In the current environment, B2B sales organizations must be quick to adapt to evolving buyer needs and expectations. This is a critical time to take the opportunity to increase revenue efficiency by streamlining the buying experience to match these expectations.
Phil Harrell, VP, Group Director of Sales Executive Services at SiriusDecisions/Forrester and former VP of Sales for HubSpot, has more than 20 years of experience building and leading high-performance B2B sales teams. Following his keynote presentation at the virtual SiriusDecisions Summit, Demand Gen Report sat down with Harrell to gain a deeper visualization of how sales teams must operate — in alignment with marketing organizations and other departments — to deliver buyer-centric experiences.
Harrell also shared insights on:
- Common characteristics of successful B2B sales teams;
- The expanding role of SDRs as part of the development team;
- The role of data and technology to deliver targeted experiences;
- How teams must work together to drive efficient revenue;
- The importance of personalization; and
- What sales leaders must prioritize to help their teams navigate the current environment.
Demand Gen Report: What are some common characteristics of successful modern B2B sales teams?
Phil Harrell: Buyers have a lot more power than they used to. The purchasing dynamic has totally changed. Now anybody can get any information at the click of a mouse before they even speak to a salesperson. As a result, sales teams must be a lot better at assisting the buyer along their journey, as opposed to trying to control the sales process that that buyer goes through.
Modern sales organizations must figure out how they can add value beyond their ability to just describe pricing or the product at a very base level, which business buyers can get on the internet today. They've got to have a deeper knowledge and be able to contextualize what they're explaining to those buyers to help them along their journey.
That leads to the second point, which is that modern sales organizations must ensure that they have effective processes in place. That means that modern sales organizations have to respond with the right information at the right time. They also have to establish processes around new hire training and onboarding to plug new salespeople in and scale them up.
DGR: What role does data play for modern sales teams adjusting to evolving buyer needs?
Harrell: Data is critically important now because buyers are leaving digital footprints throughout their journey and they want personalization. They don't want to talk to reps who don't understand them. That requires sales teams to have underlying data about what the buyer has done throughout their journey so that the sellers can contextualize and personalize their interactions with that buyer.
For example, even before the first point of contact, the buyer has already visited the website to collect information about the potential seller’s products and services. When they interact with sales, they expect the salesperson to have some context about what research the buyer has already done. They don't want that first contact with sales to be a cold conversation where the salesperson doesn't have any context about what they're interested in.
That puts a lot of pressure on the underlying infrastructure, which includes data, to show an end-to-end view of the buyer. They understand their buyer, they can contextualize their interactions in the right place. It’s important to have that data infrastructure to provide insight to personalize interactions.
DGR: Where does the data come from now? Are you seeing sales teams get data just from CRM or marketing automation?
Harrell: There are a lot of tools out there now, and CRM certainly is the key one. But those systems have to be set up with the marketing automation system so that there is a bidirectional flow of information that the salesperson can see what that buyer has done early on in their journey. These systems need to be interconnected so that you have a bidirectional flow of information from the marketing automation platform through the sales of the CRM system. That's very important.
Secondly, there are other tools that aim to help the sales organization modernize strategies, such as engagement tools and sales asset management tools. There is a tremendous amount of technology to help sales teams become more productive, and all of those solutions rely on data. There are also tools to help sales managers better forecast whether deals based on the digital engagement the buyer has demonstrated with that seller throughout the process. This brings data and insight into the conversation.
There are a lot of technology companies trying to help sales modernize processes and help them bring more science into the sales process. The whole concept of combining science and sales is gaining a lot of traction. But you still need the talent to go with it. You want to hire talented people, but you must have a good process in place and a substantial amount of data to be successful.
DGR: Tell me about the role of SDRs as part of the development team. Have you seen that changing and expanding within successful organizations?
Harrell: The role of the SDR has always been important, but I think it's becoming even more essential because, in many cases, SDRs are the first point of contact for companies. SDRs have to be well trained because they are the first impression that business buyers get from engagement with that organization from a human perspective.
SDRs have to be armed with the automation tools to make them productive, but they also have to have the competencies that help them make sure that when they interact with buyers earlier, they're able to understand the buyer’s needs and are able to provide very customized approaches.
DGR: How can modern B2B organizations work together to drive more efficient revenue during these times, when in-person engagement is off the table?
Harrell: Step one — and it sounds so obvious — but you must have alignment. The key steps of making organizations successful are they have to make sure that marketing, sales and product have defined the prioritized target market. What I mean by that is, while you could potentially go after a huge market, what's really important is to home in on the market that has the most likelihood of buying your products or services at that given moment. What many organizations do is let sales figure that out. There's no coordination and what you have is tremendous waste and inefficiency in terms of resource spend because you're expending valuable resources across a very wide range of potential customers and prospects.
The COVID-19 pandemic has only heightened the importance of narrowing down your market and focusing on better segmentation.
