People, we have a people problem. The US unemployment rate once again hit a 50 year low at 3.5 percent this month. But that’s not the big story. Something more menacing is at work. The US crossed “peak employment” earlier this year — the number of job openings now exceeds the number of available workers.
This “crossing” has created a problem that now threatens to make buyers unreachable. It also changes the relationship between employee and employer. And it’s not just “skilled labor” (which gets most of the press) that is in rare supply it’s ALL labor.
Right now there are 400,000 entry-level sales positions on LinkedIn. According to CSO Insights, it takes 4 months to recruit a one and 9 months to make them productive. New hires who are mismatched for the role or company (15% according to CSO) turnover within the first 90 days. The time to recruit them could actually be longer than the time they spent with your organization.
With an average tenure of only 1.5 years and plentiful job opportunities, reps could and do leave before ever becoming productive. (To keep a revenue-producing position filled for at least 3 years you’re looking at least 2 hires, for 5 years at least 3 hires). And, you’re swimming in a very shallow talent pool, it’s become a decision of hiring a “warm body” versus an “able body.”
This is the reason sales organizations have become obsessed with hiring for the last few years. Crossing the “peak employment” threshold has only compounded the problem. Once demand exceeds supply, employees gain leverage. Add that to a generation, like Millennials, and you have a recipe for a whole new set of expectations that comes along with hiring. If you’re not providing a clear career path, advancement opportunities, upskilling/training, a vacation policy, etc that aligns with their expectations, they’re gone.
This “people problem” has unleashed machines to fill the void. Robo dialers are now making hundreds of dials a day, at a rate of 33 calls per connection (a dramatic increase from 3 calls to connect 15 years ago). AI has now made its way into ABM tools to try to help inexperienced reps be more productive and that’s about to create another problem.
We are now caught in a cycle of what Hank Barnes of Gartner termed “The Machine of More.” With Robo dialers now pounding the phones, sales has set its sight on outmarketing marketing — sales now sends more emails than marketing. This is all ending up on the doorstep of buyers, who according to Hank and Gartner, are now only spending 17% of their time during the buying process speaking with reps.
How did we get here?
Good economic times have created a mentality that there is a linear correlation between hiring and revenue — more reps equal more revenue. As if the number of deals and buyers are keeping pace with this expansion. It’s a number game, namely volume. Cast a wider net and bring back more fish…except that’s not happening.
CSO Insights’ annual Buyer Preference Study finds that only about half (53%) of sales representatives are achieving quota. So what are smart sales managers doing? Knowing that about half of the sales force is ineffective, they’re hiring (or trying to) more reps to make their numbers.
How do we get out of this mess?
Here’s a handful of ideas to consider for 2020.
Long term focus on new hires – according to Seleste Lunsford of CSO Insights, who spoke last month at the University of Texas Dallas Sales Summit, 60% of the sales organizations surveyed are not providing sales coaching. Let that sink in. We’re hiring entry-level positions, who might not be a good fit for the role, and we’re providing little to no coaching. Finding, training, coaching and retaining salespeople has to be a focus. Focus on hiring half as many reps and make them twice as productive.
Focus on conversion, productivity, and profitability – this “mentality of more” is not confined to sales. Investors, you’re complicit in this as well. If you’re working at a SaaS company with investors on the board, you have probably been given the mandate to work the numbers — X in the top produces Y out the bottom. That’s incorrect and it’s creating the wrong behaviors. To be rewarded in today’s market a startup has to focus on driving profitability. The easiest way to do that is to narrow your focus and double down on conversion rates. Do more with less, and do it better.
Watch for sales creeping further into marketing – as I mentioned earlier, ABM tools are using AI in the goal of helping reps become more productive. Here are two areas to watch that are dangerous. The first is DISC personality profiling. Scraping the digital domain, AI tools can build individual buyer profiles in about 2 seconds. In a sense, sellers can now create “one to one” personas that do not align with typical marketing created “one to few” personas. This conflict will cause mixed messages to be sent to an audience who is increasingly becoming tone-deaf. The second challenge is curation tools which allow sales reps to send what they believe to be relevant content to buyers in hopes of being “value-added.” It’s instant ammo in their email spam gun. It’s also a missed chance to use the information to generate more engaging thought leadership content.
