Companies providing complex, high-investment solutions are facing a significant risk management issue in light of Sirius Decisions and others finding that B2B buyers are self-educating and moving through as much as 70% of the sales funnel before connecting with sales.
In the most straightforward terms, the risk is that letting high-value prospects progress that far without proactive engagement—and instead relying too heavily on inbound marketing and marketing automation to find, nurture, and convert them—can result in losing deals to the competition.
For me, risk management has always been about assessing business exposure and taking proactive steps to improve a situation rather than remaining reactive when there is downside potential.
I was curious about a more formal definition of risk management and found this on Wikipedia:
"Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities."
In the context of this discussion, there are four areas where overreliance on inbound marketing and marketing automation puts the “realization of opportunities” (i.e., SQLs and closed deals) at risk.
Executive work styles and late adopters
Many C-level decision makers have not yet embraced—and may never—the role of self-education via social media. See an earlier blog on the chief executive of a large utility who finally responded positively on the 42nd touch and later signed off on a $1 billion deal for one of our customers. His was not a self-educating work style, and there was no way he was going to search blogs or websites to download white papers. He responded to a proven outbound lead generation methodology driven by an experienced prospect development professional.
Complex internal buying landscapes
Outbound marketing and its emphasis on personal, direct and regular contact with prospects assures correct assessment of decision maker roles and influence early on. Evaluation and buying dynamics are constantly in flux, and a personal relationship generated and maintained with outbound efforts provides immediate response to shifting prospect landscapes. Selling tactics can be immediately tailored to reinforce the laser-like relevance of a solution.
Early-stage to late-stage market coverage
Many agree that inbound marketing and marketing automation work best when time is not an issue. That is, it takes time to develop content, promote it, and get prospects to find it and engage with it. But overreliance on this inbound “get found and convert” strategy doesn’t address “very early” and “very late” stages.
A primary advantage of a proactive outbound approach lies in the way a company can reach out early to connect with a qualified decision maker and begin to build a business relationship. This activity not only helps the prospect clarify challenges and solutions—it also establishes the company as a trusted thought leader in a way that ideally leads the prospect to view the company as a preferred vendor as the buying process evolves.
And because inbound marketing generates contacts and supports self-education over a period of time, it’s easy to miss opportunities that could be deep in the current pipeline. We consistently find 5% of the market in an active buying stage and narrowing the list of competitive solutions. Many times, we’ve interrupted these scenarios to secure wins for our clients. I might also point out that betting too heavily on inbound marketing providing 100% market coverage is a risk not worth taking.
Inbound marketing works very effectively with solutions at lower price points. An example might be a $10,000 piece of hardware. Technical specifications are to the point, and the buying process may include ordering online or rep engagement with a single contact in a purchasing group. But a proven outbound approach is needed when selling a six- or seven-digit enterprise solution with a long sales cycle to a multi-disciplined executive group.
To put this another way, imagine you’re sitting in front of your demand generation dashboard and reflecting on your marketing strategy. On the screen there are four horizontal scrollbars, and you’ve moved four sliders all the way to the right to indicate…
- Selling to C-level and senior executives
- Complex buying landscape and long sales cycle
- Need to assure 100% market coverage right now
- High-investment offering
In situations like this, sales and marketing executives should check the definition of risk management above and reflect on the right “application of resources to maximize the realization of opportunities.”
The return on complex sales is too high to risk the identification, care and feeding of potential high-value opportunities on overreliance on inbound marketing and marketing automation.
With the complex sale, it remains critical to ground core strategies in a proactive outbound prospect development process proven to be effective in uncovering, nurturing and delivering sales qualified leads.
By Dan McDade