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Monday, September 20, 2010

Probability Marketing

SPOC
We're results junkies, but the only thing we like more than results is observed, hard data. Why? Because campaign data allows us to apply statistical models to our sales and marketing pipeline framework, affectionately nicknamed SPOC (pronounced "spock").

"SPOC" stands for Suspect / Prospect / Opportunity / Customer. Using campaign data, we can begin to predict (assign a probability to) how leads will progress from the Suspect zone all the way to the Customer zone. We call this transition percentage, a "Conversion Rate." Once calculated (or estimated for early campaigns), we can determine a sales and marketing budget that will generate a positive ROIm as well as the most efficient marketing mix.

SPOC, for all it's complexity, is simply a Probability Sales & Marketing model. The value of Probability Marketing is marketing dollars and resources can be deployed cost-effectively, results are predictable, and employees are motivated and aligned with the larger corporate objectives.

The near-term results of Probability Marketing are shorter sales cycle times, higher conversion rates, and higher average sales prices.

Effective sales and marketing starts with quality (from lead qualification) and then quantity (from increased campaign frequency). In other words, it's more cost-effective to "Aim Small, Miss Small."

Beyond the basic principal of Probability Marketing here's a few things the model proves time and time again:

  1. Start by creating marketing assets (qualified house list, portals, downloads, videos, etc.) and sales assets (ROI and TCO calculators, case studies, testimonials, etc.).
  2. Never put a sales person "in front of" a prospect with less than a 33% chance of close.
  3. Streamline the sales, marketing and closing process. As they say, never make it difficult for customers to give you money!
Don't Be the Used Car Salesman

The final big idea of Probability Sales & Marketing is breaking with the traditional "used car salesman" model. Classic sales training is all about the Art of Persuasion—getting a prospect to buy by manipulating the 5 steps in the buying decision. Probability Sales & Marketing, instead, uses the Art of Agreement and Commitment. Only high-probability prospects - those willing to commit step-by-step to the buying process - are worthy of sales and marketing's time.

How do you determine who these "high-probability prospects" are? It all comes back to Probability Marketing.

Learn more about the Value Equation and Perform Businesses from our friends at the Ephor Group.

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