I’ve just been reading Nassim Nicholas Taleb’s book, The Black Swan. It is a fantastic book with some really important lessons for marketers. Essentially, a Black Swan is a rare, unpredictable and big impact event. Despite this, we try to retrospectively fit justification to explain why it occurred. If your forecasts are less than 100% accurate, then there are some great lessons in today’s show.
What he said:
Let me give you the theory of The Black Swan. Taleb makes appropriate apologies to West Australians, my fellow countrymen, about Black Swans, because over there they’re prolific but, everywhere else in the world, a Black Swan is seen as a rare bird. Something of a freak of nature, and therefore unpredictable, so that is his metaphor.
Taleb tears apart the typical Gaussian Bell Curve. Basically what he’s getting at there is that, whilst in theory certain data aggregates around the mean that is not always the case. Think about a person’s height. There is a mean height for men, and males tend to deviate from that mean pretty predictably. Think about the absolute shortest and the absolute tallest men, they’re not that far from the mean. They’re not 1,000 times the mean, they might be half or twice the mean, all pretty modest deviations from the mean. We’ve been taught about understanding data and it’s regression from the mean; it’s deviation from the mean. And that’s fine for the height example, but think about the reality for us as humans. Let’s say you’re an actuary in a large insurance company. The average life expectancy and the deviation from that mean are important pieces of data; an early death or long life are markedly impactful events. Most things in life are verse and the big issue is that we’ve been suckered into this belief that everything clusters really nicely around the mean. Now, think about your forecasts, they’re never accurate. The reason why, I think is a lesson for us today.
We need to use the right information when making forecasts in B2B marketing
What I think:
Most of us miss our forecasts by miles every quarter. Deals slip and deals stagnate, disappearing into obscurity. And when we do make it across the line, that is when we make our forecast, it’s often because you got a few big deals across the line that might have not even been forecast at the beginning of the quarter. Is forecasting a marketer’s game? I believe it still is. It’s just that we have the wrong data, missing data and bad behaviour. Winning deals have a pattern, and so do losing deals. The time taken for a buyer to move between each stage in the buyer’s journey is a great indicator of the chance you have of winning.
What do we need to do? I’ve got five quick lessons for you
- You need to modify your CRM stages to use the stages in the buyer’s journey, not the sales cycle. That is, it doesn’t matter what you’ve done to them, more what matters is where they’re up to.
- Keep your CRM data up to date, and in particular the journey stage.
- Learn what the pattern of a winning and losing deal is, especially look at lag. That is the time taken to move from each stage for a winning deal versus a losing deal.
- Calculate the probability of winning from the data, not from the sales person. That is, it’s the pattern of a particular opportunity following the pattern of deals you tend to win or deals you tend to lose.
- Increase your chance of bluebirds. I’ll explain this one below.
A quick explanation on branding and positioning. In consumer marketing they spend an inordinate amount of time making sure that their brand is positioned in a unique and defendable place. In B2B, because we don’t have the advertising budgets, we tend to do a little bit of branding, which frankly falls and deviates anyway, and then a fair bit of effort on demand. The issue isn’t, what does the buyer think about you? If the buyer is not thinking about you, it doesn’t matter what they think about you. The issue is, we need to be positioned in the category. By that I mean, when a buy goes looking for a product or service like yours, you need to be one of the three that they think about. We need to make sure that we’re positioned, or the bluebirds.
We’re going to manage our data cleanly, so that we actually predict what’s going on and, we’re going to position for the outside as best as we can. Positioning in a category is key. How do we actually do that? It’s remarkably simple, but it’s not what most us of do. Identify the categories that you want to be positioned in. Are they product categories? Are they problem categories? That is, is buyer looking for a particular solution to a particular problem?
Think about what the categories are and do that together, both the marketing and sales teams. Identify those categories and find out what everybody else looks like in that category. The most important thing is to know whether you’re positioned or not. If you’re positioned then define a unique place and make sure that everything that sales and marketing does reinforces that position. If you’re not in that category, then ensure everything that sales and marketing does makes you look like one of the members, rather than try to communicate your point of difference. It doesn’t matter what they think about you if they’re not thinking about you at all, it’s about being in a considered set, or as we would say positioned in a category.
Being positioned though is just the first step, there are other steps in the journey. Once they know who you are, what’s next? You need to plan those steps in your funnel plan. If you don’t already have a funnel plan you can get a free one here. Make sure that the tactics that you’ve chosen help you to position. You need to identify what position you’re trying to hold and then select the tactics you’re going to use to move buyers through other stages in their journey.
In the paid version of Funnel Plan you can do one other thing. You can connect with your Salesforce database and synchronise the data across your funnel plan. It will tell you what the winning pattern and losing pattern of deals looks like so that you can compare your opportunities to that.
References
- Naseem Nicholas Taleb for the Black Swan http://amzn.to/2atVdDN
