously far from perfect but invest a little bit more time and you’ll inevitably stumble upon something awesome.
The next step is to generate a mammoth list of relevant keyword ideas while also getting a good understanding of what people in your niche are searching for in Google.
There are at least four good ways to do it.
If you own a website that’s been around for awhile, you should already be ranking in Google for a few hundred keywords.
Knowing what they are is a perfect way to kick-start your keyword research.
A good source of this information is a report called “Search Analytics” in Google Search Console:
Search Console shows your average position for each of the keywords you rank for and how many impressions and clicks this brings you.
However, they don’t show the monthly search volume and you’re limited to 1000 keywords only.
Chances are your competitors have already performed all the tedious keyword research work for you.
So you can research the keywords they rank for and cherry-pick the best ones.
If you don’t know who your competitors are, just put your “seed keywords” into Google and see who ranks on the front page.
Let’s do this with a seed keyword – “gifts for music lovers.”
You will see an interesting website ranking on the front page, uncommongoods.com.
Let’s now plug that website in the keyword research tool Ahrefs and browse the keywords it ranks for:
Sometimes even a single competitor can supply you with enough keyword ideas to keep you or your SEO team busy for months.
But if you’re hungry for more, you can go to the “Competing domains” report to find more sites like your competitor.
And we’ve just closed the “competitive research loop”:
a. Put your seed keyword into Google and see who ranks on top
b. Plug their site into Ahrefs to see their best keywords
c. Find more relevant websites via the “Competing domains” report
d. Go back to either step 1 or 2 and repeat
The trick to almost unlimited keyword ideas is to repeat this process over and over.
And don’t neglect tapping into related industries.
You might discover a lot of great keywords which don’t necessarily relate to whatever you’re offering but can still bring very targeted visitors to your website.
Good competitor research is often enough to fill your spreadsheet with a ton of relevant keyword ideas.
But if you’re one of the leaders in your niche, that strategy is not quite feasible for you.
You have to be looking for some unique keywords that none of your competitors are targeting yet.
And the best way to do it is by using a decent keyword research tool.
Luckily, there’s no shortage of them on the market:
Most tools will pull their keyword suggestions from the following sources:
These methods are great, but they can rarely give you more than a couple hundred suggestions.
For example, UberSuggest shows only 316 keyword ideas for “content marketing.”
There are also advanced keyword research tools (Ahrefs, Moz, SEMrush) that operate a keyword database of their own and therefore will give you vastly more keyword ideas.
You can easily go bananas trying to sift through a keyword list of that size, so we have some great filtering options in place:
The aforementioned keyword research strategies are extremely effective and provide an almost unlimited amount of keyword ideas.
But at the same time, they kind of keep you “in the box.”
Sometimes, just by studying your niche well (and adding a pinch of common sense), you can discover some great keywords no one in your niche is targeting yet.
Here’s how to kickstart “out of the box” thinking:
For example, if you’re selling waterproof headphones, here are some of the “out of the box” keywords you might try targeting:
People searching for these things are not necessarily looking to buy waterproof headphones, but they should be fairly easy to sell to.
While executing the aforementioned strategies, you’ll find yourself sifting through thousands of keyword ideas and trying to decide which of them deserve to be shortlisted.
To help you separate the wheat from the chaff, there’s a bunch of cool keyword metrics to consider.
This metric shows you the overall search demand of a given keyword, i.e., how many times people around the world (or in a specific country/city) put this keyword into Google.
Most of the keyword research tools pull their search volume numbers from Google Keyword Planner, which was long regarded as a trusted source of this data.
But not anymore.
For the past few years, Google has been consistently taking data away from SEOs.
But this time, we were able to get away with a cool chrome extension workaround – Keywords Everywhere.
It shows keyword search volume on for most place you are looking on the internet.
Another thing to always keep in mind is the dynamic nature of search volume.
For example, a keyword like “christmas gifts” will naturally spike around Christmas time while having almost zero search volume during the rest of the year.
To check the search volume trend of a keyword you can use a free tool called Google Trends:
So the search volume is basically an annual average.
And if you’re in doubt about the “seasonality” of a keyword, make sure to check the trends.
But there’s one problem with search volume.
It doesn’t always accurately predict the search traffic.
Let’s take a keyword, “Donald Trump Age,” which has a search volume of 246,000 searches per month (according to Google Keyword Planner).
That huge search demand implies you should get a massive amount of traffic if you rank at the top of Google for this keyword.
But let’s see what the search results look like:
A fair share of Google’s real estate is taken by an instant answer to this search query: 70 years.
These “uncommon” search results are known as “SERP features” and there are quite a few different types of them:
Some of them will vastly improve search traffic to your website, but others will steal it away from you.
On the above screenshot from a keyword research tool, you can see 86% of searches for “donald trump age” don’t result in any clicks on the search results.
All because searchers are presented with an instant answer via a Knowledge Card.
The clicks metric is totally invaluable in weeding out the search queries with huge search demand but miserable traffic.
We’re able to show you how many of the clicks get “stolen” by search ads:
On the above screenshot, you can see that a fair share of clicks for “wireless headphones” go to search ads, while clicks for “best wireless headphones” are almost entirely organic.
Search volume and clicks are great metrics to understand the popularity and traffic of a single keyword.
But the keyword may have a ton of synonyms and related searches, all of which can be targeted with a single page on your website.
An example : The keyword “I’m sorry flowers” doesn’t look very promising in terms of search demand or traffic:
The #1 ranking result usually gets no more than 30% of all clicks.
This means you can hope for around 60 visits per month if you rank #1 for the keyword “I’m sorry flowers.”
And this is a bit of a discouraging projection, right?
But let’s look at how much search traffic the #1 ranking page for “I’m sorry flowers” keyword actually gets:
On the above screenshot, you can see it is attracting almost 300 visitors from Google per month.
That’s because it ranks for 48 different keywords and not just the “I’m sorry flowers” keyword alone.
We’ve been advocating the importance of long-tail keyword traffic for quite a while, but it doesn’t hurt to stress it again.
People search for the same things in all sorts of peculiar ways.
So a single page on your website has a potential to rank for hundreds (if not thousands) of related keywords.
So it’s time to stop evaluating keywords just by their search volume (or clicks) alone.
You need to look at the top-ranking results and see how much search traffic they get in total.
Unquestionably, the best possible way to gauge the ranking difficulty of a keyword is to manually analyze the search results on Google and use your SEO experience (and gut feeling).
But that is something you can’t do at scale for thousands of keywords at once.
That’s why the keyword difficulty metric is so handy.
Each keyword research tool has their own methods of calculating keyword ranking difficulty score.
The more quality backlinks they have, the harder it would be for you to outrank them.
RECOMMENDATION
High competition is not always a reason to give up on a keyword.
It all comes down to the balance between the business value of the keyword and its ranking difficulty.
Some keywords may be super easy to rank for, but the visitors they bring to your website will never become customers.
So it doesn’t make sense to waste your effort there.
On the other hand, some insanely competitive keywords can be the best thing that could happen to your business if you rank for them.
So they’re well worth the investment (and wait).
This metric is most important for advertisers rather than SEOs.
However, many SEO professionals treat CPC as an indication of keywords’ commercial intent (which actually makes a lot of sense).
One important thing to know about Cost Per Click is it is much more volatile than organic search volume.
While organic search demand for a keyword fluctuates on a monthly basis, its CPC can change pretty much any minute.
Therefore, the CPC values you see in third-party keyword research tools are nothing but a snapshot of a certain timeframe.
If you want to get the actual data, you have to use Google Ads.
So you’ve generated a ton of promising keyword ideas and used the aforementioned metrics to identify the very best ones.
Now it’s time to bring some structure to your list.
The days of targeting one keyword with one page are long gone.
Now SEO professionals and business owners are facing a brand new struggle:
Should I target a bunch of relevant topics with one page or create a separate page for each set of keywords?
We know one page can rank for hundreds (if not thousands) of relevant keywords.
But how much is too much?
And how do you know which keywords fit your topic and which don’t?
For example, the main keyword of this article below is (obviously) “keyword research.”
And you want to know what other relevant keywords you can also rank for along with it.
So you take the #1 ranking page for “keyword research,” put it into a Site Explorer and sift through the keywords it ranks for:
And in an instant, you will see two decent keywords:
keyword analysis – 1,400
keyword search – 6,200
This means you don’t need to create separate pages to target each of these keywords (though maybe they actually deserve it), but try to rank for them with this single post.
So that’s the very first step in bringing some structure to your random list of keywords.
You need to find which keywords are semantically and contextually related and group them under a “parent topic” to target with a single page.
SIDENOTE: “parent topic” is the highest volume keyword that a page ranks for.
So you have grouped semantically related keywords by “parent topic” and mapped them to different pages of your website.
The next step is to group these “pages” by the so-called “searchers’ intent.”
Behind every search query people put into Google, there’s a certain (and oftentimes very specific) expectation.
Your goal is to decipher this expectation upfront, so you could build a page to perfectly match it.
This could be quite challenging at times.
Let’s take a keyword, “roses,” for example.
What’s the searchers’ intent behind it?
Most likely it’s one of these two:
The best ways of deciphering intent behind the search query is to Google it and see what comes up first.
Google is getting better and better in identifying the intent behind each search query, so the search results usually talk for themselves.
The SERP above serves both these intents with an image strip, followed by a Wikipedia link.
But then you get Guns’N’Roses Twitter profile. What are they doing in the search results for the keyword “roses”?
Well, it looks like Google has identified that it’s what people looking for the keyword “roses” want to see.
Once you figure the intent behind your keywords, you might want to map it to the stage of the sales cycle that it represents:
The bullet points above are just one of the many ways different marketers map out the so-called “Buyers’ Journey.”
Here’s an alternative look at it:
Source: customerjourneymarketer.com
Whether you want to map your keywords to any of the existing models or come up with your very own one is entirely up to you.
For example, Everett Sizemore from GoInflow.com suggests mapping keywords/topics to user personas.
Stick with whatever makes the most sense for you.
This grouping is actually closely related to grouping by intent.
But this time, you need to figure out which intent drives the best Return on Investment (ROI) for your business.
If you’re mainly looking for traffic and brand awareness, you might focus on keywords that will bring tons of visitors but won’t necessarily convert into leads or sales.
That’s what HubSpot does with content on their blog.
Take a look at their top-performing articles:
There are tons of people looking for “how to make a gif” and HubSpot is generating almost 100k visitors from this single article alone.
If you have an unlimited marketing budget, you can fire all cannons at once.
But most businesses can’t afford this luxury so they have to think about which keywords will drive their business metrics and which ones will only drive their vanity metrics.
Don’t ignore good keywords just because they don’t have commercial value.
For example, other than bringing tons of traffic to the HubSpot blog, the article on “how to make a gif” also attracts a ton of backlinks.
Prioritization is not really the “final step” in your keyword research process, but rather something you do naturally as you move through the prior steps.
While you’re generating keyword ideas, analyzing their metrics, and grouping them, you should be noting the following things:
You can go as far as adding dedicated columns in your keyword research spreadsheet to give scores to each keyword idea.
Then, based on these scores, it should be fairly easy to pick the “low hanging fruit” with the best ROI.
Always remember, it’s not the “easiest to rank for” keywords you should be looking for.
