Understanding Leads with Mark Osborne

Chris Hood (00:00):
Hey everyone. Thanks for tuning in. Business Leads often conjure images of endless list cold calls and mass emails. According to a recent study, 79% of all B 2 B leads don’t convert to sales emphasizing the importance of quality over quantity. In addition, B two B buyer behavior has shifted towards a B 2 C like experience. They leverage information proactively, look for relevant content and expect customized offers. On this episode, Mark Osborne, author of Are Your Leads Killing Your Business and Founder of Modern Revenue Strategies? Joins the show to discuss strategies for generating high quality leads, understanding your customer, and maintaining a laser focused approach to your offerings. Grab a copy of my new book, customer Transformation. This is your essential guide for customer success in the digital age. Learn how to adapt to your customer’s ever evolving needs and revolutionize your business strategy to achieve sustainable growth. Available now on Amazon, Barnes and Noble or my website and to support the show, visit chris hood.com/show. Subscribe to the show on your favorite podcast platform. Follow us on social media or you can email me directly [email protected]. I’m Chris Hood and let’s get connected.

Voice Over (01:35):
Connecting Access. Granted, it’s the Chris Hood digital show where global business and technology leaders meet to discuss strategy, innovation and digital acceleration. 5, 4, 3, 2, 1. Your digital evolution starts. Now here’s your host, Chris Hood.

Chris Hood (02:08):
Welcome to the show. Mark, would you mind introducing yourself?

Mark Osborne (02:11):
Absolutely. Hi Chris. It’s a pleasure to be here. I’m looking forward to our conversation today. My name is Mark Osborne. I work with early stage SaaS Tech and B two B services firms. Basically companies that are working with complex buying committees, navigating a long sales cycle to close large average contracts, and I’m generally working with companies in early stage, so they’ve already got product market fit, so about 500,000 or a million dollars a year in annual revenue, but they’re trying to grow and oftentimes it’s hard for companies at that stage to bring in a full-time marketing executive so I can come in as a fractional C M O and provide that sort of marketing leadership to get them to that next stage of growth. In fact, most of our clients see a 10 x return on their investment, us within the first 90 days of working together oftentimes doubling their revenues or growth within that timeframe. I wrote a book about some of my concepts called Are Your Leads Killing Your Business, which went to number one in 10 plus categories on Amazon and speaks to a lot of the challenges that these types of businesses navigating these types of situations are dealing with, especially in light of a lot of the changes that happen in the marketplace during the covid lockdowns and Sense. And the book has really written in response to how companies can adapt to that modern landscape to really achieve success. So thanks so much for having me.

Chris Hood (03:37):
Great. So the book title is pretty interesting. Your leads are killing your business. Where did you come up with that or share the basic principles of that concept?

Mark Osborne (03:48):
Yeah, absolutely. So if any of your customers that are listening might find that to be a little bit controversial as a statement because leads are the lifeblood of any business, but what I have seen over the last couple decades of working with companies in this space is the right leads are the lifeblood of your business and when you’re chasing the wrong leads and there has become this obsession with more volume, more volume growth hacks and silver bullets and gaming algorithms to get more leads. But what I have seen happen is that companies that are using sort of old school tactics are really sort of capturing the worst leads in the marketplace. And when I call something the worst lead, that 80 20 rule, 80% of your revenues come from 20% of your customers. And so what you want to do is focus your marketing and sales activities on those 20% of customers that are going to make up your 80% of revenues.

(04:49):
But if you’re using outdated strategies or tactics, you wind up sort of dealing with just the lowest percentage of the marketplace and these are customers that require a lot of customization to your solution, require a lot of retooling of the way you sort of deliver, and in fact pull you further and further away from your long-term product buying vision, what the market really wants to buy and what you know is the right solution to deliver for the market. These customers pull you away from that. They don’t renew, they don’t refer, they don’t provide testimonials, and as a result, it really causes a death spiral for businesses that sort of brings them further and further behind the competition. And when you don’t use sort of modern mechanisms of capturing data and using technology to make sense of that data to recognize the best opportunities in the market, you’re not able to really prioritize those leads that really grow your business and you treat everyone the same. And in that way, your leads could really be killing your business and something that I’ve seen happen.

