Sales people have been demanding better leads for a long time and today marketing is in a position to provide them. At the same time, marketers have discovered that the kind of data they collect is as important as its volume.
Marketers need to provide rich prospect profiles that answer many of sales people’s most important questions including: Is there a need? A budget? An executive sponsor? This is information that doesn’t come from simply buying a target list and getting this information requires more than collecting a small set of demographic data.
A few years ago sales people were happy with basic demographics — a name, a title, a phone number — and with that they’d schedule a meeting to capture what was really important such as need, budget, the identities of the decision makers, and more. But with today’s high quotas sales people don’t have time to invest in this basic data gathering and managers want more meetings that advance sales processes rather than performing simple qualification. So all this has caused marketing to re-think its processes to meet sales’ demands.
Today marketers collect a variety of data through multiple techniques to enrich the leads that they ultimately hand over to sales. This approach also weeds out leads that might look good on paper but that will never close.
So, marketers might start with a generic list and apply nurturing campaigns hoping to cultivate information that sales people can use. For instance, they may use social media to engage with prospects and in the process build a knowledgebase and share content. With nurturing and enhanced collection feeding more data to analytics the refined sales leads that marketers are delivering today are a thing of beauty. Unfortunately, that’s not enough any more.
In addition to all the data we collect and analyze to produce sales information, we also need to be mindful of the current situation in all target accounts. By definition, situations change almost daily and the information about change, when added to data already collected through other marketing channels can produce a potent combination.
Information about changing circumstances comes in many forms — press releases, earnings reports, news items, analyst reports, and much more. When added to what we already know about our territories and target accounts, this new information can turn a pile of routine marketing findings into powerful sales knowledge that approaches intellectual property.
If you view IP as the sum of a company’s research, knowledge, patents, processes and the like, then you really should add sales knowledge to your list. The knowledge you can develop about your markets and target customers, in relation to your business’s other knowledge, designs, and plans is unique. You own it, no one else has it and it is a competitive weapon.
But just like filing a patent, there’s a long process involved in bringing knowledge together so that it can be used effectively. Until fairly recently, marketers didn’t have the tools needed to find the disparate data scattered across the Internet that could complete the picture of a prospect’s need. Also that completed picture is most useful when the competition does not also possess it so there is an advantage in being a first mover in the race to capture and collate market knowledge.
That’s why savvy vendors are increasingly relying on sales and marketing intelligence tools to scour the Internet for those bits of information that can complete a marketing profile and turn it into a hot lead. Every day businesses give off data about their aims, ambitions, results, and shortcomings, which can be viewed as moments of truth, and all of this data can be useful for vendors with specific solutions.
This takes some of the randomness out of selling. By identifying moments of truth and being able to suggest specific solutions, a vendor can move from a position of hawking a product to becoming a trusted partner and, of course, this provides the vendor with a competitive advantage.
For these reasons, developing customer knowledge really is like developing any other form of intellectual property in a company. It is also why so many forward thinking businesses see sales and marketing intelligence tools as vital to their continued success.
Are we collecting enough data? It seems like a weird question given the glut of it at most companies and perhaps it is. Perhaps a better question is are we collecting the right data? We could get into a long philosophical discussion of just what the right data is, but that would only happen if we made the mistake of thinking all data is the same.
True all data ultimately gets represented as 0’s and 1’s in the database so at least at that level, all data is remarkably similar. But the comparison stops there. All protons are the same too but how many are associated in a nucleus (along with the companion neutrons) is the difference between lead and gold.
Of course the way through this dilemma is to first ask about the objective of the data collection. Most business leaders will tell you that data collection is a prerequisite of knowledge creation and that knowledge is the objective because employees make business decisions based on knowledge and not data or even information. This is especially true in marketing and sales.
Cultivating knowledge requires us to combine data with other data and information to ultimately result in the thing we need in business, actionable knowledge. To do that it’s necessary to capture a wide diversity of data that includes the stuff that comes from our social media outposts, CRM, and ERP systems. But too often we stop there only to discover it’s not enough.
Sufficiency comes from completeness and relevance and these ideas should be explained. Knowledge has a context. If you want to develop sales knowledge, for example, your goal should be in developing leads, which is another way of saying knowledge about who has a business problem to be solved and the authority and budget to cause a solution to be created. Some would also say that the person represented as a lead should also have cognition of the problem but the counter to this is, that’s what sales people do.
Relevance means understanding all the things related to completeness plus having a suitable solution. It does little good to know that someone has great credit and is approved for a car loan if you don’t sell cars.
So sales knowledge relates to all the data that we cultivate to knowledge plus completeness and relevance. But the data and information that get you all the way to knowledge comes from different sources which brings me to the point of my questions — are we collecting enough of the right data?