It’s the ones with the best ROI.
Conclusion:
There’s obviously more to keyword research than everything we discussed, but this is a simple process which can be universally applicable to any website or industry. Good luck and let me know if you have questions in the comments below.
When it comes to inbound and outbound sales tactics, there’s a big difference between ideal mix and realistic mix.
Ideally, every sales pro I know would prefer no mix at all – they’ll take all inbound all the time. Who wouldn’t want the scenario where sales prospects forever float your way?
Realistically though, most sales pros need at least least some level of outbound activity to make quota.
The trouble for many sales pros lies in finding time to build their inbound sales machine while also making sure to meet near-term objectives. When the month is half over and you’re only halfway to quota, it’s hard to justify inbound activities. But by ignoring inbound, it’s more likely you’ll be in the exact same position midway through next month, and the month after that. That’s why proactively establishing the right mix is so important.
In this post, we aim to help you establish the right mix of inbound and outbound, one that contributes to both your short- and long-term career goals. First though, let’s make sure we’re aligned on what inbound and outbound sales tactics are, exactly.
Inbound sales tactics are performed with the intent of getting future sales prospects to come to you. Inbound tactics also differ from outbound in that they’re scalable. One inbound tactic, performed well, can potentially generate several sales prospects over an extended period of time. Examples of inbound tactics include optimizing your LinkedIn profile, publishing thought leadership content, and bringing valuable contributions to relevant online conversations.
Outbound sales tactics are performed with the intent of winning a single sale and are not scalable. Examples of outbound tactics include phone calls, emails, and one-to-one social media interactions.
Most modern sales pros desperately desire a mix that includes more inbound and less outbound. They know that, in the long run, a strong inbound strategy will keep their pipeline churning and converting with less effort required. Yet many still struggle to make it happen.
The way out of reaction mode is twofold. First, sales pros can free up time for inbound tactics by doing outbound better. Second, sales pros can make sure to take full advantage of their newfound free time by proactively planning their inbound strategy.
As we’ve established, when you’re below quota, outbound can seem like your only option. But let’s also assume that part of the reason the salesperson is below quota is because their outbound tactics aren’t working like they could. What if that same salesperson could invest less time in outbound and see better results, thus freeing up more time to invest in inbound tactics? To that end, here are three distinct ways LinkedIn can help.
LinkedIn’s advanced lead and company search lets you narrow your search using more than 30 advanced filters. Many sales teams have created an ideal customer profile. Sales pros can use their ideal customer profiles to filter their searches down to only the sales prospects who resemble that company’s ideal customers. By narrowing your prospect lists to include the “best fit” people and companies, you can more confidently invest time into accounts that are more likely to become customers. And because these leads and accounts are similar to your current customers, it’s also more likely that you have a relatable story to tell them.
Often in sales, there are situations where we’re pretty confident that we have the right person or company but the timing just isn’t right. In our heart of hearts, we know that we don’t yet have a personalized message that’s compelling enough to prompt a response. To proceed at this point would be counterproductive.
By saving leads on LinkedIn, you’ll see their updates and shares right from your Sales Navigator home page. You can then use this information as context when you reach out to start a conversion. For example, upon logging in one morning, you may notice that one of your saved accounts just made a major acquisition while a saved lead is starting a leadership position at a new company, either of which might represent a prime opportunity to finally spark that conversation. And because more of your interactions are triggered by insight, you should receive a higher response rate, thereby getting better results from fewer interactions.
Research from Pace Productivity shows that outbound sales reps only spend 22% of their time selling. More time is actually devoted to “administration” (23% of their time). Pace’s research also showed that sales pros send 2.2 hours each week “maintaining customer data.” That’s nearly three full weeks each year, entirely devoted to updating customer data.
By taking advantage of Sales Navigator CRM integration, you create a connected experience between Sales Navigator and your CRM. This saves valuable time because relevant account and contact details are automatically and accurately captured and logged into your CRM. Once implemented, the integration also helps you understand which activities on LinkedIn are most responsible for your success, making it easier to replicate that success.
Now that you’ve carved out some time for inbound, where best to start? Turns out you can also lean on LinkedIn as your inbound sales machine.
The key here is to determine where you’re best positioned to succeed with inbound. Where do your strengths and experience intersect with your buyer’s journey?
For example, maybe you’ve learned a thing or two about video and you keep hearing the same questions from early-stage prospects. You might consider creating helpful video tutorials and uploading them to the social channels you use most, while also uploading the videos to the multimedia section of your LinkedIn profile.
Also, know that inbound and outbound aren’t mutually exclusive. Some inbound efforts, such as regularly maintaining and optimizing your LinkedIn profile, doubly benefit you because they assist your outbound efforts when prospects research you, as many do. In our previous example, the sales pro might also link to her videos in her outbound messaging to provide prospects with a helpful experience that also makes it easier for prospects to familiarize themselves with her and trust her.
Start by brainstorming all your inbound selling possibilities. Similar to filtering leads and companies based on propensity to buy, filter your inbound possibilities list based on propensity to help you make more sales. Then, get started by allotting time for the one or two inbound activities you’re most excited about.
For more advice that can help you achieve your ideal sales scenarios, be sure to subscribe to the LinkedIn Sales blog.
The definition of leadership is complex and widely contended: ask a different expert and you’ll get a different answer.
Let’s just say for our purposes that leadership means guiding others to get results. It is the act of determining a direction and course of action that leads to extraordinary results. It requires varying degrees of many skills, including self-discipline, optimism, initiative, resourcefulness, pigheaded determination, empathy and emotional intelligence, communication, influence, and negotiation.
Got all that?! Don’t worry, this Ultimate Guide to Sales Leadership will help you digest it all.
The first publisher who asked for my first book, The Only Sales Guide You’ll Ever Need, hated the very first chapter because it was about self-discipline He said, “Why would you start a book with a chapter on self-discipline. Everybody hates that.” This is not exactly what you hope to hear about your work, let alone from a person who asked you for the book.
I patiently explained two ideas to this acquisition editor. First, I explained that the things that I called “Mindset” get exposed more in sales than in other endeavors. I went on to explain how things that show a lack of character get amplified, and when one is deficient in these traits, they tend to fare poorly in sales.
I went on to explain that if a person is unable to keep the commitments they make to themselves, then much of what comes after self-discipline is of little or no use to them. If someone can’t will themselves to prospect or follow-up or keep their commitments, how can they succeed?
My belief that the ability to will oneself to take action is still the first among disciplines has only grown stronger over the last couple of years. More and more, the gap between a salesperson’s results and their goals is not made up some deficit of skill. Instead, it’s a deficit of will–coupled with an absence of accountability.
With few exceptions, we each know what we need to do to produce the results we want. When we don’t, that knowledge is available with a few keystrokes or a phone call. There is no lacking when it comes to discovering the recipe. What is more difficult, however, is following the recipe. For most of us, the largest obstacle between our current results and the results we seek stares back at us in our mirror each morning.
Optimism is a philosophy. It’s the belief that things will work out for the best, regardless of how the situation looks today. Optimism is a personal choice to view things positively. It’s your attitude. It’s personal. And it’s a choice. Optimism is a foundational success skill for sales people.
Imagine a job in which part of the way that you create value is by acquiring new customers. Imagine a job where your role is creating value for these prospective customers by providing them with your company’s products or services, helping them with their problems and challenges, and helping to make massive improvements that make them more competitive in their space. Imagine leading and managing that value creation process.
That sounds like an awesome job, and we call it B2B sales!
Would you pick up the phone and dial the next prospect if you believed it wouldn’t make a difference? Would you again (and again) call the prospect that has already told you no so many times that you have lost count?
Optimism is what allows you to continue. It allows you to believe that you can make a difference. It underscores your belief that the next call will be the call that moves the chains. It allows you to believe that-eventually-something will change for the prospective client and that change will result in your gaining an opportunity. It allows you to believe that you can create enough value to change your dream client’s mind.
Optimism allows you to draw on your resourcefulness to overcome obstacles and roadblocks, instead of deciding not to try.
Initiative is the ability to take action proactively. It’s the opposite of being reactive. It is good and necessary that you do what you are asked to do, and it is good that you do what is expected of you. You need to do those things to be successful, too. But what separates the most successful from the rest of the pack is their ability to take initiative and do what needs to be done before anyone else recognizes it needs to be done.
The lack of initiative results in the salesperson failing to identify and act on ideas that have the potential to create more value for the client than was expected or bargained for. It results in missing the chance to do more than is expected and creating something wonderful.
Initiative is perhaps the greatest demonstration of a willingness to own the outcome of whatever endeavor it is that you are engaged in.
Resourcefulness is the ability to find a way to achieve your goal or to make one. This is especially true when the goal is difficult to achieve and when little or no direction is given. Resourcefulness is the ability to think creatively, to generate ideas, and to identify alternatives. Resourcefulness is also imagination, the ability to visualize how something could be achieved when there is nothing there but the vision.
To be resourceful takes self-discipline and iron will. Self-discipline enables the belief that there is a way to achieve the outcome. And it takes an iron will to ignore the naysayers, the devil’s advocates, and those who simply lack resourcefulness themselves and so have no interest in seeing you succeed.
Great salespeople use their resourcefulness to find ways into prospects that others fail to uncover. Once inside, they work with their prospects to generate ideas that create a vision of how a problem may be solved or a competitive advantage might be gained–for them and for their prospect.
They imagine a way. Then they help create that way.
Determination is the act of deciding on a desired outcome and taking action to achieve it. It is being resolute in purpose and persevering until you achieve your desired outcome.
Determination allows one person to continue in their pursuit of an idea or a goal for as long as it takes for that goal to be achieved. It provides those who possess it with the ability to continue to chase a dream, even when all of the evidence indicates that it cannot or will not be realized.
Determination is an essential attribute of great salespeople, allowing them to succeed where others fail. It provides the salesperson with an immunity to the word “no” and allows the professional salesperson to persist in their efforts to acquire new clients and to succeed in delivering the outcomes they have promised.
Empathy is the ability to feel what the other person is feeling and emotional intelligence is the ability to manage your own emotions, as well as the emotions of others. Together they are the foundation of trust.
Empathy allows a salesperson to understand deeply what their prospect is feeling. It is the patient exploration of the other’s person’s thoughts, feelings, and emotions. In part, it allows them to create a connection with their prospect and customers.
Emotional Intelligence solidifies that connection. While empathy allows the salesperson to understand what the prospect or customers is feeling, emotional intelligence is what allows them to communicate that they understand those feelings and their implications.
Together these abilities allow the salesperson to understand the other person’s communication in not only their words, but also in what lies beneath their words. Working to understand another person’s thoughts, their feelings, and emotions, and communicating with emotional intelligence, are the foundations of building trust.
Communication is the transfer of information. In the past, sales and marketing people believed that communication was the act of conveying their ideas to their prospective buyers and clients. Some sales and marketing professionals still do.
But the one-way communication of ideas is not communication. Communication is a two-way exchange of information. As one party conveys information, the other party gives feedback that is used to ensure that the meaning is conveyed and understood.
Communication skills begin with the ability to listen well. Great salespeople are curious. They have hundreds of questions they would like answered, and they usually have more questions than they can comfortably ask during a single meeting with a prospect or a client. The quality of these questions is a form of communication in and of itself; it communicates the desire to understand.