Chris Hood (05:59):
You touched on a lot of things and I want to come back to how businesses, especially startups can be positioned away from their primary goals, but if we were to simplify what you just said into an analogy, it would be like if you went to Google ads and you just said, I want to display this ad without actually defining what the demographic was, or if you said, Hey, I want a hundred random people to be put into a room, and you don’t actually say why they’re in the room and then later you reveal we want to test out a new taco. Well, half of those people could be vegetarians, some of them don’t like tacos.

Mark Osborne (06:37):
It’s similar to that, but a little bit worse actually. So instead if they said they were vegetarians and you were selling a steak taco, you could easily sort of cut those people out. But what we see businesses doing is because they’re not using data around intent or technology to nurture opportunities, they’re wasting tons of resources on people that may one day be a customer, but they’re not ready today and they’re not doing the effective things that would move them through that decisioning process. And even once they became a customer, they would be the worst customer, but because you don’t have effective mechanisms in place to attract the right prospects, those are the only prospects you have. And so you’re wasting your resources against those which really distracts you from your core mission as a company.

Chris Hood (07:31):
And you were just touching on this, that distraction goes into your product and service definition. This is a challenge that a lot of entrepreneurs, small businesses, startups, and definitely in the SaaS market deal with, they have a potential customer who says, yeah, but I really wish you had this feature and we are, oh, let’s go add this feature. And that’s just distracting you from your ultimate product goals. And so many businesses do that and they create these one-off features for one individual without really recognizing or analyzing the data to determine what the mass market is going to be interested in.

Mark Osborne (08:13):
That’s totally right. You’ve hit the nail right on the head, which is, and it comes from this sort of inability to attract the right prospects and then this sort of struggle with accelerating them through the decision process so that you’re left with just the prospects you have. And so then you feel like you have to build a custom solution. You have to do a P O C for them where they’re then going to break apart your solution, ask you to rebuild it in a custom way for them because you don’t have the systems in place to attract those right prospects, those systems in place to move them through the decision-making cycle so that you can actually capture those best opportunities that exist in the market.

Chris Hood (08:57):
Well, some of this is also desperation. If I’m a small business sale sale sale, so we’re going to sacrifice some areas to get the sale, it’s so hard to tell somebody we don’t need the sale. I think there is some balance between telling certain clients no because they may not be a right fit for what you’re trying to build.

Mark Osborne (09:20):
That’s absolutely right. Absolutely right. And where that ability to tell some clients no comes from is by creating systems that allow you to have really differentiated positioning that magnetically attracts the right prospects to you to have data-driven processes for qualifying. Are they really a good prospect? Are they likely to be a tier one ideal customer or not? And if not, to have the confidence to say we’re not going to work with them, or to put them into some sort of a nurture cycle so that they can maintain their relationship with you while they educate themselves, nurture themselves, and become ready to become one of those ideal customers that you can then put all of your account-based marketing or one-to-one efforts against and really get them over the line.

Chris Hood (10:13):
Now we’re talking about smaller businesses. I spent six years at Google and I saw the same bad practices happening at Google in the attempt to sell technology that may or may not have met a specific customer’s needs.

Mark Osborne (10:29):
Yeah, that’s right. It goes all the way up and in fact, in some ways it gets harder and I’ve spent a lot of my career working with Enterprise, working with Google and Meta and Hulu and General Motors and Nike and everybody else. But as enterprises get larger, it becomes even harder to focus on, well, who really is our ideal customer? And to really dig in on what does our customer buy or persona look like and then to sort of proselytize that across the organization so that everyone’s reading from the same sheet. Music gets even harder as you get bigger, but it’s the same issues that a lot of B two B enterprises are struggling with.

Chris Hood (11:13):
So I have a personal opinion here. Obviously when we think about who our ideal customer is, I understand that there’s a lot of what we will call B two B organizations out there. You’re selling directly to a business. However, I just wrote a book called Customer Transformation and in the book for one chapter I spell out that really the premise of B two B has to still include the end user. And if you really think about it, even if you say it’s B two B, that other business that you are selling to is your customer and you should treat them no different than any other customer. And so is there really a B two B because it’s still technically still B two C and more so I think it’s B two, B two C. Now how I want to position this is too often, even from a B two B perspective, you are trying to sell a technology to a consumer of that technology when you are not considering the benefits that that technology is going to provide their customers that B two, B two C, then you’re also missing a substantial opportunity here. It’s no different than if I was to go and say, Hey, you really need this technology because it’s cool technology versus going in and saying, you need this technology because your customers are asking for it, and if you deliver it, you’re going to grow 10 x. Yet we miss this all the time when we stay focused on this B two B concept.

