By Paul DuPont, Head of Digital Marketing, Pharmaceutics International Inc.
This article originally appeared on LinkedIn on December 14, 2019.
Convenient, on-demand availability of information, made possible by technology innovations, has empowered buyers in revolutionary ways. Who among us has not done research when considering a purchase? It enables us to step into a retailer feeling confident and informed as to the value of the product, the pros and cons of the model we are considering, knowledge of the manufacturer’s reputation and armed with competitive pricing.
The impact of buyer empowerment is not unique to consumer transactions and it has been especially disruptive for more complex, business-to-business (B2B) sales. B2B sales have traditionally relied on a costly marketing effort delivering a large quantity of fresh leads to a highly skilled sales force. Speed, volume of sales, and direct contacts were considered critical for success. The decisive stage of the process was a well-rehearsed salesperson influencing a sometimes less-informed prospect of the features and benefits of a given solution.
Today B2B solution-providers face a very different environment in which prospects, rather than sellers, exercise control over the buyer’s process. The buyer’s ability to discern meaningful value is far greater than the influencing power of a traditional sales pitch. Like today’s retail purchasing experience, B2B prospects will conduct research on-line; using a variety of digital sources, and often remain anonymous until they have decided to reveal themselves to the seller. The tables have been turned and the empowered buyer is in charge.
Businesses have reacted to this buyer-driven change in different ways. Some have adopted technology that automates the sales process, others have increased the size of their sales teams in order to reach more prospects faster, and many remain mired in doing things that have worked in the past. Smaller, privately-owned companies that offer complex technical solutions are finding it harder to compete with larger, resource-rich businesses. However, there is a way for these smaller organizations to compete and fully realize their growth potential.
A New Model – Outcomes Driven Marketing (ODM)
If your business falls into one of the above categories or you are not achieving the kind of growth you desire, it may be time to consider a new framework for business development. Consider a model that is cost-effective, leverages the agility of smaller organizations and teams, and can be easily invigorated by effective executive leadership. The following is the framework for such a model: Outcomes Driven Marketing (ODM).
Strategic Unity. The ODM model requires the complete synchronization of three key principles: Chief Executive Officer (CEO), Chief Operating Officer (COO) and Chief Commercial Officer (CCO). This last position is sometimes referred to as the Chief Business Officer (CBO). The unity of effort forged by this team is more than a concur during a board meeting. The relationship can be better characterized as one of interdependence. Think of rowing, a crew team seated inches apart, synchronized oars moving together to propel the boat forward. The CEO, COO and CCO must be in complete agreement as to the direction of the company and the adoption of the ODM model.
Identify Key Strengths. Most organizations know what they do well, but key strengths are those things that are done well and are profitable. Once identified, business development efforts will focus on delivering these key strengths. The outcome is for the business to be 100% involved in delivering what it is great at, knowing that the profit margins are healthy and that it will spur growth. Over time, a company focused on acquiring business aligned with its key strengths will have a decisive competitive advantage.
Define Market Fit. Gain a full understanding of the relationship between your company’s key strengths and a defined market or set of customers. What problems are you addressing with your key strengths? What types of companies will most benefit from this solution? Your marketing communications will focus entirely on helping this market segment with this issue and introducing them to your solution.
Set Goals. Develop realistic goals with growth and profitability as an outcome and be reasonably specific in a way that is aligned with your key strengths. Use conversion rate, revenue and contracts versus proposals submitted, percentage of growth or even a specific dollar amount, but consider identifying goals by new business, renewing business, product area or services. Consider a grading system for business that is weighted toward that which directly supports key strengths and growth.
Communicate the Strategy. It is vitally important for boards to clearly communicate the ODM strategy to their organizations, not only to marketing and sales teams who will experience the most change, but also operations. However, actions often speak louder than words. Consider sales compensation models that incentivize business that directly supports key strengths and fuels growth.
Measure Progress. Companies are pretty good at measuring results, but they don’t typically measure progress very well. It is important for boards to map the ODM strategy and identify milestones along the way to success. Based on an organization’s key strengths and overall goals, determine what success will look like after three months of implementing ODM. Sales cycles vary by business, but here is an example of milestone success-criteria: after three months the company will have closed two key-strength sales and will be advancing three more that are expected to close in the next three months. Measuring progress by identifying milestones will help boards look at leading indicators of success and be prepared to adjust plans in order to achieve goals when unexpected changes occur.
It Begins In The Executive Boardroom
The framework for Outcomes Driven Marketing (ODM) is relatively clear and easy to understand. It is intentionally uncomplicated because putting it into action to achieve business growth can be challenging. It will be especially disruptive for companies that use more traditional B2B business development models devised before the information age matured to its current state.
Unlike most business development models, ODM isn’t isolated to the actions of only marketing and sales teams. It isn’t simply a new selling technique or a new set of marketing messages, ODM is an entirely different way of thinking about business growth. Business leaders must accept that the sales process has changed 180 degrees with the client now qualifying their partners. Success requires two essentials, a healthy respect for the empowered buyer and a disciplined orientation on goals derived from a company’s key strengths.
The catalyst for meaningful change in business organizations can come from many sources, from improvement ideas initiated by specific departments to company-wide adoption of innovative technology. However, the ODM model has comprehensive, strategic implications and for that reason it is best initiated from the boardroom.
As noted in the framework outlined above, the executive board must function with synchronization, especially the CEO, COO and CCO. The executive members of the board must gain absolute agreement and develop a roadmap before adoption. When done effectively, the board’s actions can energize growth, monitor progress, and steer the company toward the outcomes they have identified. The information age has created empowered buyers, and this requires a new model for business growth, Outcomes Driven Marketing is that model.
If you are interested in learning more about Outcomes Driven Marketing, I’d love to hear from you. You can reach me at firstname.lastname@example.org