We collect a lot of our own data, of course, and we may supplement it from data providers both to cleanse our collections and to add both new data profiles and to flesh out existing profiles. That’s only part of the story, though. It’s like having a very specialized and up to date version of the phone book. Filtering can tell us about attitudes, needs, and other valuable things, but by itself, this data has missing pieces.
Getting all the way to knowledge requires different approaches than simply filtering the social stream or completing profiles. After all, buyers often don’t simply announce a desire to buy something. Instead they may do things like make pronouncements, issue press releases, or introduce reports. Third parties might also supply information that, when married to conventional data produce the knowledge that, under the circumstances, a person or business will need to act in a certain way. These are the things that ultimately drive completeness and relevance.
So, a good question to ask about the whole lead generation process in any company is this: How complete and relevant are the leads that marketing gives to sales? An even better question is, is that intentional?
Sales has a role to play in qualifying deals, especially when large sums or novel products and processes are involved. Frankly, marketing can only go so far in developing a lead. But too often we treat all “leads” alike as if they were protons or data. A company’s attitude toward the need for completeness finally drives the process of lead generation but gauging completeness is too often considered to be part of the sales process and here’s the rub.
Why spend relatively expensive sales rep time getting to completeness if there are better, faster, and cheaper ways to do this? You might never be able to get every lead to 100 percent completeness and making that attempt might cost your some business. Nonetheless, being conscious of completeness as a goal will alter some of your marketing process and possibly even cut down the number of leads marketing hands to sales. So what? Better qualified leads are more worthy of your sales people’s time and resources; so a reduction in quantity, as long as it is accompanied by better quality, would be a good thing.
As always, the devil is in the details — how do you get there? My suggestion is to capture more data or at least some different data. There are wonderful tools on the market that spider the Web looking for the reports, press releases, and news stories, and ferret out the information that provides the completeness we seek. At least some of this data and information might need to be scored and fed through an analytics engine so once again simply collecting this data won’t get you to Nirvana.
But we should all be aware that the bar is being raised for this next level of data collection, and we must understand the importance of completeness and relevance. It’s a competitive world and getting to completeness before your competition might be the new black.
I’d like to say it’s going to be a good year in CRM and I firmly believe it, though I can’t offer a single all encompassing reason for my optimism though there are plenty of small things that begin to add up. In an earlier time the metaphor might have been “straws in the wind.” So what are they?
First, the economy is looking better but that’s faint praise. Things are not as bad as they were a few years ago, for instance the economy is adding in the neighborhood of 200,000 jobs monthly but I read an article the other day that said at this pace it will be another five years before we’re back to the employment level before the crash — in part because we need to absorb all the people who are entering the workforce. But as I like to say, black ink is better than red no matter how little there is.
More concretely, in our financialized economy, the markets are healthy and the broad CRM industry is doing its part to pump out new public companies. While all of them can’t be Salesforce caliber there have been many recent IPOs and the new year looks to have a few more teed up. That at least shows us that companies are evolving as they should and finding markets for their wares.
As usual, companies that are expanding the margin of our markets are the ones to keep an eye on. While I have seen my share of emerging CRM companies as an analyst and a judge in CRM Idol, the ones that are most interesting are those at the margins while the companies that try to reinvent the wheel don’t usually capture the imagination. Companies that I am watching for the year ahead include Xactly, InsideView, TreeHouse Interactive, Scout Analytics, Full Circle CRM, Lattice-Engines, HubSpot, Apttus, and Zuora. My good friend Paul Greenberg will publish a list of a bazillion companies he likes in his watch list. This is not intended to be all inclusive, just a smattering of companies I am well acquainted with.
All of these companies are expanding the margin of the market, expanding our horizons, and while only a few will have an IPO this year, the rest are worth keeping tabs on for sure. IPO candidates in my humble opinion include Xactly, Zuora, Apttus, and InsideView. Interestingly, none of these companies is what you would call a social company, which shows that there are more margins than just social. However, each is squarely positioned as a SaaS value proposition and that says the cloud is a live and well.
Xactly is reinventing compensation management, not just for sales where it got started but in every department of the enterprise. Zuora is making the subscription model mainstream by making accounting and finance in this new world easy. Apttus is a double or triple threat offering configuration, pricing, and quotation technology but they also have invented a way to be into and using Microsoft Office applications in conjunction with SaaS products like Salesforce. The result is a new kind of uber app. Lastly InsideView started as a sales intelligence tool but is expanding its footprint to provide sales and marketing teams with the data and insights they need to pursue opportunities.
I am warming up to TreeHouse because they have an interesting product line including partner relationship management (PRM) and marketing automation. PRM is one of those things that has come and gone more than once over the last twenty years, always with different players. I think this time might be significant as increasing numbers of vendors seek quality partner channels as a means of streamlining their operating costs.
If there’s a theme for the last group — Scout Analytics, Full Circle CRM, Lattice-Engines, HubSpot — I’d say it’s analytics. You might not think of HubSpot as an analytics company, and I don’t think they are one. But analytics is a part off what they do when they provide inbound marketing solutions. Inbound, done right, can be a big boon to business.
