By the end of the 19th century, the Buffalo-based, Larkin Soap Company, had changed the world of sales and marketing thanks to the innovation of Larkin’s first salesman, Elbert Hubbard. The brother-in-law of owner, John D. Larkin, Hubbard functioned as the company’s de-facto “Chief Marketing Officer.” Hailed as creator of one of the most successful marketing strategies in history, Hubbard employed strategies like, giveaways, trading cards, direct to consumer model, and demand generation. His efforts enabled the Larkin company to expand greatly, and eventually rival Sears and Roebuck Co. Also known as founder of the Roycroft, Hubbard cemented his place in the history of the furniture and artisanal markets.
Under the leadership of Elbert Hubbard, a young boy of 13 was hired as the first, and only office-worker. His name was Darwin Martin. While employed at Larkin Soap Company, Martin is credited with creating an innovative card catalogue system, which could be called the world’s first Customer Relationship Management system (CRM) the precursor to Salesforce.
One of his other assignments was to employ an architect to design a new administrative building. His brother who was residing in Chicago at the time recommended a young architect, Frank Lloyd Wright.
What the team of Hubbard and Martin achieved during their time at Larkin Soap Company was create a marketing-exclusive, go to market strategy, and completely eliminated their salesforce.
This story is important for two reasons: one, to reinforce the fact that Buffalo has a long history as a center of innovation, especially within sales and marketing, and second, to give an example of how some of the best sales and marketing innovations have been reactive in responding to changing buyer behavior.
The purpose of this series is not to advance a specific tool, technology, or service, but instead to increase conversation about the different philosophies, strategies, and industry trends happening today in sales. This could include information on how companies can scale their revenue and customer base, whether you are selling a .50-cent widget direct to consumers or a $100k SaaS solution to large corporations.
About a year ago, my partner and I launched our own company which was going to be heavily reliant on software providers and required a large investment in tools and services. We spent hundreds of thousands of dollars on products, services, and software without ever speaking to a salesman. I knew what I needed and researched products on my own using their own content, as well as sites like Quora, G2 Crowd, and Capterra. I also relied heavily on my network of contacts, discussing their experience and used back channels like the email list-serve ModernSalesPros. I’m not unique in this, and therein lies the existential threat to organizations here in Buffalo and around the world: buyers are relying less and less on sales to introduce products or services to them.
Marketing and sales have always reacted to the changes in buying behavior, and today buying behavior is changing at an ever-accelerating rate. I want to insert an important caveat here, there is no universal approach or technique in sales and marketing. In this age of outrageous headlines there is a move toward lumping all sales and marketing into a single bucket. Randy Frisch, CMO at Uberflip published a great article recently with the headline “F#*k Content Marketing—It’s Time to Start Marketing Your Content” These types of articles are aiming to maximize clicks which minimizes actual value to readers.
If you’re selling a product vs. a service, if your Business to Business or B2B vs. Business to Consumer or B2C, if you’re selling to IT vs. selling to HR, if your tool costs $20k per year vs. something that costs $20 per month; what will work for you and your buyers may be in a very different place than others. Not to mention, that a Director of IT Engineering will consume content and make decisions very differently from his own CIO, much less the CMO. I say all this to make the point that there is no universal truth in marketing or sales, there are general trends (such as buyer behavior, general content consumption, changing buying channels, etc.) and specific facts based on specific segmentation, but I encourage anyone to do their own research based on their specific market and beware anyone that tries to over-generalize this outrageously diverse topic.
There is a statistic bandied around that buyers, on average, are 57% of the way through the buying process before they ever speak to a sales rep. I still see this listed as the latest research, but I remember this stat being called “the latest research” eight-years ago so I can’t speak to its current relevance. I will say that in a general sense the key takeaway is on the role of sales and marketing, but I’d like to make a quick point. If I’m in the market for an email automation tool, or I’m in the market for hosted cloud services, this statistic will be very different. This speaks to my point that statistics should always be taken with a grain of salt.
If you are trying to sell any product or service, I would highly recommend that you start with the question “How am I going to differentiate my offering within a very crowded marketplace?” To answer this question you need to understand your market, your competition, and your ideal customer profile (ICP). How you track and define your ICP is vitally important to your ability to scale revenue, and that’s where I’ll begin.
ICP’s should be split into two pieces (at least in B2B) the account and the contact and there has always been vague firmographic definitions for both. As an example: If I’m selling telephony services, specifically VOIP, normally my account ICP will be defined by geography, size, and vertical. I sell within WNY, to small companies with less than 50 employees, and office settings (so not coffee houses or hair salons etc.) That defines your account ICP now, who within that account is your ideal person to sell to, usually it will be defined by title in this instance it will usually be either the president of “head of IT” if they have one.
Another key metric you will want to know is your Total Addressable Market (TAM). In this instance, your TAM would equal your maximum revenue per account times the number of offices with 10-200 employees in WNY. I ran a very cursory search using LinkedIn Sales Navigator (Hoovers is an alternative, as are several other sources) and found 3,202 companies within the Buffalo/Niagara region that fit into this ICP. If my solution costs on average $3,000 that gives me a TAM of a little more than $9m. If I were to absolutely own my market with 100% share, I could expect around $9m in revenue but I should really shoot for a 5% share or so to start. Obviously, the best path to scaling revenue is to expand your TAM in conjunction with improving market penetration, and I’ll discuss that in the coming articles.
The larger your target organizations get, and the more complex your solution, the more difficult it is to define your ICP by the data points of yesterday. But this is difficult, and there are numerous tools out there to help but it takes some understanding. If I’m selling an IT solution, I may have been focusing on Director or higher of IT, instead I should be focusing on the individual tasked with migrating servers to a cloud-based system. How can I find that individual if there is no universal title? The current overall trend in marketing and sales is to view ICP, not by title or by geography/size/vertical, but through contextual modeling. Companies like node.io, Datanyze, Clearbit, Madison Logic, MarianaIQ, and Everstring focus on identifying target companies by different data points like buying process, what technology do they have installed, soft skills, and more.
Next week I’ll discuss what leading-edge companies are doing to increase their TAM and market share. Please feel free to shoot me an email or comment if you disagree or have any questions. I’m sharing my experience, not facts, and am always on the lookout for a good conversation! I look forward to reader comments, and hope to foster an online discussion with this series. So please, feel free to comment below. My hope is the eventually the sales and marketing community will come together in WNY, whether from an incubator, university, or private company. Currently, there are almost 150 people registered for the first SmarTech Buffalo event, on Thursday, March 15, and I hope it leads to even greater things for this region!