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Lilia Shirman — Page 5

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Lilia Shirman

We just sent out a summary to the participants of this year’s Industry Specialization by B2B Vendors Benchmark Study.   We had a record 120 B2B companies take part in this year’s study.

Companies see that greater customer focus, in the form of industry-specialized sales, marketing, services, and products will enable them to access more senior decision makers and increase deal sizes.  Many are also responding to competitive pressures. The good news is that the investment is paying off.

The full report is due out next month, but meanwhile, a sneak peak at a few tidbits:

  • 67% of B2B companies that already have some amount of industry specialization said they plan to further increase their focus on key vertical markets.
  • It takes two to three years to begin to realize the full benefits of specialization.
  • After 2 years, 70% of companies reported notable or significant impact on revenue from their investments in industry-specialized activity
  • Industry alliances have a big impact on brand awareness
  • Industry-specific case studies and quantitative ROI analysis were reported to be the most valuable industry-specific marketing tactics.  Sales and marketing brochures were least effective.

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Use-cases frame your value

by Lilia Shirman on June 30, 2009

in Sales Tips

I’m amazed how often I ask enterprise sales reps about how the product they just sold will be used, and they don’t know!

Understanding the use-case for your product is essential to making the sale.  If your sales reps can’t answer the following questions, then they don’t understand the customer and they can’t be relevant nor articulate your value and uniqueness.

Why is the customer purchasing?

What initiatives, objectives, or pressures is the company responding to via this and related purchases and actions?  What’s at stake for each participant in the purchase decision?

How will the product be used?

Which business processes will it be involved in? Who will the users be?  How will it change people’s day-to-day jobs?  What performance and business metrics will it impact? How will it change your customer’s customers’ experiences?

What’s the context?

What other systems, processes, and business areas will your product interact with? What else is going on within the company that will determine the value of what you’re selling?

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3 Musts of BtoB Messaging

by Lilia Shirman on June 26, 2009

in Marketing

Relevance – to your buyer’s context for making the purchase: company, industry, role, current business objectives and challenges, and personal interests.

Value – tangible, provable value that specifically and directly links what you’re selling to what the customer wants.  Value is the intersection of results you have proved you can deliver (according to existing customers), and the results the customer is looking for.

Uniqueness – Your secret sauce. That thing that only you can deliver, or for which you are known as the best or the vanguard.

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Selling skills for enterprise reps

by Lilia Shirman on June 5, 2009

in Sales Tips

Your sales reps need to know how your customers think about their customers.     How educated are they about this? Everyone gets product training, but other desperately needed enterprise sales education topics are neglected.  Here are a few:

  • Listening skills
  • Customers’ industries, business processes, and critical business metrics
  • Usage situations (“use-cases”) of your products / services
  • Negotiation in a style that fits your brand and company character
  • Long-term account planning (Not the sales process. The relationship process.)
  • Research, information gathering, and asking questions to discover pains and opportunities
  • Presentation skills sans Power Point

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Asking right

by Lilia Shirman on May 19, 2009

in Customer relationships,Sales Tips

Idea Design’s blog about asking is right on – and applies to businesses as much as to charities. At the end are three points that may as well have been written for businesses – here they are,  with business terms inserted:

“1. Be where your [customers and prospects] are. Hang out with them. Learn their language and be relevant to them.

2. If you want to [close deals] sooner or later you are going to have to ask for [the sale].

3. And when you do ask, ask in a way that is appropriate to your [customer]. ”

In a business, these apply to the sales reps, and to the rest of your organization.   Get your messages into the places customers look to for information (note – first place they look is not your website).   Your marketing, services, and product development / design staff should be attending the same events, reading the same publications, and participating in the same discussions on and off-line that your target audiences do.

Most sales people don’t have much trouble asking for a sale – but they often fail to do their homework and communicate why their offer should matter to the customer in the customer’s terms.  That makes the ask inappropriate.  To increase the frequency of yeses, increase the relevance of your offers.  To make that relevance natural, as Idea Design suggests, hang out with the customers.

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CIO Agenda Recap

by Lilia Shirman on May 11, 2009

in Technology industry

At the Churchill Club CIO Agenda event last Thursday, Peter Solvik (formerly CIO at Cisco) led a discussion among a powerhouse of IT leadership:  Matt Carey, CIO of Home Depot (former CTO, eBay and Wal-Mart), Karenann Terrell, CIO of Baxter (formerly CIO at Daimler / Chrysler), and Lars Rabbe, former CIO at Intuit and YahooTopics included SaaS, Clouds, the good an bad of vendor consolidation, and the uptake of Web 2.0 and collaboration technologies.

Here’s a summary of their views and my takeaways on these top-of-mind IT themes:

Q: What are you focusing on over the next year?

All three CIOs are managing costs more actively, but key strategic projects are still very much under way.  Baxter is doing a massive new ERP deployment, and Home Depot is continuing its supply chain upgrade.  Home Depot’s CFO says that right now, “cash is king,” so the company has stopped construction of multiple new stores (while competitors are continuing to build at a faster rate,  and cut costs in IT and operations.

Takeaways:

There are two ways to sell in this environment. 1. Show concrete cost savings and a short time to realize them.  2. Find out what your prospects’ one big initiative is, and show how you add value to it.

Q: Consolidation – Good or bad? Giving vendors too much power?

Here the CIOs disagreed. Lars felt consolidation helps ease integration, though of course too much consolidation eliminates alternatives. Overall, he felt he’d benefited from consolidation as a CIO. Matt agreed that better integration was a positive, but is concerned that vendors may gain too much power in negotiating contract renewals and maintenance fees.

