by David Crankshaw on March 5, 2010
Once you’ve identified the buyers you want to connect with and attracted their attention, these buyers have to answer three crucial questions before they can become a customer. These decisions have to be made in order. The length of time it takes to make these decisions is the length of your sales cycle.
1. The first question buyers have to answer is: “Do I have a problem that I must do something about?” The buyer and the “problem” exist in a system that is in balance and is working. You may have identified a problem in the buyer’s organization. But that organization is working in spite of the problem and has figured out ways to work around the problem. Until buyers are convinced that the problem is one that they MUST solve, it’s unlikely that the buyer will continue to the next step in the journey.
One of the best results that Marketing can produce for its Sales group is to convince buyers that the pain of inaction is greater than the pain of taking action. Doing nothing seems like the easy choice until you spell out what may happen if they procrastinate.
2. The second question the buyer’s organization must answer is: “Do we need to go outside the organization to solve this problem?” Maybe the organization has internal resources that could solve the problem. If they’re not sure, what will they have to know to decide whether they have the resources or not?
3. And the final question is: “If we decide to go outside the company to solve this problem, how will we know which solution to purchase?”
Product Marketing and Sales generally focus on the third question. But as you can see, buyers aren’t ready to ask that question, let alone answer it, until they have addressed the first two questions.
by David Crankshaw on March 3, 2010
Racing to the bottom doesn’t win the race unless you’re a skier. When a business faces new competition and lowers its prices in a race to the bottom, it’s a quick route to commodity products and razor-thin margins.
What’s the alternative? In a one-page refresher course on competitive strategy, Hugh Macfarlane reminds us that Michael Porter proposed three generic strategies for responding to competitive forces.
The two main strategies are:
1. Spend less than your competition to produce your products and services. Spend less, but maintain your quality standards. This doesn’t mean just cut your prices. It means finding ways to use your unique capabilities to make things at the same level of quality as your competition, but at a lower cost.
WalMart sells products whose quality is at least as good as the competition in its market, but produces them at a lower cost. It purchases in large volume and pressures its vendors to lower their prices, it improves the efficiency of its distribution system, and it keeps labor costs low.
2. Charge more than your competition without increasing your costs. Charge more because you have found a way to use your capabilities to build a product that customers will pay more to obtain. Create this differentiation without increasing your costs.
Apple is a good example of a company that has not increased its costs to make something that customers willingly pay more to obtain.
Don’t try to do a little of each of these strategies. If neither of them work, then apply the third strategy.
Focus on a niche market and apply Spend Less or Charge More in your specialized market.
by David Crankshaw on February 22, 2010
The activities in your Marketing and Sales Cycle that align with the buyer’s journey are only part of the Marketing Mix. What are the other variables in the mix? How do your Sales Cycle activities fit into the larger mix?
The idea of the Marketing Mix was first used by Neil Borden in 1949. Then in 1960 Jerome McCarthy classified the four P’s as the primary variables in the marketing mix: Product, Price, Promotion, and Place.
A year later Albert Frey suggested a division of the mix that maps well to the model of the Buyer’s Journey. He divided the variables into two groups, the Offering and the Process.
According to Wikipedia,
“The “offering” consists of the product, service, packaging, brand, and price. The “process” or “method” variables included advertising, promotion, sales promotion, personal selling, publicity, distribution channels, marketing research, strategy formation, and new product development.”
To create the Offering requires understanding your resources and your market. You make strategic decisions about which markets to target and how to deploy your financial and operational resources. The variables interact with each other - choices about product affect your pricing, decisions about brand image impact your packaging and product design. Once you have made decisions about the mix in the Offering, your flexibility to make changes is limited.
Marketing Mix - The Offering
The variables in the mix for the Process are more like tools in your tool chest. At each stage of the buyer’s journey you use the tools that will best communicate, educate, and create value for the buyer at that stage. You measure the results from the use of your tools and have a lot of flexibility to make changes.
Marketing Mix - The Process
by David Crankshaw on February 10, 2010
Engineers. Business executives. Marketing specialists.
You’ve spent years learning your profession. Honing your craft. Accumulating experience.
You communicate with your peers in a specialized language. You use the abstractions of shorthand, codes, and acronyms that make communication faster and more efficient.