Influence is the ability to persuade others to act differently, to behave differently, or to believe something.
Great salespeople have an enormous capacity to influence and persuade others. But it isn’t a tactical influence. Their ability to influence others is the natural outgrowth of the other foundational attributes.
Great salespeople are able to influence others because they are first able to influence and persuade themselves. Someone who is unable or unwilling to keep the commitments they make to themselves doesn’t easily persuade others. Influencing others begins with keeping your commitments.
Great salespeople influence others by their ability to ask effective questions. They ask questions that demonstrate their ability to understand the challenges, the problems, and the opportunities. The nature of these questions demonstrates that they have the expertise to be trusted, as well as their desire to truly understand.
Negotiation is the art of the deal. Negotiation is an event, or series of events, designed to produce an agreement of how best to proceed. These events are dialogues to consider all of the various interests and to create a consensus on an agreement that is most advantageous for all stakeholders.
But, let’s be honest. Not all who negotiate do so with the intention of maximizing the value created for all interested parties. Some negotiate only for their own individual advantage.
Salespeople spend much of their time negotiating outside of negotiating final agreements. Final agreements are the events around contracts and the legal documentation that take place before they move forward with their solution. Before this final agreement, a salesperson has negotiated dozens of prior agreements. Professional salespeople negotiate for agreements to proceed throughout the sales process; they negotiate to advance the sale at every stage.
They negotiate for the first agreements that result in their gaining access to the individuals who are involved in buying or using the product or service that they sell. They exchange the value that they potentially create during the exploration of issues for access to the individuals within the prospect organization. Negotiating for time is a challenging negotiation; it is a commodity in short supply.
As the salesperson learns about their client’s business, they negotiate each advance, including access to additional individuals within the buying team and access to the information they need to help create a solution.
Successful salespeople negotiate agreements within and between the departments or divisions of their client companies, ensuring that the implementation and the execution of their product or service creates the maximum value for all stakeholders without damaging something upstream or downstream.
Successful salespeople negotiate agreements within their own company for changes to their offering, resulting in modifications that create value for their individual clients.
When the ability to negotiate is missing, the salesperson struggles to advance the sale from stage to stage. They struggle to gain the initial access to individuals within their prospect’s company, often because they fail to deliver anything of value in exchange for time. When they are fortunate enough to get face time with their prospects, they fail to negotiate next actions.
When the ability to negotiate is missing, salespeople fail to negotiate within their own company. They fail to sell the modifications, the changes, and the exceptions their prospect needs from their own organization. This results in their not being able to create the value necessary to win the deal.
Great salespeople have the ability to navigate a variety of negotiations, with both sides trusting that they can create a win-win agreement.
When leadership is missing, the salesperson cannot guide his team, or his prospect’s team to achieve the end result that he sold. Great leadership involves a winning combination of all of these skills and the ability to achieve results.
"The first ever playbook for B2B salespeople on how to win clients and customers who are already being serviced by your competition."
Buy NowThe post The Ultimate Guide to Sales Leadership appeared first on The Sales Blog.
CRM systems don't always get a good rap in sales. Sure, there are notable benefits: They help sales professionals track deals and flag opportunities that might require additional nurturing.
But to sales reps, they can seem like nothing more than tedious time sucks. Data goes in, and no clear benefit comes out.
Showing sales professionals what's in it for them can help change their perception of the benefits of CRM and boost adoption and usage. Here are some of the major benefits of incorporating CRM systems into a company's sales process.
With a CRM, you can easily keep track of contact data. You'll be able to see if the contact visited your website, downloaded content from the site, or spoke with a member of your sales team.
Sales reps can also log notes from their calls or email interactions with the contact. And all of this information is searchable within the CRM.
Have you ever wanted to create a list of contacts to reach out to based on specific criteria? If you and your sales team are working out of an Excel sheet, this seemingly simple task can be quite difficult.
Many CRMs allow you to sort contacts by the data you've collected about them. For example, you can filter by location, company size, deal stage, etc. This way, you'll have a clear idea of how to position your outreach for each segment.
CRMs allow you and your sales team to collect and aggregate data about prospects and deals. By creating sales dashboards and reports, salespeople can better manage their pipelines, deals, and contacts.
Sales managers can see how their team is tracking towards quota attainment and see the number of closed deals. And VPs and other organization leaders can monitor the amount of revenue that's been generated.
The key to any successful sales organization is the ability to plan strategically and make informed decisions. With CRM reports that pull in key metrics like MRR and year-over-year growth, it's easier for sales leaders to identify trends and develop forecasts.
Plus, CRMs allow them to see which sales activities and sources are the most profitable lead generators. This data helps sales leaders create sales projections for upcoming months and adjust pipeline estimates if needed.
Your sales team will have one place to keep track of leads, prospects, and customers. Many CRMs allow you to see activities like emails, calls, and meetings booked.
Sales managers can use this type of data to identify patterns and see which sales processes are working for their team and which ones could be improved. And this information will help you grow your sales organization and business.
Still not convinced about the benefits of a CRM? Here are a few, high-impact statistics that might just convince you to add a CRM to your sales process.
1. A CRM is one of the most popular tools for sales reps.
2. The use of a CRM can increase sales by up to 29%.
3. Sales teams that use a CRM can increase productivity by up to 34%.
4. The average return on investment for a CRM is $8.71 for every dollar spent.
5. Organizations that use CRMs have increased rates of customer retention and satisfaction.
6. CRMs improve data accessibility. And data accessibility can shorten the sales cycle by 8-14%.
Using a CRM system means reps can be more productive, sell more, and get references. Armed with these stats, you might just change some perceptions about CRM system benefits and find the best CRM for your business.
To learn more, check out these additional CRM benefits next.
By Mars Dorian, {grow} Contributing Columnist
I’ve recently watched a mini-documentary about Axel Springer, one of Europe’s biggest print publishers. In post-war Germany, he wanted to create THE newspaper for the masses.
His formula was simply:
In a few years, this newspaper called ‘Bild’ (German for ‘view’, ‘sight’) became one of the most popular papers in Europe. Critics call it a populist paper stirring up public emotions to drive sales and ad revenue up. But this ad model worked for decades.
Sounds familiar? Well, it’s almost the same story in our online content creation age.
Digital content companies like Buzzfeed, Huffington Post, and Vice Media have laid off substantial amounts of employees, partly due to declining ad revenue.
Digital content nowadays features clickbaity headlines and evokes strong feelings of anxiety. The goal is to make you tap and share the content to increase the views for the advertisers. No quality content required!
That’s why Buzzfeed and co. often look like classic, sensationalist tabloid papers.
Consuming content from digital content providers has become a nuisance:
It seems the content providers want to make the reading experience as difficult as possible.
These anti-consumer tactics encouraged the use of ad blockers. According to e-marketer, every fourth American uses an ad blocking app. This is equivalent to about 70 million users in the US alone!
Spotify, Netflix, or your favorite software-as-a-service thrive on subscriptions. They slowly but surely replace the classical ad model.
Below are the main advantages over the interruptive ad economy.
Intrusive ads disrupt the consumer experience. Subscriptions are 100% voluntarily and don’t interrupt your experience.
The content producer asks the customer for a monthly fee in exchange for ongoing special access. The forever quotable Seth Godin said it best: ”Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.”
I loathe ads even on websites I love to read. However, I happily support content creators on Patreon and Gumroad with my money. The former model interrupts me, the latter asks me for permission.
Which leads us to the next point.
Ad models focus on advertising companies. Subscription models focus on consumers.
In legacy TV, shows are not created for the consumers but to attract ad money. That’s why they’re spammed with mini-cliffhangers and artificially bloated. They often run up to 22 episodes per season. Their only goal is to keep the audience hooked long enough to air as many pricy commercials as possible. After all, company ads pay for these shows, NOT the audience.
Subscription services operate the opposite way.
Streaming services like Netflix or Amazon Prime produce shorter shows with an average of 10 episodes per seasons. They also ditch mini-cliffhangers. Why? The producers need to make each episode as engaging as possible. The audience pays for the shows, not companies.
Guess which model is more consumer-friendly?
When milking views for ad money isn’t an issue, you can ditch fast food content. The predictable income from monthly subscriptions allows you to experiment with different styles. You can try out long-form written content, video, audio or a mix and see what your audience prefers. By subscribing, they already gave you permission to go ahead.
It’s not just the big companies using the subscription models. Artists, online shows, and individual content creators use subscription services like Patreon or Gumroad to sponsor their output.
In a world with declining customer loyalty, the subscription model supports our natural lethargy. Once subscribed, you’re supporting the content creator on an ongoing basis without any additional hassle on your side.
The revenue models are changing constantly, especially in our online world.
Are you going to use a subscription-based model for your content creation business? Yes, and if no, why not?
Mars Dorian is an illustrating designer and storyteller. He crafts words and pictures that help clients stand out online and reach their customers. You can find his homebase at www.marsdorian.com and connect with him on Twitter @marsdorian.
The post Why content creators need to ditch the ad revenue model appeared first on Schaefer Marketing Solutions: We Help Businesses {grow}.
As a sales rep, it’s only natural to want to close every lead you talk to. But if you’re dealing with a tire kicker, it’s critical to cut your losses and move on.
What makes someone a tire kicker? These prospects drag their feet, haggle endlessly, and beat around the bush. They waste your time and keep you from working the quality leads that are much more likely to actually buy.
In this article, we'll explore how to identify tire kickers so you know where to focus your attention.
Table of Contents
Successful sales teams quickly remove tire kickers from their pipelines, freeing reps to focus their time and energy on better opportunities.
As sales expert Marc Wayshak recommends, “Stop trying to close every single person you get in front of. As soon as you determine that a prospect isn’t a good fit, move on.”
Quality over quantity.
Of course, it’s not always easy to distinguish a tire kicker from a qualified prospect. To identify tire kickers, expert sales leaders suggest looking out for the following warning signs.
The first sign of a likely tire kicker is that they don’t match your customer profile or target persona. To determine whether a prospect is likely to be a good fit, ask yourself the following questions:
Pro tip: It’s not just about demographic box-checking. Expert Steve Clark notes, “When creating a buyer persona, one must take into account more than just demographics. Motivations, interests, design preferences, and purchasing behaviors should all be taken into account.”
If a prospect doesn't meet the criteria that you set, then they’re not likely to convert — and so they’re not worth your time.
According to a recent report, more than 80% of shoppers do their own research before making a purchase. Educating prospects is part of the sales journey. However, if a lead doesn’t seem to have done any homework on your product, it might be a sign that they’re just kicking tires.
A study from Gartner found that serious B2B buyers spend more than twice as much time doing independent research than they do talking to potential suppliers.
Whether you’re a B2B or B2C business, the people who are most likely to buy usually come to you with at least an idea of what your business does.
Consumers and companies that haven’t taken the time to learn about your value proposition are less likely to have a pressing need for your product. It’ll take a lot longer for you to nurture and educate them through discovery calls, marketing emails, and other efforts.
Pro tip: You shouldn’t rule out these leads entirely. But if you spend too much time on these low-yield prospects, it’ll cut into the resources you have left to pursue the leads who are more likely to make a purchase.
Another tell-tale sign of a tire kicker is a lack of urgency. If they aren’t demonstrating a pressing need for your products or services, they’re unlikely to buy them.
