Bad sales funnel?

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Little nightly thoughts
by Business Exploration

Dear Fellow Innovator,

You reached Flavio's blog on business model exploration.

Funnel problems?

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Selling a new high-tech product or service is really tough:

  • Decision makers count in the dozens
  • they shift role faster then the sales cycle
  • and are hiding in mass-organizations.

In this context a poorly prepared sales strategy will lead to longer and more risky sales cycles:

  • new problems could become more urgent for the clients then the one we want to solve,
  • competition will have more time to disrupt our selling process,
  • the cost of selling will be higher.

This while we know that winning new customers is vital because:

  • churn rate is unavoidable
  • growth is a condition to exploit economy of scale
  • each new customer loss, takes away also its future deals

If this sounds familiar, and it's a problem,

here below you find 4 key ideas to build
a better sales funnel.


How to sell B2B high-tech products and services?

  1. target a community;
  2. start with a peer;
  3. bring in a surprise;
  4. tell them the world has changed...

Why the B2B Funnel is different from the B2C Funnel:

in B2B nobody impulse-buys just because of your advertising like in B2C.

  • B2B decision have a life-long impact - the decision maker will live with the consequences of her decision for a long time.
  • B2B decision makers are very competent people - often they know about your stuff more than you do.
  • A B2B buyer makes “purchasing” for a living - a buyer is someone whose job is to minimize purchasing risks, and no one buys a Space Rocket from strangers.

In other words the real distinction should be among:

  • Day-changing decisions (most of B2C purchases)
  • Life-changing decisions (most of B2B purchases)

For this reasons the B2B sales funnel is made of 3 steps:

  1. Build the Relationship with the Client
  2. Build the Client's Trust
  3. Build the Client’s Value

As Americans say, “business follows relationship”, or , better:

“Business follows Relationship … and Relationship follows Surprise”

Building the Relationship is the critical step of the B2B Sales Funnel and this article is about a few hints and a template to make it happen.

Beware of these differences in B2B selling:

B2B is a bit a broad definition. Let’s divide in at least two:

  • B2B for STD (standardized) Product & Services ( i.e. Saas, accounting, RE…)
  • B2B for ETO - engineered to order solutions ( i.e. custom designed )

The STD work horizontally across industries, they count Clients in the thousands or even millions. All the providers of STD can benefit of a B2B promotion. they know it and they are happy to find an agency that can support their sales. But:

  • you should anticipate competition ( once a supplier of promotion is in, is very difficult to unscrew it. Promotion is pervasive and involves a lot of the company’s organization: from sales to engineering to services - if done properly)
  • you should bring a surprising and more effective “new” methodology, one that may leave behind those who dare not to adopt it

The ETO work vertically, tackling a verys specific segment need, they counts Clients in the dozens - sometime even the dozen. In this case a B2B promotion may sounds dispersive, and even if theoretically appealing, the Customer Acquisition Cost (CAC) could be not justificable. There are cases, however, where I witnessed the need to take this route:

  • When a Company enters a new market. In this case may be not obvious which the decision makers are and how to reach them
  • When a SMB faces Big Companies. IT can be very difficult for a small sales team (often the Business Owner plus a sales manager) to navigate the complexity of large organizations, where people stay in position for a number of years lower than the sales cycle, organizational processes change and decision making is done by committees
  • When the real goal is a bit more subtle than simply “sell”. E.g.: when a company need a bit of promotion because is looking for investors or to increase the price in the eyes of a new business owner.
  • When the company R&D has developed a real game changer but it needs to shake up the target industry from the couch, building general consensus and acceptance of the “new rules of the game”
  • Said that, you may then want to go a step further and choose the best B2B sales funnel for your target decision makers. The best one depends by the type of solution you are proposing.

Where to start building a B2B Sales Funnel:

If you moved to a new town as a kid, you know the importance of finding new friends to enter your new community.

It is the same in business: "Business is Relationship", and to start a relationship you must pass through a peer.

  • First: You must pass through a "peer”:
    A peer can lend you credibility and bring you on the board, under the spotlight.
    E.g.: If you take part to a fair, look for the fair Organizer and ask for introdutions. It's his job to make introductions, he knows each one of the partecipants. He will be happy to, and you will avoid to bump randomly into your prospects.
  • Second: You must be remembered
    To emerge from the white noise: bring a “surprise” - the “Un-expected”.
    What is a surprise for a “Business”? It’s a difference in the status quo. A Decision Maker is not interested in you because you bring a product or a solution, but because you make notice a change in the status quo, that is a problem. A problem about which you sound like to be an expert.
    What happens in your prospect brain is: a neural blizzard forges a synapsis connection between: “You” and “the problem”.
    Not a bad start if you then add another connection between “You” and “Solution”.

To start a Relationship, find a Peer:

To reach your prospects you have to pass through a Peer, if you want to scale up fast your market entry.

A Peer is the channel, the medium through which you deliver yourself. It should be a Peer of your Prospect, not your Peer. Someone who is somehow already accredited by your prospect. It’s should be “disinterested” and even better: willing to actively introduce you.

Furthermore it should be “industry focused”. Your Clients do not want to waste their time with people that are not tuned, alerted , activated to their business.

The right Peer depends on the industry, but we can set at least a couple of categories:

  • Direct Peers:
    All those that introduce you in person, like associations, public speaking occasions, expos, conferences, meet-ups, market places, sport competitions, and sometimes even Charities and no-profit, pioneers, mentors and even Competitors.
    Not only they can introduce you, but each networking event is an occasion to gather keywords and messages for your “communication” fine tuning.
  • Indirect Peers:
    they are the ones that introduce you but not in person: like newspapers, magazines, rankings, and leaving a trace on peers blogs, groups and social networks.
    In general any event that mixes Prospect’s Peers and “your” topic, has the advantage to abate barriers and focus the argument.

