The way companies win customers has changed more in the past five years than the previous hundred.
Whether you’re trying to get consumers to download your new app or you are selling a multi-million dollar software system, the rules have changed. The business world is quickly dividing itself into two camps: executives that are embracing this new world and those that will be left behind.
From Predictable to Unpredictable
When I was in business school, we learned the Predictable Buying Model. Buyers, we were taught, all follow a predictable and well-worn path to purchasing anything.
Awareness→ Opinion→ Consideration→ Preference→ Purchase
Life was good! With this model in hand, it allowed executives to make sense of the world! We could forecast what next month’s sales were likely to be based on where our buyers were in this process. We could measure our team’s efficiency based on how deals flowed through this model.
Armed with this knowledge, we built our organizations to push our prospects through this model.
- Awareness = Branding
- Opinion = Product Marketing
- Consideration = Advertising
- Preference = Inside Sales
- Purchase = Outside Sales
Executives could sleep well at night knowing that the world was predictable! Chief Marketing Officers got bonuses!
The digital revolution changed all that. The last decade (and, in particular, the last five years) has seen the death of predictable buying behavior and has been replaced with the Individual’s Buying Journey.
Gone are the days when the seller gets to dictate how people will buy their product! Today, the buyer has all the power. Each will follow their unique journey. Some will be short, while others will be inexplicably long. Some will require case studies, while others will require how-to videos.
Don’t believe me? Consider this:
- 73% of global business executives say consumer behavior has changed significantly over the last three years. The same percentage admits they do not fully understand the consumer changes that are underway.
- 8 out of 10 global business leaders believe their companies are not taking full advantage of this opportunity
- According to an Accenture Study, 94% of B2B buyers conduct online research at some point in the buying process.
- According to Forrester, 59% of buyers prefer to do research online instead of interacting with a sales rep because the rep pushes a sales agenda rather than helps solve a problem.
- 63% of businesses say their top overall marketing challenge is generating traffic and leads.
- 71% of businesses say their top sales challenge is closing more deals.
Perhaps the most telling piece of data:
- The average tenure of a Chief Marketing Officer is down to 42 months. This is down six months in the last two years.
Welcome to the new world of customer acquisition!
A Brief Introduction to Lean Customer Acquisition
Meanwhile, the startup world was changing. Books like The Lean Startup taught entrepreneurs that failure was inevitable. To be successful, you needed to fail fast.
Out of the startup world, a small group of marketing focused engineers started to try to engineer virality into their products. Hotmail famously added a bit of text to every email sent from a Hotmail account telling people they too could get a free Hotmail account. In Silicon Valley and other startup hubs, every company needed a Growth Hacker on their team whose job it was to make products go viral. These marketing engineers were obsessed with data and obsessed with rapid growth.
The term Growth Hacking fell out of favor as quickly as it arrived. It turns out, it is exceptionally tough and rare to “hack” growth. One does not make something go viral. Data-driven marketers dropped the “Hackers” term and kept the title of Growth. Coca Cola, one of (if not the) most dominant brand marketing-driven companies of the last 100 years, recently fired their CMO and hired a Head of Growth.
Despite the smart tactics of Growth teams, in many companies, sales did not increase. In fact, the new data-driven world of growth marketers was often in open conflict with their sales organizations.
“We’re consistently delivering you a bunch of low-cost leads!“, yelled the Growth teams.
“Yeah, but your leads suck!”, responded the VP of Sales.
I have sat through 16 million meetings with this exact argument.
Smart companies realized to be effective, marketing and sales could no longer be treated as two separate functions. Chief Revenue Officers were hired to manage all revenue from beginning to end. How were they to do that? How could one person manage all that work? With how quickly things change, how were they going to be able to win more customers?
Enter Lean customer acquisition. “Lean” is a methodology that helps Chief Revenue Officers, CEOs, VPs and other Clever Executives make sense the most complex selling environment in human history.
The Foundation of Lean
A couple of quick foundational principles.
First, if you can’t measure it, it didn’t happen. In the new game of winning customers, “I think” doesn’t cut it.
Second, but of utmost importance for the Clever Executive: it is important to remember you are wrong most of the time! Your opinion does not matter. My opinion does not matter. The only thing that matters is what we can prove. You will find, as an executive, people will tend to tell you only the things you want to hear. It’s human nature and self-preservation at work. Fight this. Lean means zero bullshit allowed. Check your ego and relish in learning something new.