“For serious buyers, time is money, and projects usually run on a deadline,” explains Kathleen Smith, marketing and sales consultant. “If someone can’t say when they might be ready to buy, they’re probably not serious about buying anytime soon.”
To determine how urgent a prospect’s need is, ask yourself the following questions:
Evaluate if the lead isn't highly motivated to solve their problem, or if they don’t have a clear timeline in mind. Perhaps they’ve got other, more urgent issues to resolve. They might not be ready to make a purchase.
Pro tip: For leads who don’t have an urgent need for your offering, keep in touch via educational materials or newsletter. This keeps you in their mind without pushing a sale on them.
You can’t close a deal with someone who doesn’t have the budget to pay for your products. A prospect may be genuinely interested in your business. They may even have a pressing need. However, if they aren’t able to foot the bill, they’ll ultimately just be a waste of your time.
There are different barriers that can keep someone from being able to purchase. Some leads might be unable to afford your prices, while others may not have the authority to make buying decisions. Whatever the cause, note if a prospect seems unwilling to pay anything close to your rates, makes excessive budget objections, or haggles constantly. They may not be really interested in or capable of buying.
Pro tip: Author Aja Frost recommends a transparent approach to letting prospects know that there isn’t a budget fit. “Rather than abandoning the deal with no warning, let your prospect down gently by saying, ‘Given what you’ve told me about your budget, I don’t believe our product is the right fit for you,’” she says.
It’s always worth maintaining a positive relationship with potential customers. Even if they can’t buy today, they could be back tomorrow with a bigger budget or the approvals they need to spend it. So keep the door open for future conversations.
When possible, see if you can find free tools or resources that might help these leads in the meantime. However, don’t let them clog up your pipeline for too long.
Many sales processes include free offerings to help move prospects through the pipeline. Whether it’s educational content like a webinar or informational call, a free trial, or some other discount, these giveaways can help turn leads into paying customers. As such, they’re an important tool in a sales rep’s toolbox.
That being said, you’ll sometimes run into prospects who seem to only be interested in the freebies. These tire kickers will happily take advantage of whatever free resources you’re willing to provide. But when it comes time to pay for a product or service, they drag their feet.
Pro tip: As Business Strategist Kristen Miller warns, “Freebies attract freebie-seekers and tire kickers. Often, spammers too. Now, I’m not saying you’re never to offer free lead magnets, not at all. We’re all here to add value to this world. But if you’re just starting out, then you’ll exhaust yourself by constantly coming up with freebies only to attract the lowest level potential clients possible.”
This can be a tricky balance to strike, as freebies certainly play a major role in many sales cycles. But if you’ve got a lead who loves a free lunch but won’t pay for dinner, it might be time to part ways.
Building personal relationships with customers is an important part of many sales processes. That means leaving room for conversations to flow (and sometimes into unpredictable territory). But if a prospect strays far from the planned agenda, repeatedly goes off on unrelated tangents, or seems to be shooting the breeze, you might be talking to a tire kicker.
It’s not always obvious when this is happening. A conversation may seem to be staying focused. Then, before you know it, you’ve spent an hour answering countless questions about your company’s products and services. You may end up providing detailed information about minor features or offering general, consultative advice without any firm commitments.
Pro tip: To keep your conversations on track, Enterprise Sales Leader Josh Gillespie suggests, "While there’s nothing wrong with being friendly and personable, if your sales conversations with a specific prospect are constantly wandering off-topic, trust your gut and take action.”
Taking a few minutes to build rapport is crucial to earning a prospect’s trust, but you also have to protect your own schedule. So make sure to outline an agenda for each call or meeting. If a lead seems to take control of every conversation and veer off track, you may be unable to make much progress.
Beware of prospects who seem frozen by fear or unable to decide on anything. These tire kickers suffer from analysis paralysis. They’re so afraid of making the wrong choice that they never end up settling on a solution.
To avoid buyer’s remorse, they pepper you with time-consuming demands for reassurance about your product or service. Nothing you say seems to be enough to address their concerns.
Pro tip: Leslie Ye, a sales expert, emphasizes the importance of validating prospects’ concerns. She suggests that if you’re selling a complex software solution, you might reassure a potential client by saying, “I understand, implementing new software can feel like a daunting task. Thankfully, we have an incredible tech team that has experience working with similar organizations and can handle a seamless transition for you.”
If a prospect remains hesitant after you’ve acknowledged their fears and offered solutions, it might mean you’re dealing with a tire kicker.
Of course, some amount of hesitation is to be expected, especially from first-time buyers. But if you find yourself struggling to guide a prospect toward a decision, they may be using their fear as an excuse not to commit.
What do you do if a prospect seems all in one day and lukewarm the next? One of the most frustrating kinds of tire kickers are those who exhibit inconsistent levels of enthusiasm. They express excitement during one conversation but become unresponsive when you follow up.
Entrepreneur Sujan Patel is all too familiar with this phenomenon.
“Your lead says all the right things, and emails you back with optimistic notes full of exclamation marks and smiley face emojis,” he describes. “But when it comes down to doing the deal, their actions tell a totally different story…"
Patel acknowledges that hard to turn people down. However, "clarity is always better — for both parties — than wasting time on a relationship that’s never going to go anywhere,” he says.
Pro tip: It’s easy to waste a huge amount of time on these mixed signals. If you find yourself constantly second-guessing a lead’s intentions, you might have a tire kicker on your hands.
There’s no surefire way to determine whether someone is genuinely interested or just kicking tires. Keeping an eye out for the warning signs throughout your prospecting and qualification processes. This can help you avoid these time-wasters and keep your pipeline moving forward.
Remember: The best salespeople aren’t those who try to close every deal. They’re those who can recognize when a prospect isn’t a good fit, walk away early, and focus their time and effort on nurturing quality leads.
Choosing the right account-based marketing software can be a messy process.
Some ABM software is an add-on to an existing tool. Some companies sell relevant software but not explicitly for ABM. Whether you need certain tools depends on the scale of your program or your target accounts.
Ultimately, a successful ABM campaign needs to solve three problems. Software can help with each:
This post walks you through three ABM tools in depth. You’ll get an idea of what ABM software can do and how it does it. It also surveys other all-in-one ABM tools and supporting software.
As Steve Watt details in his course on account-based marketing, a pilot program is an essential starting point for account-based marketing. Pilot programs refine the process—and your target list—while (hopefully) demonstrating enough ROI to earn buy-in from marketing, sales, and executives.
So which ABM tools do you need to execute a pilot program successfully? As Watt argues, few to none. A pilot program, in addition to testing your ABM strategy, is the best way to test for software needs.
Many popular ABM tools scale a manual process. That makes it difficult to know which ABM tools you’ll need before you have a strategy. Are you targeting a few dozen accounts? You may not need anything. Are you targeting a few hundred? You’ll almost certainly need something.
You may get what you need simply by pulling data from other martech platforms you already use. But you won’t know what you need until you run a pilot program. The initial research will show you which company or individual insights, in your industry, are hidden from view.
Once you’ve passed through the pilot phase, a good place to start is Forrester’s Wave report.
The Forrester Wave report on ABM tools identifies three industry leaders—Demandbase, MRP, and Jabmo—among 11 other entrants offering account-based marketing platforms.
Demandbase and Jabmo focus exclusively on ABM. MRP is a predictive tool that serves the ABM market—as well as email, direct mail, and others who benefit from predictive marketing.
The more detailed dive below isn’t an endorsement of Forrester’s “Leaders” over other ABM solutions. However, for those unfamiliar with their options, it’s a good way to understand what the tools can do and how they do it.
Demandbase is generally regarded as the industry leader—with an equivalent price tag.
While it doesn’t publish prices publicly, an interview with the Demandbase CEO in 2017 claimed that the average revenue per customer per month was $20,000. Smaller businesses purchasing partial access, he continued, “may come onboard for $2,000 to $3,000 per month.”
G2 Crowd confirms that it’s a high-cost option. Demandbase’s costs place it in the 96th percentile for “Marketing Account Management” software.
The high price tag self-selects Demandbase customers. It makes sense for those who are going after big fish. User reviews on G2 Crowd reinforce that perception:
DemandBase is on the pricier side, it also doesn’t do a very good job with targeting smaller businesses (really only good for mid-to-large size businesses).
What does the platform do? The starting point for Demandbase and other ABM tools is a collaborative account identification process:
ABM software like Demandbase goes beyond demographic, firmographic, or psychographic data. It’s not just a giant CRM that matches customers with a subset of relevant accounts.
Instead, it collects data on browsing behavior of users on your site and others. Using that information, it’s able to identify a degree of “intent.”
For example, if multiple users from a company (usually identified by IP) are reading about how to reduce their corporate real estate footprint, it may flag that company as a strong prospect for a seller of space management technology.
That same data is also used for later follow up. For example, Demandbase notifies teams of activity by target accounts that suggest increased interest. As one user noted:
With the GA reporting alerts, email and SLACK alerts, our sales teams find Demandbase beneficial in identifying the account’s activity and helping prioritize sales tasks.
Jabmo has a useful visualization and walkthrough of the entire process.
Based on Forrester research, Jabmo’s offerings outpace its market share. Similar to Demandbase, it touts a start-to-finish platform to help find, target, and close accounts.
A breakdown of features shows the ABM challenges that software tries to resolve. It also offers a window into how these systems work:
Whether Jabmo’s system works better than Demandbase (or any other platform) depends on more than the system alone. Does Jabmo’s database of IPs cover more of your industry? Then it may be the better choice.
The inverse may also be true. As the Forrester report notes, “Jabmo is best for marketers targeting global industrial/manufacturing accounts.” That’s only one segment of the B2B market.
The importance of coverage is paramount. The ability to identify anonymous visitors impacts the value of every other feature.
The ROI you get from tightly targeted advertising also depends on your ad spend. You could save six figures if a current “shotgun” approach spends millions. A modest spend has less potential.
Even then, the value of those clicks depends on whether marketing materials or sales staff are persuasive. As one reviewer conceded, that’s a challenge that software can’t solve:
For us the ROI is still not totally found, as we are struggling with the sales channels who are not so enthusiastic about having to manage cold-to-cool leads, for a question of resources (again) and mentality.
MRP’s offering is a single platform, MRP Prelytics, that serves several marketing channels. MRP positions itself as an “account-based display advertising” solution rather than a complete platform.
Still, an account-based advertising platform ultimately touches every aspect of ABM software:
While Demandbase wins reviews for account targeting (“It provides the best [. . .] target account marketing in B2B segment,” wrote one user), MRP has tried to differentiate based on how it selects and delivers ad content.
That differentiation, according to MRP, hinges on “the right balance of both scale and control, using combinations of IP address, geo location, context (publishing site selection), 3rd party cookies, retargeting and more.”
Rather than claiming to have the best IP targeting, MRP argues that the combination of factors improves the selection of ad targets (and continually refines the ad content shown to those targets).
Does it actually work better? It’s a difficult claim for consumers to evaluate. As with other ABM platforms, the key components of ABM software are hidden from view:
Still, most ABM software is known for individual strengths or weaknesses. Below are brief overviews of other end-to-end solutions.
A talk by an Adobe representative about their experience with Lattice Engines offers a high-level overview of how predictive analytics can identify and qualify accounts and targets for ABM.