Enable buyers – this is the key to changing the tide. Allow buyers to go as far into the sales process as they want and let them choose how and when they want to engage reps. Remove all barriers to information they might need to make an informed purchase decision. Provide digital guidance on how to find the right content specific to their needs on your site or other sites (this will require improvements in UX). Become the source of the most credible information available. According to Gartner, buyers don’t trust reps to provide ALL the information needed. Let buyers do the curation, and you facilitate the process of helping them find it.
Finally, If you take anything from this post, remember these two numbers. First, only about half of sales reps are making their quota, (a decline for five straight years according to the CSO Insight report). Second, 17% of the buying process is spent speaking with sales reps (down from 19% the previous year).
These are two lights flashing something is wrong. Buyers are signaling to stop, but instead of picking up that signal we are ignoring it and the machines are throwing more at them.
The reality that we face today is that the supply of sales reps now has exceeded the demand from buyers for them. We have reached “peak sales hiring.”
At the Sales Summit, I asked the audience how many of their organizations have asked customers what they want, how buyers wanted to be sold to, a grand total of zero hands went up. If you want to create a sustainable competitive advantage, especially if demand slows, find out how buyers want to buy. We have to stop shouting at them and start listening. The machine has to stop.
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by Katie Weisz Estimated read time: Less than 1 minute
Last month, our CEO Scott Gillum was invited to attend the UT Dallas Sales Leadership Summit as a keynote in a debate with Chris Beall, CEO of ConnectAndSell,Inc.
Scott and Chris discussed topics such as “is digital marketing more effective than SDR?”, Chris’s thinking behind “market dominance”, with a lively rebuttal from Scott, and when sales should get involved in the ‘funnel’ with a customer.
In this clip, an attendee poses the question, “How does the environment and relationship change as the complexity of the solution that you are selling increases?”
Listen in here for both Scott and Chris’ responses:
Over the last few months, I have had the opportunity to attend industry events, review new research on buyers and sellers, work with clients on very difficult challenges and observe the behavior of sales and marketing teams working together… and I’m worried.
I’m worried because of the following. Albeit a small sample size, I am seeing the issues below across organizations of various industries, big and small.
– Confusing Activity for Performance, Again
Despite our ability to measure more than ever I have observed organizations rushing campaigns out the door without proper performance metrics defined and/or proper mechanisms in place to capture performance data. And when flagged, the client took a pass on putting them into place because it would take “too much time.” The behavior of go, go, go is pervasive.
– Overreaching Procurementand IT
This observation is unique. It’s the first time I’ve ever seen the procurement and IT group change the requirements on making a purchase decision. The group changed the client sponsor’s key decision criteria to bring in their preferred vendor costing more than $100,000 above the next highest bid. The owner of the work did not get what they wanted and the organization ended up paying more for it. Someone has too much budget.
– Basic Building Blocks are Missing or Skipped
Database quality is owned by everyone, and no one, customer profiles lacking basic information (like emails), performance metrics are missing or not being tracked, process metrics are in place but not used, call list are not being bounced up against do not call list, agencies lacking knowledge on their clients customers and products, and on and on and on.
– Lack of Accountability
Large chunks of money being dropped on media without accountability on the performance of the spend, and sales comp not aligned to organizational revenue objectives and goals. Also see bullet above.
– Silver Bullet
Related to bullet #3, over reliance on the MarTech stack to fix basic problems that they were not intended to fix. The ramping up of Data Science departments to run sophisticated analysis on data that they may, or may not, realize is compromised. Marketing investment decisions being made using outdated marketing optimization models that only output “spend more” recommendations.