DGR: What are B2B sales organizations doing in terms of pipeline given the realities of today?
Harrell: What we're hearing is that many sales organizations are really focusing on their existing customers and that makes a lot of sense. The next step is to seek other ways that you can help your existing customers because you're much more likely to get a deal with an existing customer if they're happy than when you are trying to pursue a new customer in this environment.
Pipelines certainly have been impacted by COVID-19. Organizations are responding to that by doubling down on their existing customer base and making sure they're happy. In some cases, you can have reps assist with customer success organizations or deploy new-business reps to help sell back to existing customers as a way to help build pipelines in general.
You’ve got to be very selective about where you focus your new business efforts and figure out what industries are thriving in your potential target account.
DGR: What should sales leaders focus on to help reps navigate this current environment?
Harrell: What we've advised clients to do in this environment, and what's so important for sales leaders, is to focus on the inputs that lead to success. When you're running a sales team and everybody's making the numbers and the economy is great, it's relatively easy. You're celebrating all these outcomes and the deals you're winning. Then things happen like COVID-19 and the speed of deals being closed slows down. Having been through two recessions myself as a sales leader, I know through experience that you've got to work backward and figure out the inputs that lead to the outcomes you're looking for and concentrate on the little steps that reps should be taking every day. You're going to have to build relationships that you need to get going fast when the economy recovers.
DGR: What are sales leaders struggling with to make this work?
Harrell: A lot of them still struggle to break down those inputs and figure out what to focus on in their day-to-day. Celebrate the wins during this environment and bet that the steps you're doing now will have great success down the road when the economy starts to recover. That’s the right approach that you should be taking as a sales leader right now.
DGR: Is personalization becoming more of a reality? Are sales organizations taking more of a customized path or experience for buyers?
Harrell: There has definitely been more emphasis on personalization, and I think that more companies realize they need to do a better job at that. But I still think we have a long way to go. The first step was using technology to automate existing processes that make it more efficient to send more emails and make more calls. But what’s needed in conjunction with that is to ensure that the technology allows reps to personalize interactions, and particularly in this environment.
If you are trying to reach people without any good messaging and without any good understanding of their potential challenges, you will come across as tone-deaf. Not only are you not going to get through to the prospect, but you’ll also probably ruin your chances of doing something with them in the future. It’s particularly important in light of what's happening now is for sales and marketing to really understand what's happening with that buyer and personalize these interactions based on what challenges they're dealing with at that particular moment.
That’s the level of personalization many companies are aspiring to but haven't gotten to yet — and they need to. The bar is only going to be raised because of buyers’ access to information. They're getting less tolerant of organizations that aren't willing to do that.
DGR: What metrics are necessary to track success? What KPIs are modern organizations looking to track revenue success?
Harrell: LTV to CAC is critical. And that is recurring business lifetime value, which is a measure of how much profit your average customer generates for you and the relationship they have with you. And CAC is customer acquisition cost. How much does it cost to acquire a new customer? When you look at the two, there's a ratio that should be three to one. For every dollar you invest in sales and marketing, you should generate $3 of profit for your average customer. That’s important because it helps you predict where budgets are tight. You're looking for increased efficiency and there's more pressure from executive boards to make sure that their investment in sales and marketing is being used efficiently. That really helps you focus on whether you are using the right kinds of resources to help that buyer. Am I using the right level of automation? Am I using the right mix of human and non-human touches to help that buyer to their journey?
The use of lifetime value and the customer acquisition cost ratio — and using that to inform investments you make and the experience you give your buyers to make sure you're delighting them and driving revenue efficiency — is underappreciated.
In this unusual time period, you can have your cake and eat it too, as weird as that sounds. Most of the time, people think of those two things as mutually exclusive, which is you can either have highly attentive, personalized service on one hand or lower costs on the other — but you can't have both. What I would argue is that you can have both because of buyers’ desire for more self-service and a good digital experience. You can engage them in the way they want and give them more self-service. And you can lower your costs at the same time so you can design a better go-to-market motion to engage in the way they want to be engaged. You can lower your costs at the same time, and the LTV:CAC ratio is a great way to help you do that.
Churn is also critical, and it’s baked into LTV to CAC. LTV is impacted by your churn rate, but you want to make sure your existing customers are satisfied.
DGR: What advice would you give modern sales organizations navigating this current climate?
Harrell: I would say don't miss this opportunity. It's unfortunate what has happened during the pandemic, but if you're adaptable and you examine what's happening with buyers and how their habits are changing, you have the opportunity to redesign and reinvent your go-to-market strategy. And if you do that, you really have an opportunity to gain a huge competitive advantage, because there are going to be companies that go back to the way they did things before COVID-19. They're going to go back to the familiar processes and procedures because it's comfortable. They're not going to realize that the buyers have fundamentally changed and will continue to change.