For Adobe, it solved an issue related to lead volume. They had too many leads to follow-up with, and their existing scoring system didn’t work.
Software’s role was to put the target company at the forefront of the scoring process. The aggregation of individual behavior at a company level was the critical innovation.
Lattice Engines is one of several other end-to-end entrants in the ABM software market.
6sense. 6sense contends that it illuminates the “dark funnel.” The ABM software scores activities by anonymous but identifiable users. Reading your blog post might put them in the top of the funnel; watching a video of how your platform works may move them farther down.
Like other platforms, 6sense then automates messaging (via integrations with Marketo and Eloqua) based on the perceived location of an account within the funnel.
Several users lauded 6sense’s ability to support true demand generation—collaboration between marketing and sales:
We’ve struggled to align sales and marketing to focus our efforts on the same companies and with 6sense, we’re all in agreement of which accounts are ready to be prospected.
The main problem we’ve been trying to solve is ensuring our sales and marketing teams are aligned on the status and next actions for key accounts.
Engagio. Several reviews of Engagio highlighted its simple interface and reporting capabilities—daily, weekly, or monthly. The reporting feature may be more important for companies under more pressure to show the benefits of an ABM strategy.
Terminus. Terminus pitches the product as an “all-in-one” solution. Still, it highlights its strength as an “account-based advertising” tool. The targeting capability is the first thing many reviews highlight:
Terminus has allowed us to get extremely personalized through our paid channels when it comes to ABM, allowing us to target not only key accounts/companies, but also specific departments within that.
Terminus also recently acquired BrightFunnel, a reporting tool.
Madison Logic. The company’s ActivateABM solution is, like 6sense, focused on ABM and has end-to-end features. Multiple reviews singled out the platform for its affordable price.
While it offers content syndication, reviewers noted that where that content ends up is not fully disclosed. For some, that poses a risk. Company content may end up on a site that doesn’t reflect brand values.
Beyond the end-to-end platforms, several tools support efforts to identify and evaluate accounts and leads.
Mintigo. Mintigo pitches itself as the only “full-stack, full-customer lifecycle AI solution.” Its sales enablement component stops short of automating messaging. It segments contacts based on perceived intent but still requires manual selection and delivery of tailored content.
Leadspace. More than other tools, Leadspace emphasizes sales team support. It helps B2B marketers maintain individual contact information. In short, it delivers the data but not the automation.
One user, for example, lauded its ability to identify when potential buyers moved to other companies (so that marketing and sales efforts could shift accordingly).
Others repeatedly mentioned its ability “to fix incomplete, inconsistent contact records that have accumulated in our database over years of form submissions and list uploads.”
Everstring. Everstring divides its solutions into three parts: for marketers, for sales, and for “advanced analytics.” For ABM, it calls out the ability to use closed-won data to create predictive models and identify target accounts.
Infer, purchased by Ignite in 2017, and Radius are two other options for account identification.
If the target accounts are already known, contact enrichment tools—Clearbit, LeadGenius, DiscoverOrg—all focus on that narrower scope of services.
Manually, it’s possible to uncover the type of content that an account or target may be interested in. What are employees from a target company talking about on LinkedIn or Twitter? What are they writing or speaking about in the industry? Software scales those insights.
Bombora. Bombora catalogs the content that target accounts consume. Then, it scores those habits based on topic and “intensity of that consumption.”
The resulting score helps marketers prioritize messaging. For example, based on intent data, who should be shown a “Schedule a Demo” ad or receive direct mail?
TechTarget. According to the Forrester Wave report, TechTarget enjoys one of the largest market shares among ABM tools.
TechTarget works by publishing reams of content across more than 140 owned websites. That content, in turn, earns organic visibility for hundreds of thousands of keywords. Visits to TechTarget-owned sites allow the company to place first-party cookies on targets’ browsers.
TechTarget uses those cookies to aggregate intent data from site visitors. TechTarget clients can then deliver messaging (e.g. display ads, native content) to those who show the highest intent.
End-to-end solutions like Demandbase and Jabmo offer web personalization as part of their product. Other products do solely that.
Personalization is more than changing a headline to match a company name. Triblio, an ABM platform that focuses on personalization, powers customized messaging throughout a site.
So, for example, the CTA for a first-time visitor can offer an initial platform walkthrough, while a returning visitor (or a visitor from a subset of flagged accounts) may see a call-to-action to compare a product with competitors.
Other personalization-only tools like VWO or Optimizely offer personalized web experiences but don’t have accompanying account or target data. Gartner’s Magic Quadrant for personalization engines details dozens of options:
Personalization extends to content, too. Uberflip and PathFactory, for example, offer tailored content “streams” as well as customized ad messaging:
Idomoo and SundaySky personalize videos as well. There are several use cases:
As Watt contends, ABM focuses on macro-conversions (i.e. closed sales) rather than micro-conversions (i.e. whitepaper downloads). That’s because ABM campaigns often blanket target accounts with messaging. Not every ad will get clicked, but it may still play a role in winning the account.
End-to-end ABM tools build reporting into their platform. For stand-alone reporting, Bizible and Full Circle Insights both target complex B2B needs. They help answer the question, “Which marketing campaigns actually drive sales?”
As Bonnie Crater, Full Circle Insights’ CEO, explained in an interview:
The primary challenge our customers have is that they need to understand how marketing campaigns are affecting revenue but their Marketing Automation Platform (MAP) never matches what’s inside Salesforce.
Marketo purchased Bizible in 2018, in part to counter the tight integration between Full Circle Insights and Salesforce. For companies already using Marketo (or other Adobe products), integrations with Bizible may be easier or cheaper.
Almost every ABM tool review was glowingly positive. It makes sense. ABM software isn’t just another way to do something that most companies are already doing. The end-to-end solutions are a significant upgrade. Even when they’re imperfect, they’re still better than the previous setup.
Those dedicated solutions exist alongside dozens of other tools that help identify accounts, manage contacts, and personalize content delivery.
A lingering challenge for all tools, however, is the required buy-in. It takes time to integrate data across platforms, identify new accounts, target them with messaging—and wait for a months-long sales cycle to prove ROI.
So which tool is right? It comes down to your budget and the most urgent need for your ABM campaign:
Throughout the years, generations have led major shifts and changes in how entrepreneurs and business-people alike advertise, market and convert leads. Before Baby Boomers, people born between 1944 – 1961, and even as Baby Boomers entered the workforce, the most common way for a lead to reach B2B sales reps was by phone and in-person visits, since computers were not around yet.
When Generation X-ers, people born between 1961 – 1981 entered the workforce, it became more common place to use email on top of phone calls to reach customers and prospects.
As younger, more technologically savvy generations filter into the workforce, already the sales experience has begun to shift. Millennials, people born between 1981 – 2001, are a part of the first generation that have access to the internet to research products and services they are interested in. Because of that, younger buyers are reaching out to sales reps later in the B2B sales cycle.
For starters, consider the following stats:
Millennials are not only entering the workforce at a faster rate, but entering companies that are including them in buying decision process.
Even if you’re not currently engaging with younger generations in your sales conversations, you will be in the very near future.
If you find your company struggling to close deals with younger clientele it is a good time to re-evaluate how your business and branding is actively working to connect with them.
Consider the following business characteristics to better market to younger generations:
“Feel good” branding
Younger generations like “feel good brands,” or brands that actively work for the community they serve. This shows up when attending industry events, volunteer opportunities or even relevant recreational events where your company may be sponsoring or taking part.
Beyond your brand
Take your brand beyond your company website, products and services. Your brand should embody your company personality, feel and experience any time a prospect or client interacts with you. Your company personality reflects what it will be like to work with you from a client perspective.
The experience
Something that many B2C and B2B organizations are failing to adapt to is that younger generations want a whole experience when they are shopping or browsing your products or services. Since B2B businesses do not have the store-front experience you need to create a sales experience that exceeds expectations. Here are a few areas to focus on:
How can you go above and beyond when you have someone in for a prospect interview or proposal?
Local love
Younger generations are more inclined to shop locally, and particularly when they are looking for an agency to help them with start-up initiatives. Consider incorporating geo-specific ads or promotions that will target local businesses in your industry.
Understand their needs
B2B buyers do not want to feel like they’re immediately being sold to, especially if they haven’t asked to be. Focus on understanding their pain points and how your company’s solution can help them address these issues. Use phrases like, “what I understand you need is this, and this is how we can provide the solution(s) to your problem. This is what we will do for you.”
Regardless of the fact that you are handling a business-to-business sale, it is individual people within your audience that notice your efforts and make the decision to buy or partner with your organization. Nearly 45% of company research starts with social media so this is an opportune way to display company personality and industry awareness and knowledge.
Social media can be a free advertising outlet for your business so use it to its fullest potential! Check out our guide on how you can measure your social media marketing ROI.
Younger generations have grown up using the internet for research projects, schoolwork and even extracurricular activities or hobbies. They don’t feel the need to reach out to a sales person because they have already done a considerable amount of research on their own before making a buying commitment.
How to develop your sales process or pitch to get the attention of younger generations:
Companies that are able to evolve with the changing technology and social transformations are ones that survive and thrive through the times. As marketing and sales professionals, we know how important it is to create a relationship with your prospects and clients. Using these tips can help you to further develop and tailor your sales process for the different generations you interact with.
The customer voice, also known as Voice of the Customer (VoC), is at the core of any successful customer experience (CX) program. It refers to the customers’ needs, wants, and expectations as it pertains to a company’s products or services.
A customer voice program focuses on capturing the expectations, likes, and dislikes of your customers. You do this by gathering and analyzing customer insights and identifying trends and strategies to improve customer experience. In essence, a customer voice program gives your customers a voice within your organization.
Why customer voice is important
Even though most organizations would agree that they’re customer-centric, only a few are actually delivering experiences that align with the customer voice. According to a study conducted by Bain and Company, while 80% of companies say they’re customer-centric, only 8% of customers agree.
This becomes even more problematic when you consider that poor customer experience is costing U.S. companies $136.8 billion per year due to avoidable churn.
The best way to improve the customer experience at your organization is to listen and act on what your customers are telling you, i.e, the customer voice. Companies that make customer voice (and by default CX initiatives) a priority are more likely to surpass those that don’t.
In fact, according to the Gartner group, great customer experience is a major competitive advantage—with more than two-thirds of marketers saying their companies compete mostly on the basis of CX. And in two years time, 81% say they expect to be competing mostly or completely on the basis of CX.
A VoC program reveals what your company is doing well and where you’re lagging behind. It can also act as a compass that guides you on the right track.
Organizations that pay attention to the customer voice have better customer experiences and the benefits of those are countless. Here’s some:
Essentially, making VoC a priority leads to higher retention rates, an increase in revenue, and reduced churn.
How to know if you’ve lost touch with the customer voice
As the Bain and Company study suggests, most companies don’t know that they’re delivering bad customer experiences until it’s too late.
Here are some warning signs that show your customers are unsatisfied with your brand:
The only way to know what your customers want is to pay attention to what they’re saying. Let’s go over how you can do that.
How to collect customer voice insight
When it comes to collecting VoC data there are generally three categories feedback falls into:
Customer listening technology and CRM solutions like Salesforce can help you capture and analyze customer feedback during company-wide CX initiatives.
