The Myth of the Infinite Selling Universe

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1 It s time to dispel the myth that the selling universe is infinite. Once marketers have accepted this reality, then the numbers fade a bit into the background as the shift to quality takes precedence. In the scheme of things, the numbers are a crutch that may not be helping marketers take the best approach to creating business.

2 One of the top three goals of B2B marketers is to increase the quantity of new leads generated. Not necessarily because it s the best thing they could be doing with their time and resources, but because volume has become a mandate in their charter. There has been a quality vs. quantity argument going on for years mostly stimulated by the sales team saying More, give us more, more, more! odds skew a tiny bit in your favor. The same is true with companies. The more leads they have, the higher they think their odds are for closing more deals. The unfortunate thing with numbers is that we can make them play out. If we keep applying the same formula, we ll either see it get better or worse. Regardless of direction, we can reward ourselves because we increased This view of infinite selling possibilities starts in the C-Suite. Company executives are predisposed to make the selling universe infinite. When s the last time you saw a CEO tell a venture capitalist, Our product is only a perfect fit for the 3,000 B2B companies in the United States with more than $1B in revenues? Their job is to create the best case possible for scale and volume of customer acquisition. That s the way to get funding. Unfortunately, this belief is then passed down the ranks. But, even more perplexing than the more is better myth is that the quest for quantity stems from making the numbers. It s based on a mathematical formula that makes buyers statistics, rather than people with needs and problems to solve. It s kind of akin to buying a lotto ticket. Buy one ticket and your chances are gazillions to one. Buy more and the our ratio of wins to losses, or we can go back to the drawing board and reassess why it s not working out. The point is that math gives us something that sounds logical to explain the situation. Numbers can be used for many things; and are some good, and some not so much. Of even greater concern to So the real question then becomes, is that cost increase acceptable based on revenues or is your margin being cannibalized because of the assumption that more is better? marketers should be the costs associated with these numbers formulas. For example, it costs more to generate more leads. It costs more for salespeople to spend more time following up with more leads. This increases the cost per opportunity. So the real question then becomes, is that cost increase acceptable based on revenues or is your margin being cannibalized because of the assumption that more is better? 2

3 It s time to dispel the myth that the selling universe is infinite. Once marketers have accepted this reality, then the numbers fade a bit into the background as the shift to quality takes precedence. In the scheme of things, the numbers are a crutch that may not be helping marketers take the best approach to creating business. Why the Numbers Can Fool Marketers About Markets The explosive growth in social media use has skewed the scope of the B2B selling universe with the numbers. Facebook and YouTube have grown to over 1 billion users each, Twitter has topped 500 million, Google + counts more than 343M, and LinkedIn sports 225M users. Confronted with the sheer size of these communities, marketers have gained the illusion that the selling universe is so vast that the opportunities are endless. But, how true is this perception for the overall B2B market? Demandbase decided to find out. They culled the numbers from their proprietary database of North American businesses discounting branch locations, subsidiaries and satellite offices to keep the picture simple for analysis. World headquarters for these companies might be outside of North America, but they have a presence here. Demandbase really tried to encapsulate how a salesperson would consider a selling opportunity, selling to accounts. Here s what they found: With this in mind, consider your target market. Let s say that you sell to the 3,900,000 companies in the U.S. 3,800,000 have more than $1M revenue 1,450,000 have more than 10 employees 122,000 have more than $25M in revenue Only 3000 have more than $1B in revenue 12,000 companies that earn more than $250M in annual revenues. What if you sell strictly to B2B? According to Demandbase, that filters the numbers down to 3,000 companies. There are an additional 5,000 companies that are a blend of B2B and B2C but these are likely weighted more heavily on the B2C side and are probably not your best opportunities. 3

4 In addition to looking at a much-reduced B2B selling universe, most companies have specific industries that they excel in serving. If your product is particularly suited to Financial Services, the selling universe now scales down to 431 companies; Manufacturing is 275; and Software & Technology comes in at 164. Suddenly, your selling universe doesn t look quite so infinite, does it? Granted, if you take a global approach things will look better, but let s stay within the U.S. for the purpose of this article. Why Your Database Creates False Assumptions You may be sitting there thinking, but wait, I have 7,500 leads in my database! But, if you took a hard look at each one, would the person actually represent an opportunity that s viable? I d stipulate that what you have are 7,500 contacts. If you begin digging through your lead scores, you ll likely find that there are a number of contacts that should be disqualified. Lead scoring is a wonderful tool that helps marketers improve the quality of a lead, but it is still fairly new in application and can present some gaps that lead marketers astray. You may be sitting there thinking, but wait, I have 7,500 leads in my database! But, if you took a hard look at each one, would the person actually represent an opportunity that s viable? Consider the following scenario based on a lead score that could be misleading based on quality: Right department? Check. Right level of title? Check. Buying authority? Check. Right Industry? Nope. Company Size? Nope. Clicked on an ? Check. Visited a high value page? Check. Requested to be contacted? Check. These are pretty standard criteria for lead scoring programs. Meeting 6 out of 8 of the items on the list would probably cause this lead to be handed off to the sales team as qualified. In fact, there are a number of companies that would require much less as triggers for initiating the transition. Establishing a relationship with the right person at the right company is nirvana. But the right person at a company that would never become your customer will derail the qualification process no matter how good they look on paper. 4

5 If the company size is too small when compared to your customer base, then it s likely that they either can t afford your solution or that it s overkill for their operational structure. If the company is much larger than your usual customer base, it s likely that functionality or scale is missing that would be required or some other critical factor. If the industry isn t in your company s sweet spot within an industry your company knows well, chances are also reduced that this lead is a good customer fit. So, let s say that you review your database and cull out 2,500 leads that have the highest potential based on their similarity to your customer base. What s the company overlap? This is the time to look for branch locations, subsidiaries and satellite offices that were ignored when sizing up the company universe above. As you filter your leads, you discover that there are 500 companies represented across the four industries your company sells to with anywhere from 1 to 7 contacts grouped under each one. Now, the sandboxed opportunity of a limited selling universe has a lot of potential if you explore it from an account-based marketing approach. The fear that took hold up above when the reality of the market took hold will now being to dissipate as you explore the wealth of opportunity that s being revealed. As counterintuitive as it may seem, a finite selling universe is liberating. B2B Marketers have a tremendous opportunity to propel their companies to growth. It just doesn t look the same as it may have in the past. By tightening your focus to the companies that can actually become ideal customers, quality of leads improves, win rates increase and marketing and sales find a more holistic alignment. As counterintuitive as it may seem, an infinite selling universe is liberating. It helps you focus and explore possibilities related to that identified target market. You ll have a much better idea of how to allocate your marketing mix rather than spreading your efforts too thin by trying to reel in everyone. Cost per opportunity will also be in better alignment with margins, proving that marketers are active contributors to the bottom line. 5