Account Management

Sourcing referrals – part 2

This is the second post on sourcing referrals. In the first I explained the importance of designing a referral process and laid out the structure we used in a recent workshop to elucidate one. In this post I will summarise the most pertinent points from this exercise, and explain what our resulting ‘referral process’ looked like.

1. What is required to make a referral work?

(a) You need to have credibility with the referrer

(b) Your referrer needs an appropriate network

(c) The referrer needs to have credibility with the prospect

(d) The prospect needs to be qualified

(e) The referrer needs to be able to articulate your proposition comfortably, easily, and compellingly to the prospect

(f) The referrer needs actually to get around to speaking to the prospect

2. For what reasons might you be reluctant to ask for a referral?

(a) You feel it looks desperate

(b) You don’t wish to put the referrer in an awkward position

3. How can these above points best be addressed?

(a) Timing – ask for referrals immediately after having delivered clear value to your client (addresses 1a)

(b) Research – map out your referrer’s network to identify the best prospects and how strong you believe their connection is to your referrer (addresses 1b, 1c and 1d and also 2a because you are only asking for a referral to a company to which – due to its current situation – you believe you can deliver a valuable service)

(c) Thoughtful approach – by structuring an offering specifically for the prospect (e.g. a review document / a relevant article / a seminar invitation) it makes it easy for your referrer to pass it on, it means they don’t mess up the proposition, and it means they will get around to doing it and won’t feel awkward because they will be adding immediate value to their contact (addresses 1e, 1f and 2b)

We then tied these points up to create a systematic and repeatable referral process:

1. Generate a universe of contacts you could approach as referrers
2. Create a ranked shortlist (using criteria such as the strength of your relationship with them, the quality of their network, etc.)
3. Map the network of each member of the shortlist to understand the prospects they could introduce you to (this in itself requires a systematic approach, for which I won’t go into detail here but should include desk-based research to look at: previous jobs, ex-colleagues and their new positions; professional networks; family, etc.)
4. Pick the optimum prospect from each referrer’s network
5. Structure the optimum approach for each prospect
6. Ask for the referral
7. Thank your referrer and provide them with an update of the outcome

It should be noted that all of this is very straight forward. The key to winning more referrals is to bring the process in line with the rest of your marketing efforts by designing (and subsequently measuring the effectiveness of) a systematic approach. The above is simply an example of such an approach.

Posted by Guest Author on June 2, 2011 at 6:21 pm in Account Management, Blog, Demand Generation, Sales | Permalink | Comments (0) | Trackback (0)

         

Sourcing referrals – part 1

I was recently asked to run a workshop on sourcing referrals from existing clients. The workshop was for the account management team of a SaaS company which provides productivity software to blue-chips’ communications departments. There is a lot of literature on the web regarding referrals as a key part of marketing. I found the most useful opinions, which subsequently helped steer my approach, were on Ian Brodie’s blog.

Everyone knows referrals are a great source of new business – the leads are low-cost and well qualified, and you are able to enter the sales process with a heightened credibility. However, the account management team in question were not hitting their targets in this area. This is not atypical – despite general recognition of the effectiveness of referrals, most companies do not reflect this in their marketing strategies. It is the norm to have a systematic approach to sourcing business through other channels (as part of a multi-modal demand generation strategy) where attention is focused on measuring the effectiveness of each channel (cost, frequency, and quality of leads) and then optimising the process to drive repeatability and visibility.

As such, my objective for the workshop was to co-design a repeatable and effective process for sourcing referrals. I used the following structure to help elucidate such a process:

• What is required to make a referral work?
• For what reasons might you be reluctant to ask for a referral?
• How can each of these points be addressed?
• How can these be tied up into a systematic referral process?

In the following post, I will summarise the points we explored under each of these areas, and what our resulting process looked like.

Posted by Guest Author on May 31, 2011 at 12:58 pm in Account Management, Blog, Demand Generation | Permalink | Comments (0) | Trackback (0)

         

The emergence of the Chief Revenue Officer

It feels like some sort of Awards Season in the global technology world as well as in Hollywood at the moment as growth-stage companies are being recognised by an increasing number of ‘definitive’ top 100 lists. In the last few weeks we’ve seen JMP Securities release its Hot 100 list and AlwaysOn release its OnMedia 100; before that we had the World Economic Forum‘s Technology Pioneers and TechCrunch‘s Europas; in early April 2011 London will host the Telegraph‘s Start-Up 100 event.

Whilst reviewing some of the new companies on these lists I noticed that more and more of them have created a Chief Revenue Officer (CRO) role, particularly in the US.

Revenue Performance Management company, Marketo described its newly-hired CRO’s responsibilities as: “driving the company’s overall revenue strategy, as well as all facets of how Marketo’s sales and marketing departments collectively accelerate global revenue growth and profitability.”

To me this sounds like an interesting evolution on the more traditional ‘Sales Director / VP Sales’ and ‘Marketing Director / VP Marketing’ roles. The premise behind it is that direct sales, channel sales, marketing, and perhaps PR functions should be aligned under a single leader with overall responsibility for hitting the company’s revenue target, whilst elevating the role’s importance to board-level. Metrics for success would be then common across all of those functions so that no single function could be incentivised to work in a way that potentially damages any other.