How to use the customer voice
There’s more to Voice of the Customer than simply distributing surveys and collecting responses.
To be a customer-centric organization you have to consider feedback from every customer, respond as quickly as possible and use the insights uncovered to make improvements across departments.
For example:
Product development: Product teams can use VoC insights to prioritize feature request and reduce friction points associated with using a product.
Marketing: Can use customer voice to create better-targeted campaigns that highlight value propositions customers actually care about based on data rather than intuition.
Sales: Sales reps can use the data acquired through VoC programs to identify ideal customers and the selling points that appeal to them the most.
Customer support: VoC empowers support teams by highlighting touchpoints customers have the most trouble with as well as identifying dissatisfied customers so that they can be assisted.
The insights you get from customer voice programmes have to be shared across all departments.
Here’s an example of a Voice of the Customer (VoC) internal communications plan from our team. You’ll see below that even though most VoC insights will come from customer-facing departments like support, sales, and marketing, delivering great CX is a company-wide initiative and it can’t work without support from C-Suite.
Wrap-up on customer voice
Improving customer experience isn’t a project you launch once and forget about it. Rather, you should think about it as a new way of doing business in which you put the custom voice first—customer values do change and you need to keep up with it.
Salespeople, how tired are you of hearing "coffee's for closers"? If your answer is "very," I've got to apologize now because I'm about to get a little Glengarry Glen Ross on you.
This 1992 classic has become a rite of passage for every salesperson. In the film, Alec Baldwin's straight-talking sales manager arrives at a small business to motivate the sales team. The top two salespeople at the end of the week will be given access to promising Glengarry leads while the others will be fired.
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For sales managers, Glengarry Glen Ross is a cautionary tale. Motivating your sales team isn't about taking the coffee from their lips, it's about setting realistic quotas tailored to each rep, the type of product or service they're selling, and the market they're selling to.
So, how do you avoid driving your reps to stage a burglary to steal the best leads? Here's everything you need to know about setting successful sales quotas.
Are sales quotas and sales goals the same thing? Not quite. Sales quotas are often part of a series of actions set to help salespeople achieve a certain goal.
For example, if a company sets a goal to increase revenue by 25% in 2021, the sales leadership would identify how many sales they need to close in 2021 to meet that revenue goal.
Then, they would calculate how many deals their salespeople need to close per quarter to contribute to that goal. The financial value of those deals would be the salesperson’s quota.
A salesperson’s quota is often directly tied to their compensation plan, including commission and bonuses.
Another sales metric that gets mistaken for the sales quota is the sales target. Sales targets differ from sales quotas in that targets are usually defined for a team rather than an individual. Sales targets outline how many products or service packages your team needs to sell to reach revenue goals for a specific period of time. Sales targets help salespeople break down their sales goals and sales quotas into attainable parts.
Once sales quotas are set and sales goals and targets are accounted for, sales reps receive a sales quota agreement outlining each of these items. The purpose of a sales quota agreement is to provide transparency about what is required to meet quota and how that quota will be calculated throughout the selling period. Sales quota agreements keep salespeople accountable for hitting goals and keep managers accountable for rewarding performance accurately.
There are many ways to measure quota. Smaller companies selling a single product with a static price often set quotas around how many units (i.e., 28 pairs of skates) a salesperson must sell every month.
Larger companies selling multi-tiered products or services might have a more nuanced quota structure where a salesperson is held to the overall value of the deals they need to close (i.e., $4,500/month).
But quota structure doesn't end there. Here are the five most common types of quotas and examples of each one.
An activity quota requires salespeople — usually BDRs or SDRs — to complete a set number of activities during a period of time, usually one month or quarter. Activities usually include phone calls, follow-up emails, scheduling meetings, and leading demos.
This type of quota is usually assigned to BDRs or SDRs who are part of a larger selling team and aren’t responsible for closing actual business. An activity quota ensures they’re contributing to the sales organization and providing valuable help to the reps they support.
Sales rep Jonathan has a quota of 45 phone calls per month, 84 follow-up emails, and 12 demos each month. These activities are tracked in his CRM and his sales manager can easily see how he's tracking to meet his quota.
Sales reps with volume-based quotas are goaled on the number of units they sell or the total revenue they generate during a specific time period. They're incentivized to sell as many units as they can.
Jonathan, with JVN Skates, has a quota to sell 75 pairs of skates each month. He must sell at least 75 pairs to meet his quota. He likely receives a commission on each pair of skates he sells and receives a bonus when he reaches his quota.
This type of quota is based on the gross profit or margin of a dedicated sales team, product/service grouping, or salesperson.
If you’re held to a gross margin quota, your number would be calculated by subtracting the cost of goods you sell from the overall revenue. A gross profit quota is calculated by subtracting selling expenses and the cost of goods sold from the final revenue number.
Jonathan sells skates to professional skaters. He sells fewer skates at a higher cost than his sales colleague Antoni, who sells a larger volume of cheaper skates to recreational skating rinks. Jonathan and Antoni would both have profit quotas of different amounts.
Some salespeople may have more than one quota. A combination quota might include an activity quota and a profit quota. A combination strategy gives reps a roadmap to success and provides smaller milestones to make their quota more easily attainable.
Jonathan's quota includes several activity quotas and a profit quota. He must make 50 calls every month, lead 15 skate demos, and close $2,500 worth of business adjusted for selling expenses and the cost of the skates.
Forecast quotas are generally assigned to specific sales territories or teams. A forecast quota is calculated based on the historical performance of a region and the revenue goal it must hit.
Let's say Jonathan is the pacific northwest territory rep for JVN Skates and traditionally closes $7,500 in sales during Q4. If his goal is to increase Q4 revenue by 25% this year, his quota would be $9,400 for the quarter.
If Bobby, the rep who's responsible for the southwest sales region, historically closes approximately $4,500 in Q4 revenue, he might have an adjusted quota based on his unique market.
A simple way to set sales quotas is to use revenue as the goal. That means each salesperson will be responsible for bringing in a specific amount of revenue each month or quarter. While this is a pretty simple sales quota, you can customize this to fit the needs of your business and your sales team. For example, you could incentive reps to sell certain products by breaking the larger revenue quota down into smaller sections.
Jonathan is responsible for meeting a revenue sales quota of $2,500 per month. Based on historical data, he knows that he needs to sell about 75 $33 skates to meet quota. However, if his sales manager breaks the revenue goal down by product, Jonathan can have more flexibility by selling fewer, more expensive skates or targeting low-hanging fruit by selling a larger number of less expensive ones.
A common rule of thumb is that 80% of your sales team should be able to meet their quota most of the time. If that’s not the case, consider that your sales quota might not be realistic, To fix this, recalculate it based on more attainable goals. Here’s a step-by-step guide for setting a realistic sales quota for your team.
A baseline is your sales organization’s minimum standard of performance. It’s important to establish a realistic baseline to understand how much business your sales team needs to close to meet the basic needs of your business.
To establish a baseline, look at the revenue your sales team closed over the last 12 months. Divide that number by 12 to understand exactly how much revenue your team must bring in every month.
From there, adjust that number to account for territories, reps, time off, and seasonal fluctuations. If your east coast territory has less market opportunity than your west coast territory, sales managers should adjust each team’s baseline quota accordingly. Your baseline quota will likely be different per quarter as a result.
If Q4 brings seasonal highs for a company, rep baseline quotas in Q4 would likely be higher than those in the Q2 late spring/early summer season when skate orders are down.
Finally, account for forecasted growth. While you never want to set unrealistic sales quotas, it’s important to ensure they’re growing with your business. If your executive team forecasts 15% growth in Q3, adjust quotas accordingly.
Top-down quota setting is when sales leaders set quotas based on growth goals over their salespeople’s abilities.
The danger with a top-down approach to quotas is it gives less weight to a sales team’s historic data and proven abilities. It's almost entirely driven by where the company board or executive team would like to be and less by realistic and healthy expectations of the sales team.
A top-down approach starts with a quota and works its way down to the activities necessary to achieve that number.
Ideally, sales teams should take a bottom-up approach to setting quotas. Sales managers can start by looking at historic data showing what their reps are capable of generating and calculate a quota based on those results.
Pro Tip: If your business needs to take a top-down approach because it's a start-up or you're coming back from an atypical year, you can consider expanding the headcount or skillset of your sales team to achieve those revenue goals. Just remember to set part of your budget aside for this and plan accordingly.
Once you’ve calculated a baseline quota and adjusted it for seasonality, rep ability, and growth goals, it's time to set activity goals.
While you may or may not tie activities to a formal quota of their own, it’s helpful for reps to have a roadmap showing them approximately how many calls, emails, and demos they need to conduct to meet their quota.
Platforms like HubSpot Sales Hub allow sales managers to track sales activities and performance so you can easily see which reps are your top performers and what activities they’re doing to close business.
Your sales quota should take into account a rep’s base salary, the average number of leads available, number of target activities (i.e., 15 calls/day and 20 follow-up emails/day), target incentive pay, target total compensation, and any extra bonuses available.
Your sales quota should be unique to your business, and it should evolve with your market and business goals. Download our sales plan template to help you set goals, calculate quotas, define an action plan, and more.
Yesware has calculators for top-down and bottom-up quota setting. Once you input the required data, Yesware will give you a sales quota number.
This calculator is best for giving reps an idea of what their quota should be. It takes a broader approach by including your annual revenue target, average monthly visitors/leads, monthly conversion/close rate, average deal size, and monthly growth goals.
You’ll likely want to do some tweaking for seasonality, territory and market opportunity, and rep ability.
Setting profit-based quotas? This calculator is for you. Enter your average monthly or quarterly sales, profits, variable costs, and fixed costs, to calculate your quota or goal amount.
Many things can work against your ability to set a realistic sales quota — and your rep's ability to meet it.
If you set your quota without considering seasonality or historical rep performance, you're setting your team up for failure.
Similarly, don't adjust quota based on an unexpected renewal or larger than average deal. Raising rep quotas because of a great month can demoralize high-performing reps and stall growth.
Before raising quotas, make sure you have at least three months of data to support the decision — and that it's not just coming from one rep and their specific territory.
If you have one rep or territory consistently beating their number, identify what their success is due to and consider adjusting their quota instead of changing everyone else's.
The fastest way to see your sales team burn out is by setting unrealistic quotas. As a sales manager, it's your job to know your team's limits and make that argument to your executives when they push for a more top-down approach to quotas.
The average tenure of SDRs has seen a 50% decline from an average of 2.5 years in 2010 to 1.5 years in 2018. Sales is already a volatile profession. Retain top-tier employees by ensuring their quotas are realistic and they have the support to meet and exceed their goals regularly.
Commission caps limit the amount of commission a salesperson can earn. When a rep has hit their commission cap, they are no longer financially rewarded for closing more business. This de-incentivizes reps to push the limits and close more business.
SaaStr founder and sales pro Jason Lemkin says there's no good reason to cap commission, "At least, not until you are at $20-$30 million ARR or more, and maybe much higher."
He continues, "If you cap this too early, you are limiting your revenue per lead."
In the final scene of Glengarry Glen Ross, the salespeople scatter and face the various consequences of their actions from the previous night. But one salesperson heads back to the office. Why? To make his usual sales calls.