Karenann, on the other hand, believes that the benefits of integration are limited, that it moves slowly, and that it “has not unraveled the complexity.” Even worse, while everyone is busy with integration, there is a pause in innovation. Karenann also voiced a concern about unjustified support and maintenance costs: “I’m willing to pay an annuity, but only if I get extra value.”

Takeaways:

  • Complexity is still a challenge, so both big and small vendors that can help reduce it can do well.
  • If your competitors are buy digesting acquisitions, take advantage of innovation as a differentiator

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On Recessions and Forest Fires

by Lilia Shirman on April 27, 2009

in Economy,Entrepreneurship

Photo by a brilliant photographer on Picasa (TJ7779)

Several weeks ago, I was driving through the mountains around Tahoe, returning from a weekend of skiing.   As we passed an area that had been devastated by a forest fire, I saw hope in the destruction.

I realized that this recession is very much like a forest fire.  Giants that had been standing for decades are suddenly gone.  Others are still standing, but have been badly singed.  The devastation seems all-encompassing and permanent.

But a closer look at the barren hillside told another story.   Forest fires have another effect that is easy to forget in times like these:   They create the space for new growth.  They are nature’s mechanism for renewal.

The recession, as painful as it is for all of us, is creating room for growth as well.    If we allow it, the difficult times will provide the space and light that are needed for new ventures to get visibility, new ideas to take root, and new ways of doing things to get tried and adopted.

How has the downturn inspired you or your company to get creative and start anew?

(Photo generously provided via Picasa by TJ from Davis, Ca)

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I hate hate hate pricing my consulting work.   There is always a tension between the value it brings to the client (which gurus like Alan Weiss will tell you is the only thing that matters), the reality of the client’s budget, the amount of effort and expertise required, internal company politics, etc.

So even before reading the article about a coffee shop that does not post prices, I had tried handing the pricing reigns to clients by asking some version of, “What do you think this work should cost, given the value you expect it will bring?”

Results?  Some clients did not want to name a number, and I ended up pricing the project as usual.  Some DID name a price: always higher than I would have quoted.   The difference:  Clients who were comfortable naming a price already knew me and had worked with my firm before.  It seems letting your customer set the price may be a great model when:

1. The customer is well-informed about the product and its value, or can become informed easily and quickly as in the case of the coffee shop. (This is the basis for free trials: Assume the customer will assign little or no value when first encountering a product. Depend on familiarity leading customers to agree with you on price.)

2. The customer has had some exposure to competing products and prices, and has a basis for comparing the relative worth of your product vs. the others.

3. The customer has a relationship with you, even if only a momentary one (note in the video that the cafe owner describes people “looking him in the eye and stating what they think is fair”)

Share your thoughts on if and when letting customers set the price is the right thing to do.

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5 Ideas to Slice and Dice Your Market

by Lilia Shirman on April 3, 2009

in Customer relationships

Given that segmentation is the cornerstone of marketing, I am often surprised at how little of it B-to-B companies actually do.  Company size and geography are often the only criteria for segmentation, with industry being a distant third. There are other ways to slice and dice.  A few ideas:

1. Look at customer characteristics such as tolerance for risk, speed of technology adoption, core business driver (are they technology-driven, customer-driven, supply-chain driven, etc.)  – some may be much more likely to buy from you than others.

2. Separate customers with different levels of familiarity and experience with your company and products – your objectives and sales approach will be very different.

3. Split companies up by specific situations, business processes, or use-cases that are common to an industry or a business models.   The solutions and services you offer them will vary drastically.

4. Define audiences based on their roles and responsibilities within an organization or within the decision-making process.   Also consider segmenting by organization structure and culture – highly hierarchical, process-focused companies need a different sale then flat and agile organizations.

5. This seems painfully obvious, but then again, its rarely done:  Segment based on actual customer objectives.   This one is difficult and takes account-specific research to determine who fits where.  So we tend to just assume that all companies in an industry, experiencing the same pressures (you know, the slide that says “Increased competition, Decreasing customer loyalty / ease of switching, regulation and/or deregulation, growing complexity of IT environment..”) must have the same objectives.  But in fact, some are looking to get bought, some want to grow internationally, some want to raise revenue from existing customers, while other are focused on boosting profitability.

Most companies also under-utilize the insights that segmentation provies.  Next time we’ll explore the uses of segment characteristics in various parts of your organization.

Comment and share some innovative segmentation criteria you’ve seen used by BtoB companies.

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What advice would you give small companies trying to prioritize target industries?   Robbie Baxter of Peninsula Strategies, an expert in on-line, recurring revenue streams, asked me a this very interesting question!

At companies with a sales history, industry-specific activity and resources are focused in two kinds of areas:  Where most revenue is coming from already (this is by far the more common focus area), and where there is greatest opportunity for growth in the future.    There can be lots of complex analysis, but in reality few big companies do much proactive planning.  That’s a whole other blog, though.

With a smaller company, the first part of that equation is missing. They don’t have the sales history, references, and channels to naturally leverage into an already-active vertical market.

So, here is a try at some things I’d look at as a small business deciding where to focus.

1. What industry will value what you do most? Where will you impact mission-critical results?

2.  Over time, what group of customers are going to be needing you more and more (and feeling increasing pain you can solve) due to external pressures and trends in their industry?

3. Where are you best able to access the financial decision-makers? (This is a combination of your company’s existing connections and lists, and the target industry’s propensity for doing business with small companies.)

Note that its easier to find ways to reach financial decision-makers than to change the core value of what you do or convince an industry to focus on non-critical issues.  Unfortunately, many small companies start with #3 as the first, not last criteria for selecting target markets.

Please comment with your own thoughts on selecting target industries at small companies.

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