Part 3 - Why you are on your 3rd Chief Revenue Officer
Practical Paradigm - The Business Development Funnel
There are at least 3 reasons you keep having to find that new “rock star” CRO:
Each one keeps doing the things that don’t work, albeit after firing and rehiring a sales and business development team. (see Part 1)
You haven’t built the foundation for developing and selling business. (see Part 2)
You are operating without a practical guiding principle based in reality. (Please read on)
Think about business development and selling as a continuum. Trace it backward in time from the point of a signed contract. At the end of that spectrum, you will find the emotional motivation on the part of your customer to commit to you. Leading up to that crescendo is an increasing inclination on the part of the customer to visualize how your solution might work for their business. Before there can be this interest, however, the prospective customer becomes curious and open enough to be informed about your company and solution in depth. But none of this happens unless the customer is aware of – wait for it – your “Who”, “What”, and “Why”. You may want to review the previous post for context.
The figure below illustrates the progression from awareness to motivation. It’s what I call the agwella Business Development Funnel.
agwella Business Development Funnel
There are at least a couple of points to gather from the Funnel.
Learning from the Funnel
First, it’s valuable to recognize that there really is a pragmatic progression and a logical sequence to follow that’s based in the real world — a paradigm that is specific enough to be practical, yet general enough to accommodate various tactical selling approaches (e.g. Challenger Sale, etc.).
Of course, any particular deal cycle will progress at its own pace. It’s very dangerous to try to force every sales cycle to fit some sort of template based on one success. If you haven’t done that, I know you have been part of an organization that has. Pretty much every sales organization has tried to take a one-size-fits-all approach at some point.
The problem is that we all know from experience that every deal is unique in important ways. That’s one reason why the Business Development Funnel is useful. Each phase happens in every deal, although the exact path that you and a customer take through the phases will be different.
Second, the Funnel also provides a guide for the organization and progression of business development efforts. Initially, the bulk of your effort needs to be on awareness. As your apparatus, deliverables and effort scale up, you will reach a baseline of awareness in a given industry. You can, then, shift more emphasis up the Funnel to subsequent levels.
Third, you need to build the tools necessary for each phase and use them appropriately. For example, don’t spend a lot of effort building collateral for generating interest before you have a portfolio of tools driving awareness.
Nuances
The Business Development Funnel should be pretty self-explanatory, but there are three subtle points that are absolutely critical.
The four phases are obviously not discrete. They overlap and you may need a tool or two in the “motivate” phase while you are still primarily focused on building awareness.
Every day, more of this progression, starting with “aware” and up through “inform” into “interest”, and in some cases, even into “motivate”, becomes self-service. Some solutions like Atlassian (read more here) can be very low touch. But this reality makes the Funnel even more important.
Leveraging the Funnel
Almost every software company fails to put enough (or any?) effort on building awareness by increasing the personal network of your sellers. This is essential for leveraging the Business Development Funnel. It requires at least three actions:
Constantly increase the depth of your sellers in their knowledge of the target space and your solution. You see, it’s going to be hard for a seller to advance awareness, inform customers, generate interest, or motivate a prospect if they are not adequately aware and informed, themselves. Sellers need to be able to help customers visualize how they might benefit from your offering. They don’t need to do this all by themselves, but sellers can’t be illiterate either, depending on some poorly crafted catchphrases. They have to be solid on the “Who”, “What”, and “Why” (see Part 2).
Train sellers to be empathic connection builders. “Empathy” seems to be one of the terms da jour, but true empathy is not a new concept. I recommend How to Win Friends and Influence People by Dale Carnegie as a primer for principles on connecting with people. Awareness is about building connections, not pitching software.
Spend the money and effort to put your sellers where they can make these connections and make people they meet amicably and memorably aware of your “Who”, “What”, and “Why”.
You need deeper, more connected sellers, not just more “feet on the street”.
Adding bodies and raising quotas while reducing territories and solution scope is usually just a formula for more churn. It is certainly a losing approach unless you stop doing things that don’t work, build the right foundation, and follow an organizing principle that works.