At the end of the day, salespeople have the same goal: to move deals forward and close business that will benefit the customer and the salesperson. Stay focused on setting realistic sales quotas and tune out the rest of the noise for your team.
Editor's note: This post was originally published in March 2019 and has been updated for comprehensiveness.
The post How to Get Moving Again When You Feel Stuck appeared first on ProBlogger.
This post is based on episode 158 of the ProBlogger podcast.
Do you ever feel stuck in your blogging or your business?
I think many of us can relate to feeling paralysed at times – not just with blogging or business, but in other areas of life as well.
You might feel stuck and unable to move forward because:
I can certainly relate to a lot of things on that list. I can get stuck when I have so many ideas that I can’t decide what to do first. Fear is also a big one for me. I worry what other people will think of me, how I’ll sound, how I’ll come across, what might happen if I make a mistake, and so on.
Perfectionism is a struggle for me. I imagine what I want to accomplish, and create the perfect picture of it in my mind. But then taking action seems risky, because whatever I do will never measure up to the way I imagined it. And so I’m tempted to do nothing at all.
But whatever the reason, being stuck will hold you back in any kind of business – especially in the online world where you need to keep active and keep moving.
‘Imperfect action’ is always better than ‘perfect inaction’.
In fact, imperfect action is really the only kind there is. No-one ever takes perfect action.
Imperfect action gets things done. It’s what separates the dreamers from those who accomplish great things.
Here are some of the key benefits.
When you take one small, imperfect action, the next steps often reveal themselves.
As I mentioned earlier, some people don’t take action because they can’t see the big picture. But you may never see that big picture until you start taking steps forward.
I sometimes find that taking that first step towards a fuzzy goal makes it clearer for me. And starting to move gives me the energy to carry on.
I love this quote from Dale Carnegie:
Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.
Taking one small action can help give you the confidence to take the next, slightly bigger action. Keep moving a little bit further outside your comfort zone, and your comfort zone will expand.
Do you feel you don’t have the skills to tackle what lies ahead? Take imperfect action, and you’ll learn a lot – fast.
The day I started my first blog was probably the day I learned the most about blogging – ever. I learned so many new skills, and understood so much more than the day before.
As well as learning new skills, you’ll learn so much about yourself by taking action. Stepping out of your comfort zone will help you think about who you are and how you react in these situations.
For me, starting my blog helped me develop my ideas, and discover passions I wouldn’t have otherwise known I had.
This is something I think a lot of bloggers, podcasters and online entrepreneurs should understand. We’re often tempted to make our posts, products and sales materials perfect. But if we make things too perfect they’re not as relatable because they’ve lost some of their ‘humanness’.
I’m not saying you shouldn’t aim for excellence. (For instance, your posts should always be edited well.) But don’t feel you need to eliminate every imperfection. Humanness, vulnerability and imperfection help others relate to us and feel a connection.
Today, I encourage you take your next best step. You don’t necessarily need to reach your destination. You just need to take the next best step that will move you towards it.
But what if you don’t think taking your next step will be enough to help you regain your momentum? That happened to me at one point with ProBlogger, when I realised I’d been putting off several different tasks. They were on my ‘someday’ list, but never quite made it to my ‘today’ list.
To get moving again, I set aside an entire week to get things done. I came up with a list of ten things I needed to do – things I’d been avoiding – that I could achieve in a week. Each one took half a day or less.
I also turned off a lot of the input in my life. No blog posts, no podcasts, no social media, no Netflix, and very limited email. I stopped consuming for a week, and started creating instead.
It turned out to be a really great week.
Putting that week aside and creating those boundaries meant I not only got a lot done, but also got my momentum back. And the following week was really productive too because I was in ‘creating’ mode.
Could you take one ‘next best step’ towards your goals today? Could you look ahead in your calendar and block out a week to really focus on moving forward and building your momentum? Let us know what you’ll be doing in the comments.
Image credit: Erda Estremera
The post How to Get Moving Again When You Feel Stuck appeared first on ProBlogger.
It’s falsely comforting to think of selling as a process in which one step follows logically after another. But although rigidly defined processes might be the best way of running a manufacturing production line, they completely fail to reflect the reality of any moderately complicated sales environment.
It would be convenient if things were simpler. But the truth of the matter is that in complex B2B sales your customer’s buying processes are rarely linear, compounded by the fact that they are sometimes poorly defined or even if they are well defined are often not well understood by many of your customer's decision team.
As Gartner have identified, rather following a perfectly straight path, complex customer decision journeys typically zig and zag, go backwards as well as forwards, find themselves way off-piste, struggle to achieve consensus, can be redirected on the whim of a single powerful individual or can be abandoned at any stage along the way.
There is no magic wand, but there are a few things your sales people can do. The first is to accept that for any significant purchases, your customer’s decision-making journeys are inherently complex. The second is to accept that you will probably never achieve anything close to perfect knowledge.
But you can do your best to avoid being blind-sided by factors that you ought to be able to predict are likely to come into play. Rather than blindly following a rigid, linear “sales process”, your sales people firstly need to diagnose where their customer is in their decision journey and adapt their strategies accordingly.
As you’ve undoubtedly learned, this can change at any time and without notice. Some members of the customer's decision group may be ahead of the curve, and some behind. It’s particularly important that your sales people aren’t deceived by an over-enthusiastic champion into thinking that the group as a whole are further advanced than they really are.
That having been said, at any given point in time the centre of gravity of your prospective customer’s decision journey is likely to be in one of the following phases:
While in this phase your customer is - by and large - currently unconcerned about any of the issues you might have chosen to target and is not yet engaged in any form of active buying decision journey. However, they are still likely to be monitoring key trends that they see as relevant to their industry, organisation or role.
Your role in this phase of their journey is to educate and inform the key influencers in your key target customers by offering genuine thought leadership and insights that serve to shape their perspectives and influence their thinking.
Something - usually the result of a powerful disruptive force or a significant trigger event - has disturbed the status quo and drawn your customer’s attention to a potentially significant challenge, opportunity or threat. They are now trying to establish the likely impact of the issue, what remedies might be available, and whether there might be a business reason to act.
Your role in this phase of their journey is to monitor these disruptive forces and trigger events, to articulate a distinctive point of view, to be seen as a source of accessible and credible expertise, and to proactively reach out to the affected people and organisations.
Having identified the challenge, and having concluded that the issue is worth investigating in greater detail, your prospective customer will typically now engage with other members of their organisation, research trusted sources of information, and try and establish what credible solutions might be available - drawing up a list of potential options.
Your role in this phase of their journey is to encourage your prospective customer to consume your thought leadership content, to position yourself as a credible option, to leave them wanting to know more, and to persuade them to engage with you sooner rather than later.
Having concluded that credible solutions are available, your prospective customer now turns their attention to shortlisting their most promising options, establishing their vision of a solution and defining their decision criteria, decision team and timeframe.
This is perhaps the pivotal phase of their entire journey. According to Forrester, the vendor that does the most to shape the customer's vision goes on to win their business nearly three times out of four.
It is critically important that you actively engage the customer before or during this phase - prior to their issuing a formal tender or RFP document - after which it is often too late to reshape the customer’s thinking. If you do this effectively, you will dramatically increase our chances of winning their business.
The customer is now evaluating the pros-and-cons of their shortlisted options, further refining the business case and seeking to identify their preferred option - which if the business case is not strong enough and if the stakeholders fail to achieve consensus is likely to be a decision to “do nothing”.
In addition to promoting the merits of your proposed solution and establishing the business case, your role during this pivotal phase is to ensure that all stakeholders see the distinct advantages of your approach from their individual perspectives.
The customer's attention now turns to verifying and finalising their selection, negotiating the best possible terms, eliminating any remaining reservations and securing the support of their colleagues for the project. Even though you might have been selected, you are by no means guaranteed the customer’s business.
This is not just about securing the best deal - it is also about diagnosing and dealing with any and all perceived risks or concerns that are associated with either the project itself, the chosen vendor and the chosen solution.
The project and its associated business justification is now being submitted to the ultimate decision authority for final approval - and often finds itself competing for funding and senior management attention against other investment opportunities.
You may have eliminated all your other competitors as far as this project is concerned - but you also need to make sure that your project’s business case and executive sponsorship is strong enough for it to emerge at the top of the customer’s list of spending priorities. If you fail to pay due attention to this, there's a significant risk that the project will fall at this final hurdle.
These descriptions are admittedly somewhat idealised. It is entirely possible that some projects rush through or skip some of these phases altogether. As we’ve already identified, the journey can stall, go into reverse or go forwards. But when key phases are not completed to at least a minimum level - for example, clearly defining their requirements, decision criteria and process - it is far more likely that the customer's decision journey will subsequently fail.
You can’t hope to know where your customer is on their journey unless you observe their behaviour closely for the relevant indicators. And you can’t assume that their next step will be forwards. But you can facilitate that movement by eliminating anything which is under your control or influence that could otherwise hold them back.
This article was originally published on LinkedIn.
Bob Apollo is a Fellow of the Association of Professional Sales, a member of the Sales Enablement Society, a regular contributor to the International Journal of Sales Transformation and the Sales Experts Channel and the founder of Inflexion-Point Strategy Partners, the leading UK-based B2B value-selling experts.
Following a successful corporate career spanning start-ups, scale-ups and market leaders, Bob is now relishing his role as a pro-active advisor, coach and trainer to high-potential B2B-focused sales organisations, systematically enabling them to transform their sales effectiveness by adopting the proven principles of value-based selling.
In recent work, we have found that when you deliver value is as important as how you deliver value. The when becomes a critical input into designing your pricing model. Working with a large B2B SaaS company that has a long implementation and configuration cycle, we uncovered contradictions between their pricing and how the customer was getting value. Basically, this led to internal tensions between sales, finance, the implementation team and customer success.
This company manages time to capture implementation costs (how many months will it take until revenue collected exceeds investment in implementation), with a target to capture these within four months. It is a good idea to track these formally. They are as important as your customer acquisition costs (CAC).
In the above figure, Vendor Position is Revenue less Vendor Investment, Customer Position is Value less Customer investment. The calculation of Customer Value is an important area that deserves a lot more discussion.
There a several ways the company can resolve these tensions. Perhaps the best is to redesign the solution and implementation procedures in order to start providing value to the customer earlier. One generally learns a lot about a company when implementing a major SaaS solution. Can these insights be turned into something the customer will value? Time to value should be a key design metric. More generally, the pricing model may need to be rethought to better align revenue capture with value to the customer (V2C).
This work led us to start asking about the different ways in which V2C is distributed over time and how this could impact pricing model design. Looking at our own work, and doing a scan of some common SaaS business models, we found a number of different patterns.
The simplest case is where the value to customer grows linearly over time. In reality, we think this is rare, but a lot of pricing models assume this.
More common is the standard S curve in which it takes for the value engine to kick in, but once it does, value builds quickly, only to reach a plateau. This is the most common B2B SaaS model and is typical of everything from market automation to HR applications.
The challenge here is that humans are more attentive to change than steady state and tend to be future looking. ‘What will you do for me next?’ Under this pattern, value perception (how much value the customer believes you are delivering) can decline rapidly making renewals more difficult.
The inverse of this, sometimes referred to as a Z curve, can also happen. This is most common when software is adopted to address an urgent need, but once the problem is addressed it goes away.
