Not everyone deserves a trophy
Several years back James Harrison made the news for telling his sons they didn’t deserve or need the trophies their team handed out to everyone simply because they participated. James Harrison being a championship winning NFL player knows what many people forget. Not everyone deserves a trophy.
Not every customer is your most valuable customer.
Not every prospect is most likely to close.
Not every sales person will exceed quota.
Not every sales territory is the same.
Not every project is fund worthy.
Your most valuable customers have low acquisition cost and high lifetime value; it didn’t cost much to get them and they’ve spent a lot of money with your organization. They deserve a trophy. Should you cut or trade some lower value customers? Absolutely. Send them back to the minors, supported at a level where value is exchanged profitably. When was the last time you segmented your customer base? What criteria did you use? How many times have you been in the room for the conversation about Bob Buys-Alot and the amount of your resources Bob consumed? Too often, after a thorough customer segmentation exercise, organizations learn, Bob Buys-Alot doesn’t or costs too much.
Along the same lines, once you’ve figured out who your most valuable customers are and what traits they have, you can focus marketing and sales efforts on prospects that are most likely to close and be profitable. Create an Ideal Customer Profile that is trophy worthy. Identify the personas who make or influence the buying decisions in those trophy worthy accounts and focus people, time and money on closing and retaining them.
We spent 7-weeks with a client who gave every sales person a $2MM sales quota and a geographic territory. Part of our analysis showed a left skewed quota model, a preponderance of their sales people were not making quota. A smaller than normal amount were exceeding and carrying everyone, year over year. Turnover was low at the company, low performers stayed for years, getting the same trophy every year, a $2MM quota and no fear of non-attainment.
People, time and money are key levers for every executive to manage and unless you’re living on another planet, they are not infinite. Have you been in those meetings where every project got some funding, the peanut butter approach? Every project manager got a trophy. Every decision has a trade-off, mature products that have performed in the past, may not deserve a trophy and there are clues:
So hats off to James Harrison, not every person, project, department, or product deserves a trophy. Need help finding the trophy winners in your organization? Ascendiosa can help.
Confessions of a BANT-osaurus
Good formulas and frameworks never go out of style.
Imagine my surprise when I learned that BANT was considered passe by two of my colleagues who suggested:
"BANT? You know I love you brother. But BANT went out about 15 years ago. No qualification should deal with budget upfront. Deal with the need, what the problem is that you’re solving. If there’s a significant compelling event, budget will be there. But asking that upfront before we’ve aligned on the problem is the easy route to sales where you’re looking to pick off opportunities from bottom of funnel. Working top of funnel is harder and takes time, but is far more strategic!"
"BANT is something that I feel might be less relevant these days - it depends on your industry. Budget - Incredibly overrated. If the impact of not solving the problem is great enough, they'll find the money; Authority - Even CEOs these days like to build buy-in; Need - Here's where I think we SHOULD focus Timing - If the need is great enough along with impact, that will drive urgency."
Budget is something you should deal with way up front. Don’t market or sell a channel integration system to the single retail outlet operator. Know who your ideal customer profile is, determine what their appetite is for your offering before you waste precious people, time and money. Creating the budget early on in the buyer’s journey may be worthwhile but if only it is feasible.
Authority is not overrated and yes, single decision makers are as common as unicorns. Are you marketing to the right personas with meaningful content that will drive a decision? If your marketing and selling effort is not reaching the right authorization levels in the buyers' organization, making your revenue number is going to be tough.
Need, both colleagues recognize that need can drive budget and timing. Well done if you’re dealing at the right authorization level. How many times have you seen talented sales people stymied by a blocker? Now really talented sales people get beyond the blocker most of the time, but not always. Start with your marketing, by identifying personas and their needs, tailor content and adjust for compelling events. Are you reaching the right level in the organization to stimulate need?
Timing may not be relevant, if you don’t have quota or a quarterly revenue number to hit. If you do, then building a pipeline of opportunities with customers who will buy over a time horizon is critical if you are going to hit your quarterly number, quarter after quarter. Marketing's goal should be the number of sales qualified leads that close, this quarter and each quarter there after.
Buyers go on varying journeys, selling cycle terminology is constantly evolving. You can ask four questions in an account review, regardless of B2B, B2G or B2C and know whether or not your marketer and seller are aligned and your revenue number is secure.
Digging into Budget, Authority, Need and Timing provides revenue focused executives with a clean way to shave away irrelevant variables, which what William of Okham meant before the term "occam's razor" was coined.
Whether you are a Chief Executive Officer, Director of Marketing or a Sales Operations Manager; if you have a role in revenue, BANT is the framework for identifying gaps and aligning teams. Just like a2 + b2 solves for the length of c2.
Over 15 years ago, Blockbuster asked us about disruption. We analyzed broadband and compute market signals and trends, demonstrating that DVD’s would go the way of VHS. Execs were stunned, Blockbuster could not move away from their now obsolete store fronts.
5 years ago, we worked with the leadership of the National Association of Broadcasters at the Consumer Electronics Show. We talked about disruption and walked through the market signals and emerging trends to a stunning conclusion: Netflix and YouTube were broadcasters. Today, that’s easy to see. Now Facebook and Instagram have become broadcasters as well.
We’ve walked through similar exercises for real-estate, manufacturing, construction and medical devices; examining market signals and stunning executives every time. Market signals are emerging trends; AI (Artificial Intelligence) block chain, and crypto currency will have a profound impact on finance, trading and risk and commerce in general. An unstoppable flood of intelligently coded data.
