Xerox made a business out of selling copiers. But selling products isn't what Xerox's sales force does anymore. "Our customers have consistently said to us, 'Don't come and sell me a box. Don't come and sell me a technology. Come and sell me a solution to my problem and we can have a discussion,'" says Christa Carone, Xerox's chief marketing officer. "That is how we start every sales engagement at Xerox. We want to understand pain points and we want to understand ways that we might be able to alleviate some of that pain."
Xerox is just one company that has transformed its sales organization to be more customer-focused. The reality of the sales world is that while customers still needs salespeople, they need them in different ways than they used to. Public access to product and service information is at an all-time high, and prospects are often very well informed before connecting with a salesperson. Customers don't want salespeople to sell them a product. They want them to solve a problem. In order to do this effectively, sales organizations need to be more customer-focused at every point in the sales cycle. Yet for many companies, old habits are hard to break.
"There has been a lot of lip service over the years [when it comes to customer-focused sales strategy]," says Jim Dickie, managing director of sales research organization CSO Insights. "It's got to be more than just a product discussion. Customers can go to other sources for product discussions."
According to the CSO Insights report 2010 Lead Generation Optimization Key Trends Analysis (LGO), 91 percent of the 635 respondents say customer acquisition is the top lead generation priority. Yet, Dickie's research also shows that the number one reason salespeople win deals is because they have a positive existing relationship. This means that even with prospects, salespeople need to take the time to understand who the stakeholders are and what their needs are. "Before I make the call, I need to do some research about why I need to call [prospects]," he says. "You have to do the work. You can't short-cycle it. It's the new reality of sales." It might increase the length of the sales cycle up front, he says, but the total sales cycle time doesn't really change because there is less work to do once prospects are ready to buy, because salespeople already have built a relationship.
The CSO Insights report finds that email marketing is the most popular lead generation program, followed by live events and tradeshows, and website registrations. Also of note, social media broke into the top 10 types of lead generation programs this year, illustrating that social, relationship-based lead generation activities are growing.
Many companies are still stuck in the old-school, boiler room mentality of prospecting, however. "A lot of companies are still playing the volume game [with leads]," says Jeff Solomon, cofounder of Leads360. It's tough to put quality over quantity when it's still cheap to get lots of leads. He says that in many cases marketing and sales need to work together to get better quality leads from the outset in order to shift salespeople away from the focus on lead volume. "The best companies are starting to see that, and less sophisticated companies will fall by the wayside.."
One of the biggest challenges to quality lead generation is data accuracy. According to the CSO Insights report, only 8 percent of firms surveyed say the accuracy of their prospect data was above 90 percent, the worst percentage in 11 years. This implies a step backward toward a volume focus, which Dickie says needs to be addressed before companies can be customer centric. The good news is that 50 percent of those surveyed say they plan to increase their investment in data accuracy.
AdReady, which provides online display advertising services, is one company that wanted to gain more visibility into the front end of its sales cycle. "Our challenge was we had no clear visibility into how leads came through [our website], where they came from, and what they were doing once on our site," says Jonah-Kai Hancock, director of marketing. "We needed to get visibility to the sales reps with granular information." Working with Optify, AdReady now tracks prospects and customers who fill out forms on the site, integrating that information with third-party demographic and business information from Jigsaw, and if appropriate, existing customer information in AdReady's CRM database. The company scores leads and serves them to sales reps based on priority, industry, and business challenge. "We are able to have more qualified prospects," Hancock says. "We are able to be more personal. We want to be thought leaders as opposed to having a product focus."
Customer-focused lead management at IBM
As more companies segment customers based on their needs, value, and behavior, sales organizations are following suit by taking a customer-centric approach when managing their leads. Instead of dividing them up by region or product, sales organizations are beginning to assign reps based on customer needs and problem-solving skills.
"Companies need to align consumers with a salesperson based on skills," says Solomon of Leads360. "Route leads to salespeople who have that right skill to solve a consumer's [specific] problem." He adds that this should not be a static approach. "Create an environment that allows you to reroute leads when more information is uncovered and new skills may be required. You need to look at every aspect of the sale all the way through the process."
Also, the term "nurture" implies a customer focus. Solomon says that customer-focused companies should consider lead nurturing as staying in touch without an overt sales pitch. He says it's more about engagement than a transaction. Nurturing programs should reflect the type of lead and common issues, not just products or verticals.
IBM, for example, created a customer-focused sales strategy based on individual needs. "We're extremely focused on our customer's point-of-view, needs, and strategy in our marketing and sales strategy," says Brian Adler, senior Web marketing strategist. "We recognize that our customers have different needs at different points in the sales cycle, and we tailor our approach and messaging appropriately. Because the goals of prospects visiting our Web pages vary depending on where they are in their own decision-making process, we present a range of information and offers tailored to the various stages of the buying cycle: Awareness, Interest, Desire, and Action."