Mark Osborne (12:46):
You triggered two really interesting thoughts for me there. The first is Intel. Inside what they did is Intel focused on the benefit to the customer, which was fast processing speeds, and they did such a good job of taking that to the marketplace that it became a demanded expectation. So Intel was obviously a B two B product, but because they thought through what does the end customer care about, they care about name worthy processing speeds. So they became a requirement to be sort of an upper tier solution as an ingredient in that B two B. The other thing that you reminded me of and made me think of was we talk a lot with our clients about although you are selling in a business concept or context, the people on the other end are still people making decisions and those same sort of interpersonal human characteristics, and oftentimes that includes things like emotion, which we’d like to pretend don’t exist in a B two B environment, but in fact all human decisions are made by emotion. And then we look for logic to back up the decision that we made, forgetting that in that B2B context is really detrimental to your health. And in fact, by thinking through and thinking about that the buying committee and what does your decision maker look like or your technical influencer or your champion and what do they care about on a human level, and then speaking to that in your messaging can really be much more powerful than just dry logic because unfortunately good ideas don’t sell themselves. You have to package it.

Chris Hood (14:34):
Yeah, you outlined anyone who’s selling into B two B, they probably have names and terminologies for different people, the shark and the bear and all these other things to determine who is the decision maker. We all understand that there’s these lengthy processes and governance boards to approve things, and yet again, we get lost in this process assuming that it’s just void of those emotions. And we know though that when you not only attach to the human emotions through that sales process, but introduce the outcomes of that potential sale, no C F O in the world is going to say, why are we spending $1 million if we’re going to generate $2 million? You get frustrated by that process, but you’re not coming in with the right data to back up why that sale can basically accelerate the process if communicated properly.

Mark Osborne (15:32):
That’s right. Well, and you hit on a really good point there too of the C F O has a certain perspective that they care about the end user that might be your champion in this sort of decision-making committee. They might care about something else, what their job is going to be like after they license your particular product or service. They don’t care if it makes the company any more money. They care that it makes their life easier. And so by really understanding your buying committee, you can then customize your messaging to speak to what they care about. The messaging that goes to the c ffo can talk about the financial benefits of using the solution or the efficiency that’s saved and all those things. The messaging that goes to that end user can talk about how it’s going to make their life easier and how it facilitates better work. It’s a really sort of thinking through the mindset of those people that represent the buying committee and then taking your features, turning them into benefits for each of those people, and then aligning your messaging at each stage of that customer journey. That’s really what moves the needle.

Chris Hood (16:41):
Yeah, and again, I think there’s also a relationship, a connection that you have to make that goes to the end user. We were talking about tacos. Taco Bell does not go out and make its own stake, it’s procuring stake from some organization. I don’t know who, because I don’t care because ultimately as the consumer, I want to go into Taco Bell and have a great steak taco because ultimately what they’re trying to do is appeal to that end user building the connection between that internal hiring committee and that end consumer so that they can recognize what that connection is will then further help you when trying to build these campaigns internally.

Mark Osborne (17:25):
That’s right. Well, and also in the business construct a steak taco, if I have a less than perfect one, well there’ll be another meal tomorrow and I can give it another shot. But a lot of times when businesses are licensing software or technology infrastructure, they’re hoping to make a decision that will last at least five years, maybe 10 or more. And so oftentimes they will really get into, well, where are you getting the beef from and what are the cows fed? And they really get into that because once they make a choice, this is going to be the last steak taco they eat and they’re going to eat it every day for the next five years. So they really want to make sure you’ve got the best cows going into that taco. And just as you smartly identified earlier, those companies that recognize that they are an ingredient in their sort of B two B and that value chain and then can promote that to that end consumer of the product, really strengthen their relationship both with their direct buyers as well as the end consumers that are consuming that.