– Status Quo
Lack of courage or motivation to make difficult decisions that would impact performance for fear of being disruptive. Control issues that prevent real change from being made by team members who see opportunities to improve performance but may be perceived as threatening to others. “Things are good, don’t rock the boat.”
– Doing the Dirty Work
This is the most disappointing of all of the things I’ve observed. Good marketing is hard work. It requires research to understand buyers, products and competitors. And guess what, it takes time. Recently, I was in a meeting about a new positioning for the organization. Everyone was excited by the idea but the marketing team lost it’s enthusiasm when they heard the amount of work needed to take to bring the idea to life in a campaign. Breakthrough work requires ergs of effort to make it great. It’s the price you pay…get over it.
Much of what I have observed are symptoms of good economic times. Organizations flush with budgets, high demand for products and services, and growing profits are causing organizations to operate inefficiently. The reason this is so concerning is because we’ve seen this movie before, most recently in 2008.
Things are in motion. The trade war, the presidential election, candidates promising to come after industries and corporate profits, big tech getting squeezed by governments over their size and privacy issues.
For the past five years we’ve been able to get away with average efforts. Strong economies and demand bring about waste. “Doing” became more rewarding than “thinking.” Put more in the top and even more comes out the bottom. But those days are numbered.
Being smart about what you do and why, will become a necessity again. Doing more with less will become the reality. So as you do you 2020 planning, have a mindset that a recession is coming. Try taking an approach that assumes you have 20% less budget than last year. Here are 10 things to consider.
What would you cut to reach a 20% reduction, and why? Lay out 3-4 different scenarios.
What would you invest in in Q4 2019 to set you up to be more efficient in 2020?
If you had to turn off 2-3 tools what would they be, and why?
If you had to shut something down to reinvest to get a better return what would it be and where would you put the money?
Could you move something off of your budget line and onto someone else?
Are you paying for something that you shouldn’t or it benefits some other group?
Could you centralize something and get greater efficiencies?
Could you consolidate vendors to be more efficient?
Could you do less and produce better results by sticking to a limited set of priorities?
Could you have one centralized campaign and tie it to several products/markets or goals?
The goal is to become 20% more efficient. Even if the recession doesn’t come next year you’ll be able to clean up some of the sloppiness that comes with good economic times.
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Recently, I published an article with a provocative observation. While much attention has been devoted to the need for organizations to adopt Artificial Intelligence as a core capability, we should consider an even-more-pressing need for “artificial empathy.”
If you did not read part-one, I’ll retrace some footsteps here. The corporation is a creature of human invention. But the creature has grown so enormously in its size, capabilities ,and power, that we the people now encounter a diminishing sense of agency for ourselves and an increasing sense of agency for corporations to shape our future on issues including privacy, equality, safety, the environment, and the behavior of public institutions that once governed these things. Not to mention the stuff of everyday experience: stupid IVRs, impenetrable clam-shell packaging, and infuriating password implementations, just to name a few.
The ramifications of this observation extend beyond marketing strategy. But still, people who think deeply about the relationship between people and brands will play a role in how this narrative unfolds.
And here’s why: In our fast-thinking minds, we perceive the brands that stand for corporations as if they were other people.
Now, people – except for sociopaths – are naturally empathetic. And moreover, we expect them to be so. When we sense a sociopath, the hair on our neck springs, and adrenalin shocks our bloodstream.
As social creatures, we are born pre-wired with miraculously-adapted endocrine and neurological systems that reinforce our empathy in a positive feedback system known as friends and family, community and kin. But corporations are not born with anything of the sort.
Do you see the problem?
At least in our hearts, we have an expectation for brands to behave in a way that they are poorly equipped to fulfill. Expectations disappointed are brands diminished.
Organizational scale amplifies this problem. (We all know what “faceless corporation” means.) So does the doctrine of maximizing shareholder profits. Are there signs that both society and corporate leaders are beginning to discern that the corporation has gained such power, that the power needs to be matched with greater empathy? The recent “statement of social purpose” by 181 corporate leaders suggest this might be so.
