Author: Jim Burns / Source: Marketing Insider Group Many B2B selling organizations hit a wall in their new customer acquisition and reven
Many B2B selling organizations hit a wall in their new customer acquisition and revenue growth rates. Sales pipeline quality, volume and conversion rates are both symptom and impact of this situation.
This condition is especially evident in companies that are engaged in a complex or solution sale. Sometimes this is called a system or platform sale. The analyst firm SiriusDecisions calls it a “new paradigm” or “new concept” sale. I and others use “value sale”.
Even companies with a traditional, product selling model are not immune. Companies that experience stalled revenue growth may attempt to shift from traditional product selling, to a more consultative and comprehensive solutions or platform approach. Too often they bring their traditional selling mindset, process and skillset with them.
The B2B sales prospecting epidemic is the result of a critical underlying cause most people are unaware of and do not fully appreciate even when they become aware.
Companies that have had a hot, successful product eventually hit the growth wall. Their unique situation quickly propels them to $100, $300 or even $800 million in revenue. Then they experienced the revenue plateau.
Many years ago I observed PTC, a company near me, have this experience. (At that time they were Parametric Technology Corp – NASDAQ: PTC)
PTC grew to about $800 million with a hot CAD product that ran on the “new” Microsoft NT and later classes of high-powered, low cost, desktop systems. This opened the possibility for all engineers, enterprise-wide and globally, to have their own CAD design software system, inter-connected with all other engineering systems.
PTC rode this wave expertly. They sold CAD design software to engineers. Customers were easy to identify. Their customers understood their business problem and the product category (software) needed to address that problem. They knew how to use and even optimize the use of the product. There was no “paradigm shift.” This was a straight capability enhancement and replacement sale.
Then the inevitable happened. PTC had captured a significant part of the CAD market. But to meet market growth rates expected by investors, they needed to find or develop either another super-hot product, or a higher price, more comprehensive “solution” offer.
Product Lifecycle Management (PLM) was the decision they made. This was an exponentially more expensive initial sale than their CAD sale. It addressed an enterprise need, not a department need. It was a complex “platform” sale. This meant selling required engaging many significant functions across customer organizations. Of course, it was a very long sales cycle.
More importantly, it required a fundamentally different selling model. It took many years for PTC to successfully execute this sales transformation. Many managers and reps lacked the competency and skill to conduct this kind of sale. Revenue growth stalled. The stock price plummeted.
Underlying Cause of the B2B Sales Prospecting Epidemic
In Geoffrey Moore’s technology selling model, companies that find themselves “inside the tornado” with a hot product must focus on two core activities — take orders and ship product.
This is straight product selling to active, knowledgeable buyers. It’s a rush to a land grab before competition catches on. Prospecting must be targeted, aggressive and efficient.
In this situation the prospecting mindset is, “when buyers see how compelling our products are, they will decide to buy.” This prospecting approach sounds like:
“Hi, I’m from company X. We have a breakthrough replacement product for Y. Analysts A, B and C have called this the greatest thing since …. I’ve just signed up Company A, B and C who I’m sure you know. Would you like to meet and hear more about it?”
Pretty much sounds like most of the prospecting calls I receive each week. This also reflects the mindset I hear when I talk with these sales people.
I call this “find opportunities” selling.
The problem is, there aren’t enough active buyers to meet quota and tougher revenue growth goals. Like silver bullet product features, these market conditions don’t last long. Competition catches up. Customers become smarter. Sellers have to shift from selling to knowledgeable (IT) professional buyers, to teams of inexperienced buyers from multiple functions.
The core cause of the B2B sales prospecting epidemic is an inability to create opportunities when buyers aren’t looking…