Market forces are like water, dams can be constructed and water can be channeled yet the force remains. The key to managing disruption is in the navigation, just like on the water. Some executives are stunned and some are stimulated.
Here are some interesting market forces for disruption:
85% of the jobs in 2030 will be new jobs according to the Institute for the Future (IFTF) For example, the dating industry in the US is $3Bn per year, £225 million in the UK. I’ll let you do the currency and per-capita conversion. What’s really interesting is the niche job of dating profile photographer. Not everyone can be Kardashian and 90% of the dating profile is all about the photo.
As Forbes previously reported, Freelancers made up a mere 6% of the workforce in 1989; 43% of the U.S. workforce will be made up of freelancers by 2020. Not everyone will drive an Uber or be a dating profile photographer. New unheard of job roles are emerging and accelerating; blockchain engineer, cyrptocurrency manager and drone traffic controller. But one thing is clear, Freelancers can disrupt individuals and organizations.
All this is good news for the economy while raining accelerating cycles of disruption for industries, organizations and individuals.
Brookings characterized the mid-sized Inc. 5000a companies as "vital to the economy" because of their performance:
Just 29 percent of fast-growth companies are in traditional high-tech industries, such as IT services, software, and computer hardware, the study found. Retail, construction and government services are fast growing as well.
The study found four factors positively associated with high-growth company density: a large college-educated workforce, a substantial number of people employed in high tech, a significant share of the population at the prime age for entrepreneurship (35 to 44), and high business formation rates overall.
Netting it out, no industry or company or individual is immune from disruption. Does your organization have disruption acceleration plan? A plan that identifies market signals and trends, then creates alternatives to extinction or success? Do you? Will you be stunned or stimulated?
a Meet America's Greatest (and Most Inspiring) Entrepreneurs This Year, https://www.inc.com/inc5000, January 2018
Six month ago our client was hiring a vice president of marketing. We had helped them re-write the job profile, shuttled some qualified resumes their way and were preparing the executive team to start the dating process. It was important to have the team understand, to get A-Player talent, they would need to approach the interview process more like dating and less as a perfunctory obligation.
First dates can be awkward, so can job interviews. On first dates people start off getting to know each other before diving into "tell me about your greatest weakness". We coached the team on what questions to ask on the first date, what answers they might anticipate and how to ensure the right A-player gets the offer because we were not bringing them any B or C-players.
One of the key questions on the menu was; "in your opinion what should marketing's primary goal be?" The answer varies with the interview.
For the Chief Financial Officer, Return On Marketing Investment or ROMI is an appropriate answer, along with a brief outline of contributing factors of the calculation and questions about the hiring organizations exisiting ROMI efforts.
The Human Resource professional should expect an answer along the lines of revenue attribution and growth, team development along with creating a brand identity that attracts and retains and talent.
The sales leader should expect a variant of this answer; "to generate sales qualified leads that sellers can close." Conversations on ROMI or brand identity are not marketing A-player responses for this first date. Marketing A-players should be able to walk the sales leader through the buyer's journey describing how to create an ideal customer profile, providing criteria for stages and lead scoring. This first date conversation will help the sales leader form a relationship with the marketing A-player; this is a person who can be trusted to help grow revenues. A solid first date outcome.
On the second or third date, A-player marketers should be willing to discuss revenue based accelerators as part of their compensation package. A-players are confident their marketing efforts will contribute to revenue growth.
After six months, the CEO, CFO and Sales VP reported they had hired well. They didn't just hire an A-player, the dating process had led them to the right A-player. The number of sales qualified leads had improved along with the close rates; revenue growth realized.
You are too old for a start up
Don asked a great question, am I too old to launch a game changing start up?
Let's look at history:
The list goes on and on. Granted, Mark Zuckerberg and Bill Gates started well before their 50's.
If age is not the qualifier for launching a game changing startup, what is? There are three essential elements that must exist simultaneously for game changing start ups to succeed.
The founder's passion is essential, joined with passion of the team required to launch the business. Regardless of industry, research supports that only half of new businesses survive longer than 5 years, only one-third survive longer than 10 years. Putting in long hours is a given, start ups require lots of care and feeding, and that requires passion from everyone.
Market potential in the sense of building a better mouse trap and having the world beat a path to your door is still applicable. Is your distruptive start up filling a need or a me too? Can you differentiate your start up sufficiently to stand out from the crowd? Coca-Cola's differentiator was it's recipe, branding and bottling network. In the days when soda was limited to a fountain, bottling with the distinctive branding became the key differentiator that catapulted Coca-Cola to prominence. Can you develop an Ideal Customer Profile and does your differentiator map to their preferences?
Founders are often called out, but it is often the team they build around them that carries the innovation forward. Pemberton died two years after founding Coca-Cola, a team of savvy bottlers propelled the product into new markets. Teams aren't just the collection of people in your office or company, they are often the partners or distributors you attract. Your teams need to see the same market potential and have the same passion you do.
Age is not a handicap when it comes to start ups. It can be an enabler. Older entrepenuers can have a wealth of experience and financial stability that distinguishes them from younger start ups.
Larger companies like Cisco and GE have taken senior personnel, removed them from the corporate heirarchy, placing them into incubators with talent and resources to enable them to develop their next internal start up.
It's not too late to disrupt with the right passion, market potential and team.
Ascendiosa can help accelerate your start up's trajectory.