But the benefit of speaking in abstractions with each other becomes a curse when speaking with someone outside your group. Chip and Dan Heath call it the Curse of Knowledge.
Experts forget what it was like not to understand their field, to be new. And the more they rely on their language, the more frustrating it is for their audience.
Whether you are talking to a customer, teaching a class, or explaining to your mother “what you do”, your tendency will be to communicate to others as if you are talking to one of your peers. And then, surprise, your audience won’t understand or remember what you say.
The cure for this curse?
Once you have clarified your core message and made it as simple as possible, then you want the audience to:
- Pay attention - Your audience needs to believe that you share its values, that you know what you are talking about, and that you have its interest in mind. Speak in their language and vocabulary. Use specific examples to demonstrate your character.
- Understand and remember your idea - Go to your audience and its beliefs. Simplify your message and make it more concrete. Emphasize real-world examples instead of concepts. Make your facts and statistics accessible. Tell a story.
- Take action - Appeal to their emotion. Tell a story with you in it that makes the audience feel it is experiencing the scene with you. Describe in detail through your story what they can expect if they act.
by David Crankshaw on January 28, 2010
A friend of mine works for a solar installation company. Recently he told me a story.
Many Jewish synagogues are investigating the idea of installing solar panels to generate electricity. Like churches and community centers across the country, these synagogues all have Green Committees that are evaluating ways to operate more sustainably.
After some discussion, the Green Committee members at these synagogues say to themselves “Let’s get a sales person in here to talk about solar electricity generation so we can decide what to do.”
The sales person gets the call and though she doesn’t know much about synagogues, she wants to go make a presentation. She’s thinking, “Hey, they called me. It’s a good lead, right?”
And if she hesitates, the buyer says “We called your competitor. They’re sending someone. Why can’t you come out and make a presentation?”
But my friend, who is a member of a synagogue and has served on their Board, knows what’s going to happen:
- The sales person will make the presentation.
- Everyone in the room is a “green” activist. They will all get excited about the possibilities. They can picture clearly the story they will tell their friends about how they were able to get the synagogue to “go solar”.
- The salesperson will leave (feeling positive about this great opportunity) and the Green Committee will discuss the next step, which will likely be a presentation to the Board.
- The Board will listen sympathetically. They’ll probably even be warm to the idea. But then questions will come up about how this fits into the overall Facilities and Capital plan. Questions about budgeting and financing. Questions about evaluating multiple vendors.
If the Green Committee isn’t prepared for these questions, it will be sent off to do more research. It will have to meet with the other committees.
This will take time.
Ouch. Both the salesperson and the Green Committee misunderstood what they were getting into.
Could the solar company take a different approach that would produce a better outcome for the solar company and the synagogue?
At this point, let’s step back and recognize a fact. Collectively, this solar company knows more about the buying process at a synagogue than the buyer does. It has worked multiple deals. It knows the internal policies, the people who must be involved, and the likely pitfalls they will encounter.
Beyond having a great product and the ability to demonstrate its capabilities, how can the solar company create value for the buyer and increase the probability of a purchase?
Here’s the answer. It can create value by preparing the Green Committee for a journey in their own organization that they don’t even know they will have to take. By teaching them how to navigate the obstacles and move their agenda forward. By giving them the tools to prepare for each step in the journey.
If you were running the Marketing department for this company, what would you have to do in order to support the salespeople for this strategy?
- Negotiate agreement with Sales on which markets are viable for your company. Evaluate whether the opportunity in the synagogue market (or any other vertical market) is worth the investment, then act in accordance with the decision.
- Map the buyer’s journey and how the company can create value for the buyer at each stage. Many of the ways to create value have little to do with the product and much to do with enabling the buyers to navigate their own organization.
- Create the marketing structure that responds to the buyer map - articles, web pages, instructions, case studies - anything that will enable the buyer and make the salesperson’s job easier.
- Create the persuasive arguments for each stage. Ask yourself: What is your goal at this stage of the buyer’s journey? What is your goal for the buyer at this stage? How do you create trust that your company has the synagogue’s interests in mind? What logic will you use to make your case? How will you persuade them to make an emotional commitment to your goal and to take action?