What are the drawbacks of such a role? I’d say it is a question of timing. The CRO role is a different role from a VP Sales – it’s more of a management role and it requires a more general understanding of the science of revenue generation. It is unlikely to involve as much time in front of customers or prospects. It is more of a coaching and mentoring position for the whole commercial arm of the firm.

In the most challenging, early years of a growth-stage firm it is likely that both leads and ultimately revenue will come through relatively simple processes. There is a lot more market testing and validation to be done and this requires as much face-to-face time with customers and prospects as possible. Sales teams are under pressure to get sales through the door rather than worry too much about optimising processes. You will want to work with dedicated specialists at this stage, who can learn quickly from the market rather than looking inside their own organisation.

Soon, however, there will come a point where the lack of structure and process becomes the major impediment to further growth. Perhaps you have a sales team of 5-10 people, some account managers, some marketing specialists, some reseller partners and a channel manager. Now when you look at your revenue target at the beginning of the year it’s not so clear whether you should put more resources into direct sales, account development, or channel partners. It’s at this stage that a CRO’s responsibilities becomes important.

Posted by Paul Higgins on March 3, 2011 at 3:06 pm in Account Management, Blog, Demand Generation, Entrepreneurship, Partnering, Sales, Strategy | Permalink | Comments (2) | Trackback (0)

         

Article on account development on GrowthBusiness

I wrote an article entitled ‘When To Act On Account Development‘ that was published yesterday on GrowthBusiness. GrowthBusiness is an invaluable resource for entrepreneurs and leaders of fast-growth enterprises.

The article is about the importance of defining an account development role within your revenue-generation team if up-selling and cross-selling become important to your overall strategy.

Read the full article here.

Posted by Paul Higgins on November 25, 2010 at 3:17 pm in Account Management, Blog, Strategy | Permalink | Comments (0) | Trackback (0)

         

Top 10 revenue concerns of a £1m tech company

I was asked today to put together what we thought were the ten most important revenue issues that challenge B2B technology companies with a turnover of around £1m. Typically these organisations have a couple of sales professionals, some sort of marketing support, and perhaps a small Account Development function, all reporting to a CEO or Country Manager.

In no particular order, this is what we came up with:

1. Reducing sales cycle – What are the key factors that determine sales cycle and how do I make measurable improvements in each one?
2. Marketing effectiveness – How many leads do I generate for each pound spent on each different marketing activity? What is the optimal mix for my situation?
3. Account management – How do I ensure that my customers will actively recommend me to their contacts? How can I drive this in a systematic way?
4. Account development – What is the most effective way of upselling to existing customers?
5. Pricing – How do I ensure that I am not leaving money on the table? How can I maximise my return within my prospects’ procurement constraints?
6. Sales distribution model – How can I reduce the risk of having to rely on one stellar performer? How can I encourage sharing of best practice within my sales team? What other sales channels should I invest in?
7. Sales process and sales team design – How do I ensure that the structure of my sales team is aligned with my sales process? How should I define roles within the sales process? How should I hire for each role?
8. Lead generation – What is the most effective combination of ‘push’ and ‘pull’ marketing activities? When should I move more resources from outbound to inbound lead generation?
9. Market leadership strategy – How can I develop a strategy that will capitalise on market trends whilst taking out the competition? Where should I look to carve out a leadership position?
10. New market entry – What is the most effective approach to a new market? How can I use my successes in existing markets to develop new ones?

Posted by Paul Higgins on August 3, 2010 at 4:26 pm in Account Management, Blog, Demand Generation, Entrepreneurship, Partnering, Pricing, Sales, Strategy | Permalink | Comments (0) | Trackback (0)

         

A historical lesson in customer service

In his book, The Ultimate Question: Driving True Growth and True Profits, Bain & Co. Fellow and corporate loyalty expert Fred Reichheld argues that future profit margins and growth are dictated entirely by customer loyalty, which can be built upon if customer satisfaction levels are correctly measured and actively improved through systemic policy.

In brief, measuring customer satisfaction correctly only requires one question: on a scale of 1-10, how likely would you be to recommend us to your friends? The results give you a Net Promoter Score, which Reichheld argues is the best indicator you have of future growth.

In a chapter entitled ‘Develop a Community of Promoters’, Reiccheld equates good customer service with good governance, happy customers to happy citizens, and indicates that his principals are good, American, democratic ones:

[I]n 1781, George Washington was so popular that he could easily have taken the path of so many previous revolutionary leaders by consolidating his power into a new monarchy. Instead, he gave a farewell address at the end of his second presidential term, when his power was at its peak, describing the citizenry as the real seat of power in a democratic society… [this] commitment to community empowerment helped America’s citizens engage in building a society – a network of relationships governed by the rule of law – that has become the world’s leading economic power

Dodging the (long) philosophical debate on the nature of representation, the “network of relationships governed by the rule of law” is therefore the common foundation of good governance and good corporate sense. Reichheld’s idea doesn’t just drive growth, it’s good. It’s democratic. It’s about being nice to people. And it makes economic sense.