Want to be remembered? Bring a Surprise: challenge Customer's assumptions

A surprise is an challenge to customer thinking that highlights an upcoming difference in the status quo.

The rational is that any Prospect wants to know how they stand compared to their industry peers: if they are lagging behind the pack, if they are going to be in a Status quo that will differ from the present one for any reason.

You bring a surprise when you challenge a fundamental customer's assumption, forcing an “un-expected comparison” between before and after status.

  • Un-expected:
    Something that destroys the model of reality used by the customer.
  • Comparison:
    a challenge to a fundamental assumption that forces the recipient of the message to compare the ex-ante and the ex-post situations. (and not: “compare about solutions”. Solutions don’t matter in this moment)
    What triggers the surprise is not a comparison among solutions but among situations. It shall challenge the status quo. It could show trials, traumas and triumphs associated to moving between the two situations.
    A Surprise is not made by comparing differences in performances, outcomes or benefits. It’s about comparing the differences of the two Status.

A Surprise ( un-expected Comparison) is that aha! moment that associates You to a Customer’s problem.

It’s the moment when you create the Relationship in the Customer Brain.

I have always in mind the reaction of my 2 years old kid when he saw for the first time a balloon going up, instead than falling on the floor when I released it.

Now “balloons” are forever associated with “new” unexpected and fantastic surprise. The fact that I have introduced him to the fantastic world of “balloons”, it’s probably a bonus that I will leverage for some time.

This examples teaches also a further observations:

If the Surprise comes from an “industry expert, it’s even better. People value specialists the most, even if what you say has an horizontal applicability.

If you belong to the industry, you eat like the industry, you breath like the industry, then you can describe the “status quo” with the right key words, the ones that resonate with your Customer’s brain.

What surprises your prospect?

There are at least 4 kinds of surprise that make your prospect feel a change in the status quo:

  • Un-forecasted issues/problems
  • Un-anticipated market drivers’ changes
  • Un-derestimated results
  • Un-presidiated factors

Un-forecasted issues/problems

Any kind of issue or problem your prospect’s peers have suffered, are suffering or going to suffer and that most probably your prospect will have to deal with soon.

Un-anticipated market drivers’ changes

Here you can refer to classic Porter’s

  • 5 Forces
    Change in the Customers base, new suppliers, new competitors, substitute products, and new moves of actual competition and
  • 5 Environments:
    Change in the Environment/Ecosystem, new Norms and Regulations, Shift in populations trends, impacts of fashions and moods, impacts of new technological trends and innovation.

Un-derestimated results

Some big surprise comes from comparing the final results with the expected ones.

  • Within a company,
    e.g. the “steady state” status quo can be harmed by slow deterioration, fatigue and catastrophic failures of components.
  • From an outside view
    a company can startle at the news of improved Peers results or the change of expectations by their stakeholders.

In general any discordance among imagined / planned / desired results and actual facts capture prospects attention.

Un-presidiated factors

A further source of surprise comes again from failing of considering a company as an evolutionary system, instead of a steady system.

A system may fail not because of a part crash, but because the supporting functions are given for granted:

  • External Resources may be no more available
  • Supporting systems may be no more available
  • Intoxicating factors can overcome safe limits
  • Internal reserves and stocks may suffer ruptures

Tell them the World has changed

A Surprise signals to your Prospect that “the World has changed” (1)

A Surprise says to your Customer:

  • You made the right decision at the time, but the world has changed.
  • Yes, this was the leading technology last year, but the world has changed.
  • Now that your competitor is doing X, the world has changed.
  • This new shift in consumer behavior means that the world has changed.
  • The current cost of X means that the world has changed.

If you can play out with the consequences of inaction via a SWOT analysis, you may end inviting your prospect to re-think the alternatives, and fight the costs of inaction, and her resistances to Loss, making do-nothing : not an option

Tell them to stop playing the Old Game, and start a New Game

The Surprise tells your prospect that the Old game is no more working:(1)

and to win he must move to the New Game:

  • A new game is one that you have labeled, framing the new context
  • A new game shifts the competition into a temporal dimension, urging to change
  • A new game does not negate that the old game was fine, just tells that the new winners are already playing it.
  • A new game is what your company does to help its Clienta to win.

And the "core idea" of your business tells your clients why to choose your solution to play the new game. Your Brand should possibly reflect this.
Like "LEGO". A danish word that means "Play well", tells the client that the core idea about their business is making their clients stop playing just to have fun, but also to learn and grow.

Applying the "Relationship Building" model to your B2B Funnel:

Download the B2B Sales Funnel

It's free.

(1)Note: this template is the result of collecting and assembling ideas and concepts from several Authors: Al Ries, Neil Rackham, Goeffry Moore, Clayton Christensen, Tony Ulwick, Bob Apollo, Andy Rasking et al.

Now that you have a better sense of what is a surprise and a peer, you can apply this concept taking into consideration:

The type of innovation you can deliver

  • a Product
  • a Service
  • an Innovation

The type of decision maker

  • a CEO
  • a Functional Leader
  • an End User

and where it will impact:

  • Business Model impacting decisions are taken by CEOs
  • Organization impacting decisions are taken by Functional Managers
  • Products and services impacting decisions are taken by End Users of your solution.

On the right you see the chart summarizing the type of sales funnel you have to build in each of these cases. You can download it free.

Don't miss the next hint:

I hope this helps, Give it a try and let me know how it worked for you!


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