The other three offer mainstream analysis, if not analytics. Full Circle focuses on marketing management which I have written about many times because I think the idea of understanding the data and the metadata of marketing programs can do much to make you look smart if you’re a marketer. Lattice loves to crunch data about marketing and the sales process and they do it well. I don’t know any sales manager who doesn’t want better knowledge about all of the processes his or her team is involved in and Lattice is one way to get it.
Lastly, Scout has more mainstream analytics but for subscription companies and they make a good partner for Zuora. Subscriptions generate mountains of customer use data that can be used to predict everything dear to a subscription company’s balance sheet — I mean heart. With Scout’s analysis of use data, companies can spot revenue opportunities as well as danger signs like potential churn. Any way you slice it, this makes knowledge and that translates into market power.
So that’s some of what I am looking at as we start the year. I think it will be a year of base hits with an occasional sprinkling of home runs. Many, though not all, of the companies in this article have raised significant cash over the last year indicating both that the VC markets believe in their stories. But this also means clocks are ticking, investors want to see some returns and IPOs or private sales are on deck. Either way this makes for an entertaining start to the year.
Once a year I write a post that tries to predict some of the big happenings of the year ahead. The success of these efforts relies on clear thinking and objectivity — trying to figure out what will come to pass rather than what I want to see happen. It’s hard but thankfully no one ever checks up on me a year later.
First, let’s take a look at the general economic outlook. The global economy is improving, unemployment is trickling down at least in the U.S. and there are some bright spots like improvements in manufacturing and construction. The Federal Reserve is poised to get a new leader and Janet Yellen has been nominated though at this writing it is far from certain that she’ll pass the senate because she’s a Keynesian after all.
But in a recent Op-Ed in the New York Times, Martin Feldstein, a professor of economics at Harvard, who was chairman of the Council of Economic Advisers from 1982 to 1984, under President Ronald Reagan, suggested a very Keynesian stimulus so perhaps some further stimulation of the economy could be in the offing.
Long story short, the economy is looking better than it has for some time but it’s not great. On the other hand, there is a goodly amount of capital floating around looking for homes in late stage start-ups and the class of potential IPOs looks strong with names like InsideView, Xactly, Apttus, TOA Technology, ServiceMax, FinancialForce and many others. None of the CEO’s want to talk about that stuff, it’s like each is a pitcher in the dugout in the 8th inning of a perfect game.
All of these companies offer SaaS solutions and all are available on the AppExchange which suggests that my universe needs to expand. Nevertheless, the Exchange is a good place to look for signs of opportunity. I suspect application stores or exchanges are going to be very important incubators for new ideas in front office computing so I’ll continue watching them for new signs of life. You never know what you’ll find.
I expect a continuation of a trend that started last year in which marketing became the new darling of the front office suggesting that customer service (which is always important) is cycling out. Service is where vendors go during downturns so that they can try to protect existing revenue streams and, of course, SFA takes a back seat. But after a year of marketing hoopla I think the stage is set to put more wood behind the sales arrow to begin reeling in some of the leads that new marketing systems have been nurturing. So I am looking for new activity in the SFA part of CRM. But not just any activity.
I am still digesting the Bluewolf report “The State of Salesforce” that came out just before Dreamforce. One of the most intriguing findings from the report is that community is the new CRM. If that’s true, it is fairly easy to postulate significant changes to the way we sell. Perhaps sales people will become more involved with communities sponsored by their companies as a way to accelerate sales processes and lower the costs of making customer calls. What sales manager wouldn’t like that?
But I think the hidden message is that community will evolve more as a marketing and service hub, than as a sales tool. Sales will be a by-product of a lot of customer-to-customer interaction. Currently communities are mostly thought of as a part of marketing or as a part of service but I do not think it too far fetched to consider the possibility that community will become its own entity on a par with sales, service, and marketing — its primary consumers. Away from its departmental blinders, the community might be more able to take action to benefit all departments instead of just one.
Run well a community can provide a lot of information to a company and at some point it might make sense to give it its own charter and budget rather than having it mooch off the budgets of marketing or service. I suspect when that happens it will get a new name. Right now we have IT, which takes a technology perspective and that perspective is valuable. But this new entity will be more focused on information development or intelligence. This seems right and I like everything about it except the moniker. No one is going to want to work for ID, just a hunch but I can’t see calling the new department the intelligence department. Given the NSA’s reputation right now, we’ll keep clear of that.
This transition won’t happen over night so it won’t be complete in 2014, which sort of gets me off the hook in prognostication. But from another perspective, the oft quoted Gartner idea that the CMO will have a bigger technology budget than the CIO in a couple of years, I think, goes to the heart of what I am saying. But it won’t be the CMO’s budget, it will be the CIDO’s or whatever we decide to call him or her.