“Community empowerment” is the driving force of loyalty. Loyalty is the driving force of corporate survival. If your company (read: government) is tyrannising its customers (read: citizens), detraction (treason!) and contract cancellation (rebellion!) will follow.

History teaches us, therefore, that we ignore customer satisfaction at our peril. Better to be George Washington, without a crown and well admired, than Charles I, without a head to wear it on.

- Marlene, graduate in History from Oxford University

Posted by Paul Higgins on November 27, 2009 at 2:48 pm in Account Management, Blog, Strategy | Permalink | Comments (1) | Trackback (0)

         

Socrates would have made a fine consultant

A significant proportion of the work we do with technology entrepreneurs could be called ‘strategic’. Whilst
our principal goal in working with growth-stage companies is to put
together major revenue deals for them by helping with high-value direct
sales or partnerships (this is what we refer to as ‘execution’ on our
website), we can only do it effectively after we have spent some preparatory time with our clients developing ‘strategies’ together.

Management consultants suffer from the burden of being endlessly associated with creating disembodied strategies which are presented slickly in PowerPoint and then abandoned on bemused directors’ desks. Consulting is what you do when you both confuse and insult, as the quip goes.

This reputation puts us at an immediate disadvantage if we start talking about developing strategies for our clients. Entrepreneurs unthinkingly conjure up images of an enormous team of business school graduates who will leave as quickly as they arrive without staying around to find out whether their recommendations worked or not.

Moreover, I have yet to meet a Managing Director who isn’t already utterly convinced of the potency and soundness of her company’s strategic vision. And this is not surprising: what is more important for the leader of a company than scrutinising and developing a compelling vision?

But even the most bullish entrepreneurs like having bright people around to bounce their ideas off. We have to be involved in developing our clients’ strategies because when we meet a potentially high-value customer or partner with them we have to be able to explain their strategy in a credible way.

Our input to the strategy simply comes by using our experience with growth-stage technology companies to ask the right questions. David Maister in The Trusted Adviser rightly calls this the Socratic method, which we use to help the client come to better-informed conclusions. For example, we ask:

• What sort of company does your service benefit the most, and how can you put a value on the benefit?
• How does the price of your service match up to its value to your customers?
• Under what circumstances is your service better than its competition, and when is it not?
• How do you systematically identify which customers are likely to buy more of your service in the future?
• What is a sales-ready lead for you, how long does a lead take to convert, and how many leads do you need from each marketing source to hit your targets each month?

By all means think of the work we do here as ‘strategic,’ but be aware that we spend our time at the beginning of a project on these questions only so that we can be more effective in generating revenue for our clients. Strategy should be a means to an end – not an end in itself.

Posted by Paul Higgins on January 30, 2009 at 9:06 am in About RIG, Account Management, Blog, Demand Generation, Entrepreneurship, Sales, Strategy | Permalink | Comments (0) | Trackback (0)

         

Find out how happy your customers are even if they won't tell you

For some of RIG’s larger clients, continuing to grow at the same pace in 2009 will depend on developing existing accounts as much as winning new sales. In particular, those companies whose technologies are delivered as a Software-as-a-Service (SaaS) model will keenly understand that winning greater revenues from existing customer accounts is the easiest way to maintain any sort of consistent growth rate.

Targeting other departments or units within existing customer accounts in theory leads to the quickest and easiest sales because you will have already built up credibility with the customer and you will be able to get referrals and introductions directly to the relevant decision makers. However, you should only ask for a referral when you are sure the customer is happy enough with your services to oblige.

A useful first step in your sales process for existing accounts is, therefore, measuring the satisfaction of your customers. For sales teams that are well-versed in pipeline scoring for new sales opportunities, think of this as the most important factor in assessing the likelihood of increasing revenues from a particular account. For those that aren’t, this is the equivalent of finding out whether a new acquaintance would be willing to set up on a blind date with her friend, before you’ve embarrassed yourself by asking and getting knocked back.

There are different approaches to measuring customer satisfaction. The FT reports on the company, Enterprise, which developed its ‘Enterprise Service Quality index’ for this purpose:

The data are generated by asking customers two simple questions over the phone…’were you completely satisfied with the service provided, and are you coming back?’

While I admit that this may work for some businesses, being British and having only ever responded in the negative to the question, ‘Are you completely satisfied with your meal?’ in extreme circumstances, I am sceptical that these questions alone will give you all the data you need. The answers may even be misleading, for example, if a long-term customer and friend no longer feels comfortable telling you directly that the quality of your services has decreased.

We often advise our clients to pay attention to proxies that could give a good indication to customer satisfaction. Consider how a happy customer would act: she would use your services regularly; she would ask for your advice; she would help you put a case study together on the success of your system; she may even invite you to her company’s Christmas party.

All of these proxies can be measured easily (i.e., has she used your services every month for the last six months or not?) and will on occasion be a more effective yardstick for satisfaction against which you can assess your customers.

Posted by Paul Higgins on January 28, 2009 at 6:00 pm in About RIG, Account Management, Blog, Sales | Permalink | Comments (0) | Trackback (0)