Why short-term lead generation doesn’t work for complex B2B sales

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Today we are going to talk about the challenge of generating new business. We will talk about a lot of the conversations we have regularly with frustrated CEOs whose number one challenge typically is what they would term as lead generation. Really, I don't think we like the term lead generation, as we'll explore through this podcast.

We want to talk about the challenges of generating new business, the challenges of growing pipeline, and why there is this frustration and this sort of short-term mindset that doesn't really marry with the realities of how people buy.

So let's start with this frustration. I think, you know, we speak to a lot of CEOs and they're just embarking on marketing and they can be starting from very different places. Just in the last few weeks, I've spoken with a CEO that's running a business that has never really invested in marketing and they're already at the sort of 30 million pound mark in terms of revenue. Most of their work has come from referrals, but they now need to go beyond that and they need a really effective formalized marketing program.

And then on the other extreme, another CEO that's a startup, but recognizes they want to take a SaaS product to market. They recognize they want to get beyond referrals very, very soon. They've got very, very ambitious demanding growth targets. But in both scenarios, I've talked through, we've talked through the realities of what they're facing. There's a real frustration. Does it have to take a long time to do this? Is it really this complex?

And I think that generally a lot of organizations or leaders that don't understand marketing have this frustration that they think it's a short-term fix. You can understand why that impression or attitude may prevail because ultimately with targets on your back and growth ambitions, the last thing you want to hear is it's going to take 12 to 18 months to really get the marketing machine working in the way that you want it to because you need growth today.

(00:00.108)
I often say "oftentimes." Yeah, oftentimes. This is your buzzword. I think I say "obviously" all the time. Yours is "oftentimes." Which is a way more sophisticated word. Quite often. Or oftentimes.

Welcome to Truth, Lies and B2B Tech. The podcast that separates hype from reality when it comes to B2B marketing, sales and service technology. Join me, Craig Taylor and my co-host, James Ingham. Both of us have spent our working lives in the world of complex B2B sales, always trying to figure out what works and what doesn't. Along with our incredibly smart, special guests, we'll cut through all the bullshit to bring you proven approaches that will help improve how you go to market. Enjoy the show.

(00:49.782)
Today we're going to talk about the challenge of generating new business. We'll talk about a lot of the conversations we have regularly with frustrated CEOs whose number one challenge typically is what they would term as lead generation. Really, I don't think we like the term lead generation, as we'll explore through this podcast. We want to talk about the challenges of generating new business, the challenges of growing pipeline, and why there is this frustration and this sort of short-term mindset that doesn't really marry with the realities of how people buy.

(03:12.672)
It's the short-termism that creeps into the action that those leaders take, particularly around sales and marketing. I think when they start to get into the conversation and really think about the reality of what they're dealing with, it's a dawn of realization and a gradual acceptance. Then coming through that, a more realistic approach and a more realistic set of expectations come from it. But we're talking about complex B2B sales here. We're not talking about transactional sales, low value sales - we're talking high ticket, 50,000 plus deals.

We're talking multiple stakeholders involved in a formal buying group, consensus decision making, long sale cycles, maybe six to 12 months, if not longer. A lot of risk in terms of the decision from the buyer, not just the organization or risk, but also individual risk. If you appoint a new partner or you bring in new products and it fucks up, it's on you. 

There's a lot of challenges around that. There's a great book out at the moment called Jolt, which is from the authors of The Challenger Sale. They talk about the fact that most sales opportunities, I think it's something like 40-50 percent, don't go anywhere because of this indecision. And a lot of that is born out of the fact that people are scared of messing up.

(05:12.462)
And there's a lot of risk in that, also because often what's being bought is a complex thing. There are services which have a complex element to them that also needs to be understood in order to make the right decision. So there is an inherent complexity in these processes. To apply a simplistic view of sales and marketing is clearly at odds with the actual reality of the way that people buy.

Yeah, and I think a lot of the outdated mindset stems from maybe how things used to work many years ago when the internet was around, but the proliferation of content over the last 10 years has moved the control of the buying process from the seller to the buyer.

Sam Pink famously talks about this in many of his books, and this whole kind of information asymmetry where you move from a world where as a buyer, you're starved of information. Take, for example, buying a car. You can't find information about the car, so naturally you'll go to a dealership, onto the forecourt, a state-of-the-art salesperson will take you through how the car functions and all the benefits of that particular car, take you for a spin, etc.

