Friday, October 1, 2010

Win-Loss Studies and Four Sequential Steps to Synchronize Sales & Marketing

Extract taken from:
http://blogs.hbr.org/cs/2010/09/why_sales_and_marketing_are_at.html

Struggling companies all share something in common. Their sales and marketing efforts are at odds. Sometimes, they are even at war. The marketing team lectures the sales department, saying that if only the salespeople would follow their advice, their problems would be solved. Meanwhile, the sales department always says it needs something else from marketing. The salespeople are clamoring for the silver bullet that will convince the most ardent skeptic to buy.



The root cause of this situation is that sales and marketing have different views of the world. To the marketing department, selling is a series of steps that you guide a prospect through. These steps are based on the logic of purchasing the product, and the marketing team's job is to provide the tools to move the prospect to the next step.


Meanwhile, salespeople must work with the unpredictable part of the process: people. Their job is to formulate an account strategy based upon the people to whom they are trying to sell. They need intuition about what to do and say in a particular competitive situation.


As a result, friction between the two areas develops. Salespeople feel they must translate what they see as marketing's theoretical arguments into a practical message, while the marketing team often believes the salespeople themselves are the problem because they are not following their product positioning. Having analyzed hundreds of sales cycles and conducted thousands of interviews as part of the win-loss studies I have performed on behalf of my Fortune 1000 clients, here are four sequential steps to define the intuition that sales needs so sales and marketing are synchronized.


Step 1: Identify Customer Decision-Making Politics


The premise of most marketing departments is that the customer is purely a rational decision maker. Therefore, the best product should naturally win and they believe their product is always the best. However, prospective customers have personal biases and are influenced by organizational politics and the personalities involved in group decision making.


The first step is to understand the people involved in the sale. Analyze at least thirty recent key sales cycles (consisting of an equal number of won and lost accounts) and map out all of the people who were involved. List their titles and roles in the organization, and hypothesize about the selfish interests that motivate them to buy.


Step 2: Determine Sales Cycle Turning Points


Every deal has a critical moment or turning point that determines the winner and the losers. In some cases, the turning point is easy to spot. For example, while a salesperson is presenting his solution, he encounters a deal-breaking objection that he is unable to overcome. Even though the customer remains cordial for the rest of the meeting, a turning point has occurred and the deal is lost. Recognizing when and why you lost momentum during the sales process is necessary to keep it from happening again in the next account. List the turning points for each of the sales cycles analyzed in the first step.


Step 3: Conduct a True Win-Loss Analysis


Win-loss analysis is very important, but unfortunately, it's a lost art. True win-loss analysis based upon extensive customer interviewing is the best way to understand customer behavior during the selection process. The goal is to have customers comment on the company, selection process, competition and give their perceptions of the sales cycle experience and product opinions. They should also be solicited for their advice and recommendations.


Step 4: Perform a Marketing Tools Audit


The final step is to amalgamate the data from the steps above in order to perform a marketing tools audit. Summarize important qualitative information about the political, organizational, and technical aspects of customer decision making into common themes. Then make a comparison to find where gaps exist between the tools marketing provides (customer success stories, product demonstrations, competitive comparisons, analyst reports, etc.) and the materials needed to counteract business or technical objections and overcome key deal-stopping turning points. After the audit is completed, sales and marketing leadership should then define the nature of their relationship and how they will interact in the future (see this excellent HBR article for more insight on this).


Closing Thoughts


The ongoing conflict between sales and marketing is the "elephant" in the room at many companies. No one wants to talk about the problem until it becomes so disruptive that it must be dealt with. By following these four steps, the divergent viewpoints between sales and marketing can finally be aligned.


Steve W. Martin teaches sales strategy at the USC Marshall School of Business. His latest book on sales neurolinguistics, Heavy Hitter Sales Psychology, is based on his successful 20-year sales career.

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