Instead of creating offers as one-off communications for its lead nurturing program, IBM takes a long-term approach. "We think in terms of an offer progression that will take the prospect from the early stages of the buying cycle where they're educating themselves about the broad solution area, through the stages where they're exploring IBM as a potential vendor, and to the final stages where they're doing due diligence on specific products that IBM has to offer."
Additionally, IBM offers live chat between sales reps and prospects. "This benefits the potential customer by allowing them to have their questions answered immediately," Adler says. "At the same time, the reps can explore where the visitor is in the buying cycle, and suggest an appropriate next step for the visitor. In many cases we find that the visitor is seeking the information to support an active project, which means that there's a potential sales opportunity for IBM. It's a true win-win scenario, and it's led to a significant increase in the number and value of leads generated from our website."
IBM also provides online content in tiers, depending on where a lead is in the purchase process. "As an example, on our service-oriented architecture (SOA) pages we have content for prospects who are just beginning to educate themselves on the topic, as well as content for those who are further along in their decision-making process and who are therefore looking for more in-depth information," Adler says. The company also created an interactive video with Jellyvision Labs to engage visitors at all levels of familiarity with the topic. The content of the video changes depending on the user's familiarity with SOA. Adler says that the conversion rate of people registering for an offer after participating in the interactive video is 200 percent greater than the average conversion rate on IBM's Web pages.
Read more about customer focus after the sale and overcoming legacy limitations...
Customer focus after the sale
CSO Insights research shows that 67 percent of sales revenue comes from existing customers. So, the sales relationship cannot afford to end once the purchase is made. "Companies can leverage existing relationships with cross-sell and upsell opportunities," Dickie says. In addition, renewals and referrals are critical sales tools, which require a commitment from the sales organization to the customer beyond the sale. This means thinking outside of traditional sales responsibilities to include other areas like service and product development.
"You don't want to engage with customers only when you want money from them," says Zach Conen, vice president of sales and marketing at LRA Worldwide. "Intuitively, if service is infused into the sales process it's a step in the right direction to gain more business and build relationships."
The Chicago Blackhawks NHL hockey team recently saw an opportunity to create more sales by encouraging a service culture among its sales force. The team, which won the Stanley Cup this year, saw its season ticket holders jump from 3,400 in 2007 to 14,000 in 2008 as the team improved. "We had a huge increase in attention and demand, and we had to manage it forward," says Chris Werner, senior executive director of tickets and business development.
Working with LRA Worldwide, the team hired a small sales force and made service one of the core job functions. "We want to create an emotional tie, not just a financial one," Werner says. The combined sales and service staff engage with season ticket holders, partial plan holders, and even members on the waiting list to learn about their individual customers. "We engage on an ongoing basis and use touchpoints that are not sales-driven." This means visiting customers during games, talking with them, finding out if they use their seats for business or leisure, and learn what it might take to improve the relationship. And many offers given to season ticket holders are extended to people on the waiting list, such as presale individual tickets. "We want to stay engaged with aggressive service."
Werner says in one example, a sales rep noticed a season ticket holder had not attended a number of games. The rep knew he had friends with seats near him, and found out that the man was in the hospital. The team put together a care package with autographed items and gave it to his friends to bring to him in the hospital. "We try to find reasons to have conversations with customers," Werner says. "The more engaged we are, the more of a bond they have with us. We can focus on what we have control over."
Since integrating sales and service functions, season ticket renewal is at 99.6 percent. Werner admits that the team's championship season had a lot to do with it, but it is a high renewal rate even for teams performing well. In addition, season ticket perfect attendance is up by 8 percent.
Overcoming legacy roadblocks
The long-term financial benefits of a customer-focused sales cycle are hard to ignore. But many companies are still entrenched in their traditional sales practices: always be closing, get as many leads as possible, move on once the sale is complete, etc. Many salespeople are compensated based on short-term goals and don't want to waste time on an unproven approach to their specific business.
"When there isn't pain, there is less interest in focusing on developing new skills," says Conen of LRA Worldwide. "Without a driving financial reason, many won't change their approach. "It's not sound business in the long term, but it works in the short term. There are cultural limitations more than there are operational ones."
In addition, sales reps don't always have access to the customer intelligence needed to understand customers in this new way. Dickie of CSO Insights advocates for more sales analytics and customer intelligence. "Sales is a process," he says Dickie. "Turn it into more of a science and less of an art. Take the science, then apply artistry. As you get more fact-based, you can get better over time."
Experts agree that the future sales force will be more customer-focused. "A good sign is that salespeople are starting to shift their thinking," says Solomon of Leads360. Consumers are getting smarter and now even regulatory changes are mandating that sales processes along the entire sales cycle be more relevant. "Companies that align to customers and prospects will be successful."
Conen of LRA Worldwide adds that sales training is trending toward a relationship focus, not just closing the sale. "We are seeing the beginning of a more customer-focused sales process and culture," he says. "Sales reps know they can't only correspond with customers when asking for money."