In this case, a subscription model may be your enemy. Rather than looking for a long-term subscription, consider bundling the software into a consulting offering, with a long-tail to gather the information that will feed future engagements. This is the model, we currently use at Ibbaka, as our work is very much around understanding market structure and then designing a pricing model that fits the market.
In some cases, value to customer is periodic. The periodicity can be seasonal or driven by industry cycles.
Pricing offers that have periodic value delivery can be tricky. The first thing to do here is to get a deep understanding of what drives the value cycles. Ideally, you want to time renewals as the customer is climbing the value curve. You may also want to consider models that use surge pricing of some form. Well-timed communication with the customer and close monitoring of external factors that drive value are critical to successfully managing this pattern.
Pulling this together, one can map value distribution patterns to pricing models as follows.
When looking at the distribution of value to customer over time, ask yourself the following questions.
Interested in pricing issues? You can take this survey on Value Innovation and Pricing Insights from CEOs.
The post Value Delivery Patterns Shape Your Pricing Choices appeared first on OpenView Labs.
Lalmch / Pixabay
What is your company worth? It’s important to know your business valuation.
If you’ve put any thought into life after running your current business, you’ve likely given this question some consideration. But the real question is this: Is your own estimate accurate?
More than likely, it isn’t. Sure, no one knows your business better than you do. That doesn’t mean you understand the ins and outs of determining what someone else would pay for it. The factors that can influence a company’s value in the marketplace — whether making an initial public offering (IPO) or not — are far too numerous for an owner to see from deep within the weeds of running day-to-day operations.
In my experience as a Certified Valuation Analyst (CVA), overly high expectations are incredibly common. Some owners see a few changes that could send profits soaring. Theses are things a new, well-capitalized owner could easily fix. Yet, they inflate the value of their companies. Unfortunately, this isn’t how the market works.
True value is much harder to pinpoint. It is sometimes far less entwined with immediate profit potential than you might think. In 2017, for example, 76 percent of companies that listed for an IPO were unprofitable the year prior to going public. In the end, it comes down to the financial or strategic value in the eyes of the investors. This is something that’s not easily discerned by the owner alone.
Clients who seek out my company for valuations are often shocked — both positively and negatively — by what they learn during the process. Just recently, I surprised a client because my assessment was nearly double what he was expecting to take home in a sale.
His assumption, like many others, was based on a simple review of earnings before interest, taxes, depreciation, and amortization (EBITDA). This equation is certainly valuable in a sale. It represents a basic assessment of a company’s free cash flow before certain expenses and financing activities that might not hold true under new ownership. However, it’s not the only factor.
Before we valued his business, he assumed that his low EBITDA wouldn’t result in much profit from a sale. He said he might as well close up shop and scrape up what money he could from his inventory and receivables. Little did he know that he’d be looking at a value based on EBITDA on top of keeping his cash, collecting accounts receivable, and getting paid for his inventory. Those additional pieces added $25 million to the $26 million value I had already assigned to his business alone.
All of that goes to show how critical an accurate valuation is for a potential seller. That owner is in a much better position than he would have been based on his own valuation.
Others have an even more pressing need for a clear picture. Many of our clients are nearing retirement and counting on the sale of their businesses to make those retirement plans possible. Whether they over- or underestimate the value of their businesses, the end result for their latter-day adventures could be vastly different from what they expect.
These two examples by no means represent the only instances when it’s important to seek a professional valuation. Many owners don’t have a clear picture of their businesses’ operating capital needs and how they might impact what buyers will pay. And others are selling in a market with little or no comparable sales.
In these and countless other scenarios, you need a professional appraisal from a CVA who’s backed by credentials from a nationally recognized association, such as the American Institute of Certified Public Accountants or the National Association of Certified Valuation Analysts. These credentials signify extensive training and standards and provide legal backing for the value your appraiser ascribes to your business.
Beyond seeking out credentials, you should find someone you can trust to assess all the nitty-gritty details of your business. Don’t neglect to ask around in your network and do your research because this is going to be someone you work with closely for up to a month.
Ultimately, the task of a CVA is not simply to arrive at some hard number for the cost of your business; instead, it’s to determine your business’s fair market value.
The IRS Revenue Ruling 59-60 defines fair market value as “the price at which the property would change hands between a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.”
The determination of that price can come from one or all of three approaches: the income approach, the asset approach, and the market approach. The approach your analyst uses will depend largely on the health of your cash flow.
In the income approach, a healthy cash flow — either historical or forecasted — is used to determine value. This involves analyzing an organization’s various income streams, determining which of them hold real value in a sale, and arriving at a potential return on investment for a buyer.
With clarity about cash flow, a buyer can see just how long it will take to reap that return and judge worth accordingly. Your analyst’s job is to determine this on behalf of many potential buyers. This is a frequently used approach because it provides a straightforward value assessment in the case of a robust cash flow.
The asset approach is most often used when a company is losing money or already closed down. In this case, the analyst will figure out a total value of all tangible (and possibly some intangible) assets and determine his or her valuation accordingly.
The market approach involves a similar process to that of a home appraisal. In this framework, your analyst uses the trading multiples of comparable companies to determine the multiples of your business. Two homes with three bedrooms and a single bath on the same street are probably worth a similar price. So it often goes in a business sale.
However, just as there are a number of unique factors in every home sale — including differing neighborhoods, school districts, and home conditions — there are qualifying factors that limit the effectiveness of this approach when it comes to businesses. It’s best used as a sanity check after first arriving at a number by employing other approaches.
Altogether, determining fair market value is a delicate balance of art and science. To achieve that balance, you need a credible, trained expert who can provide professional judgment and help you navigate any complications that might arise.
We can dig even deeper into the art and science to find a whole host of other factors that impact the value and the prospect of a sale. These additional considerations are often blind spots for the would-be seller.
For example, can you place a dollar value on your company’s dependence on you as the owner? What would it cost for a new owner to pay someone else to do your job? If you pay yourself $150,000 for a job that would probably fetch $300,000 on the market, that’s going to hurt your sale prospects. Flip those numbers, though, and you’re adding cash to the final valuation.
Your contributions aren’t the only ones to consider, though. Do you depend heavily on any specific employees? Your potential buyer will be wondering what happens if that employee leaves in the event of a sale. Similarly, if you rely heavily on one specific vendor, your buyer might be concerned about the impact on your business if that vendor raises prices or folds.
Other expenses and cash flow influences will play a role as well. Your current rent, your overall operating capital needs, and even your terms on receivables might be working for you as it stands. A new owner, however, might feel differently.
Also, keep in mind that the value of assets doesn’t define the value of a company — the cash flow does. For example, I worked with a client who bought expensive assets (over-the-road trucks) and took on more debt. He thought the price of the company would go up because of the value of the new equipment. But that equipment didn’t add cash flow to the company — it replaced existing equipment — so the value of the company stayed the same.
Intangible elements can have an unexpected impact, too. How diverse is your customer list? I once worked with a trucking company that had one customer. That’s right, one. If that customer leaves, that company’s income vanishes overnight. Would you buy a business with that much risk? Most companies have more than one customer, but many still depend heavily on just a few for the bulk of their revenue. If you’re looking to sell, diversifying that list will make you much more attractive to buyers.
Considering such a wide range of influences can make your head spin. But it’s the valuation analyst’s job to sift through all of this information and normalize your business’s income statement.
You can expect your CVA to spend a good deal of time reviewing your financial reports, as well as examining your management team, trends in the market, and more. It’s a time-consuming process, but it’s well worth the investment.
When you finally come away with your valuation, you have the power to make more informed decisions. But that data isn’t only beneficial for owners who are on the verge of a sale. Whether you’re looking to sell in one year or 10 — or are just vaguely curious — a thorough valuation is an important tool for assessing the long-term prospects of your business.
There are a few steps you can take to make the most of your valuation:
Your plan for your business shouldn’t be separate from your broader financial plan for your life.
While 78 percent of Americans feel “extremely” or “somewhat” concerned about the amount of money they’ll have at retirement, many people have successfully turned to entrepreneurship late in their careers as a way to strengthen their financial future. The proportion of flourishing entrepreneurs between 55 and 64 increased from 15 percent to 24 percent from 1997 to 2016. For many in that group, the value of their companies is a critical component of their overarching financial security.
Some of these business owners are planning to sell their business to a key employee or family member. Knowing the worth of the business now will enable these owners to work with those buyers to ensure they have the necessary funds when the time comes to pass on the business.
If you make a profit on the sale of your business, a big tax bill is probably coming. Always factor this into your final numbers when you’re considering a sale.
When you sell a business, the IRS treats it like a sale of assets and will levy capital gains taxes according to how long you held those assets. In 2018, taxes on short-term assets ran as high as 37 percent, while long-term assets capped at 20 percent.
If you’re aware of the potential tax implications, you can clearly weigh your options. Do you hold on to the business longer to get those long-term rates? Or would it be better for you to maintain ownership and a salary but let someone else run the company? The tax bill is a reality that you can’t avoid if you choose to sell, so be sure the sale will make sense after the tax man comes knocking.
At the end of the valuation process, you should expect a thorough, clear report from your analyst. You’ll receive a written report detailing all the data your CVA considered, his or her evaluating procedures and methodologies, any assumptions or limiting factors, and a final valuation.
If anything is unclear, ask for further explanation. Your appraiser probably spent a lot of time making normalizing adjustments to your financial statements, so reviewing the report can be disorienting for the owner. Take a close look at these adjustments, and be sure you feel confident that they’re accurate.
Your company’s worth adds to the bigger picture of your organization’s financial health and plays a significant part in your personal financial plans. Just as you seek a doctor’s opinion on your physical health, you should seek out expertise when assessing the big picture of your company’s health. A valuation performed by a CVA removes the mystery from your company’s value and gives you a clearer view of what your next steps might be.
Account-based marketing (ABM) is a growing, effective tactic in B2B. While brands have been using ABM and account-based selling (ABS) for years, the adoption of account-centric approaches in marketing didn’t take off until about 2015.
With the help of emerging tools like Demandbase, Madison Logic, Bombora, among others, IP-targeting and cookie-targeting has enabled brands to run ABM programs at scale. But that’s not the only reason it’s taken off. There’s also been an increase in the complexity of the buying cycle. Plus, marketers are under more pressure than ever to satisfy changing consumer behaviors, navigate the regulatory pressures especially around data privacy, all while being sensitive to shifts happening inside of a customers organization as well as the disruption effects of automation.
ABM and ABS are related, but not identical, practices.
Brand doesn’t often find its way into conversations about ABM and ABS. But it should.
Increasingly, there is a tremendous opportunity to cultivate values alignment between brands and the priorities of the different roles and personalities involved in the B2B buying decision. Complex, large deals require sales teams to have a high degree of situational account awareness and fuse that awareness with their knowledge of the product and solutions they are trying to sell.
Consider this example for a large software brand:
The role of brand in ABM is not to be a veneer, but rather to play an active role in both internal and external-facing content. Marketers must create different, often more personalized content not only for the accounts, but for the sales teams and channel partners to use, with prescriptive guidance around what to use and when. Each asset provides a chance to demonstrate to customers there is alignment between their goals, and the brand’s commitment to helping them achieve those goals.
The Blake Project Can Help: Differentiate your brand in The B2B Brand Positioning Workshop
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education
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