What if we took the sales funnel we’re all familiar with—awareness, interest, decision, action, all based on what we think is the customer’s psychology—and redrew it based on what actually matters to the purchaser?
Would we think differently, maybe even more effectively, about why people buy our stuff? Would it be a more useful marketing tool?
A recent conversation with the CMO of a highly-regarded investment manager suggests an answer.
This firm is the IBM of its space—a pioneer that is off the charts in respect and trust. In terms of winning new business, however, it isn’t living up to its potential. It has no trouble getting meetings, and it’s included in most if not all RFPs. It makes the finals round an exceptional 50% of the time. And yet it has difficulty closing sales. It wins far fewer mandates than its success further back in the sales process would suggest.
It’s taken the firm a while to figure out why. At first, they asked directly why they hadn’t won the business. Getting honest feedback was difficult. It’s always hard to get people to tell you the real reason they’ve rejected you. When you have industry clout and are generally well-liked, it’s even harder to get honest feedback. Most people would rather keep the relationship than risk it by delivering bad news.
So the firm hired a third party to find out. The true reasons were revealing. Despite their high regard for the brand, most decision makers felt the firm wasn’t a leading investment manager. Everyone liked the firm’s thinking, thought their people were brilliant, and loved their analytical services. These attributes are what prospects love about the firm. And they’re exactly what the firm focused on in finals presentations.
Wrong. Because in the end, these attributes are not what mattered to buyers. At the point of sale, buyers cared only about one thing: investment management. Show me that you’ll be the best manager of my organization’s money.
Consider where this particular buyer is at the point of sale. They’re often volunteers who have put in a ton of time, work, and perhaps consulting fees identifying potential managers. They don’t want to put themselves or their organization through this process again. They’re also fiduciaries, which means among other things that they could be personally liable for their choice. There’s great reputational, legal, and institutional risk to this decision.
The winning firms didn’t necessarily have all the side attributes of the CMO’s firm. But they are known for their investment management excellence. And at the point of sale, that’s all that mattered.
Lots of great takeaways here, but let’s point out two in particular:
What’s the one reason people buy from you? Not why they agree to meet with you as prospects, not why they love you as clients, but why they agree to buy? It’s very likely just one key reason. This is closely related to Clayton Christensen’s Theory of Jobs To Be Done.
Whose job is it to know the one reason? It’s not necessarily surprising or their fault that the firm’s salespeople couldn’t produce this insight. Sales is properly focused on sales. It’s marketing’s job to understand the customer.
And this is one CMO we’ve run into who is really taking ownership of the customer.Related: Michael Lewis on Podcasts