Chris Hood (18:38):
It’s a great way to look at this. When I was at Google, I spent a lot of times on the sales trail and my job was basically to come in and tell some pretty stories and help people understand and make those connections. And one of the best companies out there that really utilize technology, and again maintaining the food theme is Domino’s Pizza. And Domino’s has done a fabulous job of recognizing how technology is ultimately going to serve their biggest purpose. They said, look, we are going to change our focus and bring in technology and serve our consumers because they knew that if they serve the consumers correctly, they were ultimately going to sell more pizzas. And oftentimes I would go into a company and share this story about how Domino’s Pizza transformed their organization, built a brand new culture, and ultimately serve their consumers. The number of times that I had an executive turn and say, yeah, but we’re not Domino’s. If you’re asking me this, then you don’t understand. You don’t get it because it’s not that you have to be Domino’s Pizza. It’s the lessons that you have to learn of what Domino’s Pizza was able to accomplish by making those connections to the end consumer that are critical.

Mark Osborne (19:55):
Yep, that’s right. Well, and using that Domino’s Pizza example, I’m getting hungry here, all us talk about food, but using that Domino’s Pizza example, ill wager that the reason why they leaned into those technologies was because they saw that their customer cared about it. And that’s the truism that your customers from Google should have understood, which is technology can really empower delivering against customer objectives in some really unique ways, but it’s by understanding the customer and what they need that then drives the going out to the market of, well, what technology do we need? What technology is going to allow us to deliver what the customer is looking for in these powerful ways? And that’s the real exciting part,

Chris Hood (20:47):
And I think we can bring this back around to even your book. So we talk about data, that data could be generated from all of these different sources, the end user, the consumer, what are their needs, what are their demands? What are the trends that are happening in the marketplace? What are the trends happening in other industries to then compile it and generate that profile that you opened with that then will generate the right leads for you?

Mark Osborne (21:15):
That’s right. Yeah. And you can bring in, there’s an embarrassment of riches when it comes to data today, and so you can bring data in that allows you to understand the factors that are moving certain industries. And so if you’re serving businesses within that industry and you can see that there was a drop in an indices in their market and in the stock market that day, perhaps that’s some of the motivation that’s sending them to market to look for solutions. So what does that mean about the way that you position yourself and the way that you speak to the way you solve their problems? Other than all of those things can really be brought to bear if you’re using the right technology to make sense of it.

Chris Hood (22:02):
Obviously, everybody wants to talk about artificial intelligence, so how much is artificial intelligence influencing our ability to find the right customer?

Mark Osborne (22:13):
Artificial intelligence is a bit of a misnomer. I’ve been really blessed to work with a lot of data scientists that are doing really amazing things in machine learning and a lot of advanced machine learning frameworks, artificial intelligence from the perspective of a sentient computer that’s making its own decisions and deciding what information to bring in is part of that decision is a little more science fiction at this point. What I do see though is that there are a lot of great models within the data science framework, machine learning frameworks, recurrent neural networks, neural networks, all of those things that you want to use that can help you make sense of the data and help you to say, here’s the data source we could use. Does that improve our decision-making accuracy or not Even just deciding whether or not to use the data as part of the modeling is something that machine learning can do today, which is that’s really powerful and something that didn’t exist not that long ago.

(23:15):
We’re seeing, and I actually, I do a lecture at a local college on machine learning, artificial intelligence and marketing, and one of the macro trends that I see is this rise of the citizen coder, which is you don’t have to be a PhD data scientists anymore to know how to even structure the questions in the way that they can be answered by a machine. You can say, I want to know how to predict if someone is going to buy my product or service. And then the machine will say, okay, well, what are things you think might influence their likelihood to buy? You could say A, B, and C, it’ll go out and find data sources for A, B, and C and then come back and say, looks like A is about twice as important as B and C doesn’t matter at all. You as a expert in your field.

(24:08):
Does that make sense? Maybe we got the wrong data set. Maybe there’s something wrong with the data. It can really guide this type of exploration in a way that didn’t exist that long ago, and you have to have essentially no programming knowledge in order to be able to structure those equations. There’s still some gap. You still need some of that engineering expertise to handle the data and data science expertise to craft the questions in a way that can be answered by the data. But it’s amazing to me how quickly moving and how fast it’s going to be available to just the lay in person to say, I have a question. I think data can help me answer it, and those machines are going to be able to do that.