(07:05.774)
That doesn't happen now. There's so much information available. It's flipped to where the buyer has the opportunity now to go through a significant part of their buying process without even speaking to a salesperson. Today it's even gone further than that. Again, reference that to the book Jolt where buyers are actually overwhelmed with information. There's too much information. So as a seller now, just providing information isn't enough. You've got to help them think through the process.

(07:33.344)
And as it relates to B2B complex sales processes, the challenge that those that apply the short-termism or the short-termist view have is that ultimately as a result of not understanding that process, they then don't provide the right level of content or information and make it accessible to those which are in that early stage of the buying process.

Therefore that content doesn't exist. It's not being provided to the buyer. And in most markets, there are several people that do the same thing. A buyer is simply going to get up or in this case, get off your website and go to somewhere where they can find that information without having to speak to a salesperson. You've lost the opportunity to engage with someone at that early stage in the process.

(08:37.582)
At that point, those people that have provided it have stolen a march on you already, and you're at a distinct disadvantage. In fact, most of the time, you're probably only there to make up the numbers in an RFP process, or some form of a competitive process.

So I suppose the point really is that that mindset needs to shift. We've quite often - oftentimes - I'll talk about the 95-5 rule. For anyone watching or listening to this that doesn't know what that is, it was some research done by the Ehrenberg-Bass Institute, Professor John Dawes, I think it was. And I think they work with LinkedIn as well and did extensive research about how buyers buy.

(09:36.29)
I think what they concluded was - and it's common sense, logical - the vast majority of your market, your addressable market is not in market. They're not buying. So 95% of your target audience is fairly dormant, not active. And only 5% are actually in buying mode. I think the research wasn't necessarily targeted at B2B. I think it was B2C and B2B. I think there are maybe critics of it. It is too simplistic and I think it is for complex sales.

If you think about the concept of the research, it's essentially saying that 95% of your market is inactive and therefore you need to really just focus on brand awareness, making them know you, be more familiar with you and when they're ready to buy, you are therefore top of mind. There is some truth in that.

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(10:26.795)
Obviously they're in buying mode and if you only engage them when they're in buying mode and you haven't had that luxury of influencing them and making them aware of you when they're inactive, by the time they come to market, others will have done that and therefore you're not going to be in a position where they know your brand and therefore you're probably going to be on the back foot, back to your earlier point.

Absolutely. And it's unlikely you're going to switch provider during that period unless something horribly goes wrong or there's another trigger point such as your organization is acquired or whatever. But I think there are opportunities even in that where, let's take the example of a website. Someone's just revamped their website, and you'd assume that they may not do anything with that then for another, certainly not a major overhaul of their website for maybe another 12 to 18 months.

But as we know, a recent organization spoke to us about exactly this scenario. They'd just revamped their website, spent an awful lot of money with a website provider, but quite quickly realized it really wasn't set up to support their buyer journey. And they've now engaged us to help them with that particular part of it. Through education, through thought leadership, they recognized an issue. And that sort of flies in the face of the 95-5 rule. There's still an opportunity.

(12:11.31)
Through thought leadership, along with awareness to maybe influence people that have issues and they're on that cusp of buying, and you can just maybe push them over the edge a little bit into buying mode. So I think when it's complex sales, I think there's still an opportunity. And again, back to the Jolt Book, more successful organizations that are able to sell successfully in a complex sale are doing so by breaking up their offerings and working through proof of concepts or audits or smaller pieces of work to get a foot in the door, build trust, and work directly with the client until the big opportunity is met.

(12:25.71)
It's easier to buy. They may not need to go through the same procurement processes. They may not have the same number of people involved in having to make a decision of that scale, etc. Obviously those businesses doing that are successful, not because they're selling those services, but because they're building trust through those services that then leads onto an opportunity later down the line.

(14:00.494)
And getting them to become a customer early on in the sales process with this smaller piece of work that is a small piece of the pie is an even better way of building trust with that organization with one eye on the bigger opportunity at the end of it.

Yeah, I mean, I think a lot of people, business leaders, sales leaders will want to avoid that. You know, we enter at the RFP stage. I remember back in the day, you know, I was gainfully employed. We'd often qualify out if we had no prior engagement, no early engagement with the prospect. If it was a case of we've come in at RFP stage, no relationship, no real understanding of the business. You're just column fodder. You're not really in a good position to win that.

Sorry, what fodder? I thought it was cannon fodder.

Column father, never heard that phrase. Solution selling from Nick Rackham. Column father. So you're basically making up the numbers. Right. I don't know what column father actually means, in its literal sense, but you're making up the numbers basically. So quite often you'd qualify out in that scenario unless you can change the rules of the game somehow.