The question is how? Some people who read my first post may have been under the impression that I had a plan for how “artificial empathy” could be created. Rest assured this was far from the case. I’m sympathetic to the aspirations of the customer experience movement, but I’m skeptical those aspirations are advanced by continuing to ask socially clueless questions that amount to: “How do you like me now?”
Still, having once stumbled upon the problem of artificial empathy, it’s tempting to speculate. So, with apologies for pairing a ten dollar question with nickel and dime answers, here are some preliminary thoughts.
If you’re familiar with the literature on biomimicry – you will know that many industrial inventions begin with the observation of patterns in nature. Could we re-conceive the information systems used by corporations through this lens?
In that case, the challenge of “artificial empathy” would cause us to think about a system involving a sensory apparatus, a cortex that integrates the signals from the senses, real-time feedback, amplifier mechanisms and so on.
It does not take long to see that analogues for each of these things already exist within the information systems of corporations – but what’s lacking is an architecture marshalled by the imperative of empathy.
For humans as social creatures – empathy is essential for survival. Embracing the biomimicry idea in an IT architecture geared to artificial empathy would mean that the selfish subjectivity of the corporation would need to be subjugated to human experience and dignity. Do we have engineers this creative and leaders this courageous?
There is a branch of philosophy, “epistemology,” that deals with the question of how we know what we know. Historically, for corporations, and indeed any large organization, to operate at scale has required that an internal representation of customers and prospects is shared across the organization. Sometimes this internal representation goes out of date. Sometimes it is simply wrong-headed from the start. Invariably this internal representation is reductive.
Done well, the disciplines of customer segmentation and personas offer steps in a journey away from the most reductive internal representations of the corporation’s publics. But too often in practice, people mistake the map for the territory. In a product-centric world-view with no imperative for empathy, mistaking the customer map for the territory is standard operating procedure – “best practice” even. In a corporation seeking to attain the capacity of artificial empathy these old habits must die.
While corporations have raced to hire data scientists and put them to work on the analysis of customer behavior and customer responses to various stimuli, they have not been as quick or adept at hiring and training people in the discipline of keeping separate the map from the territory while the study of people is underway.
The pairing of these disciplines feels important going forward. Data scientists are in demand now. Data scientists with a flair for philosophy will be the rarest and most valuable of all.
Setting aside the semantic arguments about the existence of AI, we now can access algorithmic tools that can explore data-sets to find multiple features of interest about people, and discover patterns of difference, similarity and prediction that are more subtle than those derived from averages, demographic co-variates, single-touch attributions, and the other mainstays of traditional customer analytics.
Indeed, if we are going to operate with less reductive representations for people, and if we are going to simulate the biological mechanisms of empathy within a corporation, artificial intelligence may be the disruptive game-changing technology that finally enables meaningful progress against a problem that has been building for some time.
None of these answers by themselves is a prescription for artificial empathy. The confluence of all three may point in a worthy direction. Still, some journeys are worth taking, even when the destination is distant and the route uncertain.
by Katie Weisz Estimated read time: Less than 1 minute
The conversation of “Do we really need outbound sales anymore?” continued with another lively interview, this time featuring special guest, Brent Adamson. Brent is a distinguished VP at Gartner, and a published author with a lot to say about the case between sales and marketing.
In the interview, CEO, Scott Gillum, and Brent unpack the idea of Challenger, debunking it as a “sales methodology”, and how both sales and marketing should be co-owning the process of the customer and buyer experience.
Brent also shares three very distinctive approaches (giving, telling, and sense-making) that sales reps are adopting towards information in order to connect with potential customers and buyers.
In this clip, Brent dives into the topic of “the world is crowded with good information.” In sales and marketing, the customer is now surrounded by good, quality information, which is having an impact on their decision making and buying process.
To hear the interview with Brent, listen or download here.
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