Chris Hood (24:51):
Yeah, we saw the citizen developer trend start maybe four years ago and a vast increase in what we call no code development, which means you don’t actually have to use code, you can communicate what you need in basic language. What you actually touched on I think is critical, and that is there’s still an element of logic and creativity that has to be put into this. It’s one thing to be able to say, look, go out and find me industry trends for the restaurant industry versus I want to find a correlation between how many tacos are sold and how many sprockets are being produced within the healthcare industry. There’s much more creativity, I think I said it than science in terms of developing with natural language, how we want to see and express data, and definitely AI is helping in that, but that logic is a skill quite honestly, that we are missing in a lot of universities because we’re so focused on teaching. Here’s the process, here’s the history, but that problem solving and logical assessment to create custom queries is a skill that I think we all desperately need.

Mark Osborne (26:21):
It’s true, and actually it goes a step further too. I was discussing this with a data scientist friend of mine, PhD, went to a top-notch program and then has worked at really sort of the bleeding edge of this space for the last several, many years, but what he has described is even worse in that very often when someone graduates from a master’s or a PhD program in something like data science, their first move is, well, let’s go work for a blue chip player. And unfortunately when they go to work for a blue chip player, that blue chip player is doing things 10 years ago, they’re not quite on that cutting edge. And so then these people are learning the basic concepts in school, coming out of school, and then learning really sort of antiquated approaches and then believing that that’s what it’s supposed to be and that that’s actually the way that you’re supposed to do the job and rising to positions of leadership. Then companies are even going to earlier startups he was describing as there’s a whole miss of people that are given tools and then taught to go creatively apply those tools, and that’s really where there’s going to be a real separation between sort of the haves and have nots when it comes to data scientists that know how to be creative versus those that just sort of know how to hammer in a nail.

Chris Hood (27:49):
I’ll give you a stat. It’s not a big stat, but it’s basically for me personally, every day I receive a request to be on my podcast from men, I’m using air quotes, an expert in artificial intelligence.

Mark Osborne (28:04):
And what’s funny, this goes full circle to something we talked about earlier, is the reason why chat G p T is creating this sort of seismic shift in the marketplace around AI is because it feels human. And so it’s that human nature that allows us to connect with the technology and then to have an emotional component to it and to think about it that way and to anthropomorphize it in a way that it becomes really attractive. And that goes back to that idea of even if you’re in a business context, it’s still a human. It’s still a person that’s making a decision.

Chris Hood (28:41):
And speaking of connections, how can people connect with you?

Mark Osborne (28:45):
Yeah, absolutely. So first off, I want to give an offer to all of your listeners. Actually the first 50 that go to modern revenue strategies.com/free download. A copy of my book is there with a number of calculators templates. I’ll even send some follow-up videos where I go deeper into some of the concepts from the book all for free. So happy to share that with the first 50 listeners of yours that go there and download that. And then you can email me Mark with a [email protected]. We’ve been doing a lot of work recently with companies to kind of just help them get their feet underneath them, and we’ve seen some statistics that a company that has a revenue plan is four x more successful than those companies that don’t. And so rather than make it super complicated, we can spend an afternoon unpack your highest priority objectives, where you’re going to see the biggest return on investment, put together a 90 day revenue plan that can get you there in those next 90 days for companies. And like I said, most of our clients see about a 10 X R O I within the first six months of working with us.

Chris Hood (29:56):
Mark, I appreciate it so much.

Mark Osborne (29:58):
Yeah, it’s been a real pleasure. Enjoyed our conversation, Chris.

Chris Hood (30:01):
And of course, thanks to all of you who are listening. If you like what you heard, please subscribe to the show on your favorite podcast platform and leave a review. Your feedback helps us improve and grow, and if you have any questions, comments, or ideas for the show, you can connect with us throughout social media and online at Chris Hood Show, and please share this episode with your friends, family, colleagues, or anyone else looking to grow their business and start their own digital evolution. Until next week, take care and stay connected.