(16:09.934)
And there's two examples there of where an organization might go wrong. Two practical examples, if they're not led by their buyer journey, the website being one of them, the sales process being the other. Almost everything that you deliver from sales and marketing perspective, in my view, I suppose in our view, should be based upon and aligned with that buyer journey. And ultimately that's what we're trying to get to today.

I think why that may be scary for some people is it requires a level of sophistication in certainly marketing and sales that they're not comfortable with or think can be achieved. It can if you start to break it down into stages. I think you have to look at each individual stage of the journey. I'm not just talking about when someone's entered the buying process, but when they're in that kind of status quo inactive mode right the way through to post-sale when you're trying to move a new customer into being an advocate for the business and promoting the business to generate referrals and all the rest of it.

That really is the end-to-end customer journey that organizations should be looking at, breaking down each stage and thinking about how engagement conversion can be improved at each stage, how you can make sure that you're making it easy for buyers to move to that next step.

A real basic example of back in the day, again, I was asked to take over role as a sales director and really naively used the standard forecasting process. Standard deal stages, you've got initial qualification, you go to discovery, then qualification, then you probably go to a couple of steps before proposal, etc.

Largely based on asking the salespeople in the team where each deal was and when it was going to close. That didn't work out too well. And I was getting hammered for my forecasting because everything was always late or delayed. I think I came across a bit of research from Bob Apollo from Inflection Point who I definitely recommend as an expert in the complex B2B sale. He's published loads of great content.

And this was a number of years ago, but he talked about flipping the sales process and how you forecast to actually match the buy journey. And a good example of that is, you know, proposal stage is typically a store war in most sales processes. A proposal, as you know, someone could ask for right at the early stage of the proposal, that's their buying process, just to get an indicative idea of how much it might cost before they take a business case internally.

But in most deal stages, that's going to feature quite late on, maybe at 68% or something like that. When we flipped it to something more like business case, which is more likely to be the end of the process, our forecasting started to improve. And I think if you can start to think about that in all of your different marketing activities and start thinking in the same mindset where you're flipping it to how the buyer actually buys, then you start to see that you can be more effective.

Yeah, and if you flip that from an inward-looking to an outward-looking perspective, because ultimately, that is a good example, and I'll come onto one around tech in a second, but ultimately, if you're establishing those stages about what you want to happen, very rarely is that also going to be what the buyer wants to happen. And naturally, of course, the buyer's in control of that process. They decide when the next stage happens. They decide if they're going to sign a proposal. They decide if they want to work with that company.

So if you have an inward looking view of the stages and in the order in which you want to happen, then of course it's going to fall. Exactly right. It's built on what you want. You want it to be a very short linear process moving through the funnel every encounter you move them to the next stage. But it doesn't happen like that. You don't, you know, it's very linear because and this is the real point on the buyer side. It's really complex as a buyer.

You've got to establish that there is a real problem before you embark on any kind of buying projects. You've got to feel pain. Moving away from your current approach is worthwhile and there's a lot of risk associated with that. People like to keep things as they are. There's lots of different stakeholders involved in decision with different objectives, looking for different outcomes. You've got to get everyone on the same page and reach your consensus. You've then got to evaluate different options, different solutions. Then you've got to evaluate the strengths and weaknesses of different potential suppliers.

Because there's so much information available now, there's always this feeling that maybe there's something else you've got to review before you make that decision. It's a really complex process and when there's so much money at stake with big ticket deals, this is going to be a lengthy process and it might go back and forth. There's going to be curve balls along the way. And if you've got everything set up in a linear process, it's just going to lead to disappointment.

I think for those that are able to flip that mindset around and look at the buyer journey and map it and understand it, it can then be so useful because it can be applied to almost everything you do from a sales marketing and customer service context. You mentioned one example around the website that you can apply the buyer journey analysis or understanding to. We've mentioned that around the sales process that you can adjust it to.

We talked about content as well, actually, and we've probably spent a bit more time on that. But technology as well and how your systems are set up to enable that buying journey is also really key. So a good example recently from a client project whereby they were changing their organization so that their buying process ultimately was changing. They were targeting a new type of customer.

The natural first step, and by the way, this was a HubSpot project. The natural first step then was to understand how that customer buys. That customer buys in a very different way to their existing customers. And ultimately therefore their systems weren't set up to support that kind of journey.

Let's sum up. Understand your buying journey and everything you do from a sales and marketing perspective, consider that buying journey within it. It's an easy thing to say. It's more difficult in practice. It's definitely more difficult in implementation. But as we've talked about, the benefits of doing so are really, really clear.

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