Business process innovation is often as important as product innovation

Product breakthroughs that change the game are rare. Much less rare are market share breakthroughs. These are more likely to be the result of delivering better business processes than devising better strategies. A process that is often overlooked as a source of a game-changing breakthrough is the sales and marketing process.

In Business to Business (B2B), substantial innovation is taking place in the sales and marketing process. A key product set of the last stage of the cycle, Enterprise Resource Management (ERM) and Customer Relationship Management (CRM) systems, have enabled one of the drivers of this succeeding stage: innovative customer metrics that are now being added to the marketing dashboard.

Customers are more demanding

In most industries, sales and marketing leaders report that winning new orders has become much more difficult. They point to many types of challenge:

Longer sales cycles; more players in the customer decision process; new kinds of buying criteria; more influence from the line of business than before; less influence from the technical expert than before; smaller average sales; greater expectations of fast payback; more expectation that the sales force understand the customer’s business; more expectation that the sales force understand the B2B customer’s customer’s world.

What happened? How come customers have become more demanding?

1. Their customers are more demanding.
2. Their competitors are more productive.
3. Vendors have served them well and vendors have taught them well. As corporate customers get to know better what their major suppliers are able to deliver, they do what comes naturally: they ask for better, faster, cheaper.
4. Customer finance departments have become much more strategic. They are measuring more things in more ways more effectively.
5. Client organizations are shifting from a purchasing mind-set to a strategic procurement mindset. That changes the dialogue with vendors.

Is all this bad for vendors? Apparently not, corporate profits are at record levels – so where to for the B2B marketer from here?

The B2B sales force that could succeed by pushing boxes is long gone. The marketing department that produces brochures, pre-packaged events and generic whitepapers is also a thing of the past. The lines between sales and marketing have started to blur. Integrated sales teams are emerging as one of the most successful models. One of the key business process innovations of the last few years will go further: the stovepipes will be broken open. Sales, marketing, production, finance and other functions will be much more closely synchronized.

In many sectors the team spans corporate boundaries. In the technology marketplace most companies go to market as part of a partner network. The biggest players are the ones who are most dependent on their constellation of partners to create complete value solutions for customers.

Both within the single company and in the value network, this new team capability has these characteristics:

Flexibility
Speed
Easy
Fast
Resilience
Customer Focus
Human Warmth

This bundle of characteristics will be found in most industries that make enterprise sales. Now here’s the surprise: There are innumerable ways of creating this combination. Sometimes two direct competitors selling nearly identical products will succeed by approaching sales/marketing each in their own way. This is not as odd as it seems. One customer at a time, they will find that the easiest way to profitably stand out from their competitors is through the unique way they create value in the marketing and sales pipeline.

Innovative sales leaders focus their efforts on the customer’s most critical challenge

To understand the way in which the marketing/sales process will be configured look at two places along the value chain: the main point of interaction between the customer and the company; and the support network that sits behind the interaction point.

In some situations, knowledge of the customer industry is so critical, that many sales leaders are recruited from customer organizations. Lacking any depth of experience with the solution they are selling, the main support needs of these leaders are: technical knowledge of the product they sell and relationship managers inside their own company to build ties to the many departments they need to call to create unique value bundles that solve the different specific instances of the customer’s critical problem.

In other cases, the sales leader will have expert knowledge of the company’s offering and limited knowledge of the customer’s industry. These leaders will need very different support. They will need: access to business analysis for every industry they cover and external relationship managers to partner with customers of many kinds and many levels of seniority.

The new marketing dashboard

ERM, CRM and more sophisticated marketing research are all producing new types of data that can help measure the productivity of these new approaches to sales and marketing. One of the surprising features of this new era is that some of the best metrics are found deep inside the customer’s organization.

As sales teams deepen their knowledge of the customer’s business, they are able to identify the metrics that the customer will use to assess the impact of their offering. As customers insist on smaller instillations with more immediate payback, the vendor also benefits from much faster learning on the results their product produces.

In banking and retail, firms have brought quantitative metrics down to the level of the individual store and work group. These groups are able to track key metrics such as customer net promoter scores and employee satisfaction scores on a quarterly basis. This makes it easy to show the link between the introduction of a new tool or system and improved performance results. However they are also challenged to ensure that individual transactional measures are well aligned to support (rather than undermine) the overall benefits and value their customer requires.

Within the vendor’s sales and marketing organization, new metrics include the portion of their time sales teams are able to spend with customers; the number and role of the individuals in the customer organization that have regular interaction with them; the frequency of customer interactions, the length of the sales cycle and the depth of information collected on the customer’s business; the point in the planning cycle they are invited to engage the customer (early vs. late); the percentage of sales that come from sole source requests versus ‘Requests for Proposals’ (RFP’s).

Customer experience and satisfaction surveys are increasingly being conducted on an internal basis to ensure that customer focus is pervasive. Back office work groups are expected to serve their internal customers and make a contribution to the experience and satisfaction of external customers.

In B2B substantial innovation is now taking place in the sales and marketing process. The new marketing dashboard and innovative customer metrics are proving their role in the delivery of game-changing processes and market breakthrough.

About the authors:

Rick Wolfe is founder and CEO of www.PostStone.com. Rick is recognized internationally for the animated client and staff conversations he produces using his unique ‘Kitchen Table’ approach.

Bryan Foss is an independent board level advisor, business author and non-executive director, also founder of www.FossInitiatives.com.

From the Marketing Leaders.