What can B2B businesses learn from America’s favorite pastime?
Apparently quite a lot.
We are talking about the book and movie “Moneyball”. Based on Michael Lewis’s book from 2003, it tells the true story of the Oakland A’s baseball team and the terrible seasons they had. When the movie starts, the General Manager, Billy Beane (played by Brad Pitt), is in a conundrum. Some of his best players were leaving for more lucrative teams, the club has no money to pay for top tier players, and the team as a whole seems to have no future.
A meeting with a geeky economics grad from Yale (in reality it was Harvard) changed it all. “People who run ball clubs, they think in terms of buying players.” Says Peter (Jonah Hill). “Your goal shouldn’t be to buy players. Your goal should be to buy wins. And in order to buy wins, you need to buy runs.”
He was made assistant GM and together they set out to revolutionize the way players are recruited.
It wasn’t an easy battle. “This is how it’s done in baseball” or “he looks like a baseball player” were the operative phrases in most of the club meetings discussing players. The system of scouts ‘feelings’ who is a good ball player and how he will fit into the team, was refusing to change.
But these two stuck to it and prevailed. And despite all the dire predictions, the Oakland A’s went on to have their best season ever.
How did they put Peter’s suggestion into action? Their first mission was to focus on recruiting and starting players with a high on-base percentage. Instead of relying on batting average, they focused on replacing their player’s with players with good OBP.
By doing that, the two elevated one of the less glamorous metrics in baseball – the ‘walk’ (when a batter takes four pitches outside the strike zone he advances to first base without an ‘out’).
More walks equal getting on base more, which amounts to scoring more runs and winning the game.
The formula proved to be right on the money. The team won 20 consecutive games and finished the season with 103 wins and 59 loses.
Now, does it apply to B2B sales and marketing?
B2B marketing and sales teams face challenges that are not that different from the challenges facing the two heroes: not enough money, lofty goals, and pressure to win.
The movie blends themes that are familiar to us all; competition, analytics, an underdog who wins at the end and so on. But most of all it’s about two experts from two different fields who come together and changed things. It’s a story about partnership.
The Power of Partnerships
The two basic matrix for marketing and sales are Opportunities Created and Opportunities Closed. Dividing them, with the Closed Opportunities being the figure on top, you get your Win Rate. If you have opened 10 new opportunities every month and closed 5 of them, you have 50% Win Rate which is very good. If you open 10 opportunities and close only 1, your success rate is 10%, which is not so good.
What is the OBP in the B2B sales world? It is getting more ‘walks’. Going into partnership with another company has many benefits:
- Having a partner endorse you, or facilitates contact to a decision maker – that’s a ‘walk’.
- Asking a partner from another industry for help in his industry and getting instant credibility, in his industry, because of the partnership – that a ‘walk’.
- Investing in your partner’s career and making their success important to you, later “raising with the tide” – that a ‘walk’.
“Three of the largest deals we closed recently included highly influential strategic alliances. Our experienced sales team outsourced the implementation and consulting services revenue to a partner, while earning software revenue at 3x the average enterprise deal size. Each deal included a motivated partner working hard to make it happen. That’s Moneyball.” Writes Sam Harkness in a Marketo blog post about B2B marketing.
Some more Moneyball tips for winning with partners:
Learn how to give, then you will get
All the time and money you spend on project A, you are not able to spend on project B, so it is important to evaluate and balance partner interest with your own. Building incentives for partners to help you, while sometimes giving up some of the revenue, may give you the opportunity to build Brand Advocates. Advocates can dramatically increase the scale and the notoriety of a company. Think how more effective your marketing will be if on top of your own sales people you are actually using your partner’s sales force. This incremental multiplier can be a great asset when you are competing against companies three times your size.
According to a research of over 1000 businesses from a variety of industries the opportunity to earn rewards and incentives has a great influence on partner’s sales efforts and both of yours bottom lines.
Specialization and focus
For every company there is a point of diminishing returns when talking about hiring. It’s impossible to hire people for every needed specialty in any industry, anywhere in the world. What you can do is partner with an expert in this field and incentivize him to help you. Instead of spending six figures on one person working full time, you can have the partner’s sales force help you.
The do’s and don’ts
There are 3 important elements to any successful partnership:
- Identifying and recruiting specialized partners
- Nurturing partners
- Establishing incentives for both partners and rallying behind the “better together” strategy.
Here we can go back to Moneyball. What would have probably happened in every other Hollywood movie? The two partners become life-long friends and soul mates. Not here. They are different people, from two different cultures. They fight together, it doesn’t mean they have to be mashed into one another. They lead separate lives, each with his own challenges.
Your meeting with potential partners should not be judged if it was ‘friendly’ or not, or if you see everything the same way. This is particularly true among prospective partners.
You can expect as much as 80% of the meetings to go nowhere. So don’t get too attached.
When you approach a business to partner with, have some prerequisites and do research. A thorough automated certification program can help filter all those false positives.
Start with a baseline and try different metrics; average deal size, customer retention, time to close etc. A good partnership should promote specialization, balanced investment and revenue contributions that go both ways. Does your partner share the same long term vision as you? Are they willing to dedicate staff to your business?
How to start looking for a partner
Identify a target list of companies that provide product or service that can complement yours. Your potential partner list might not be so obvious – so like in Moneyball – think outside the box. The fact that things were “always done this way” doesn’t mean it has to stay the same.
Look for companies that provide something you don’t, something that comes up when you are doing your work. Uber and Google Maps partnered. A company that is not a competitor but potentially be relevant to your customers.
Talk to your sales people. Is there a company that comes up when talking to customers? Are there some accounts you have that another company is providing services or goods for? Are you marketing to the same audience?
But the main take-away from the movie Moneyball is about technology.
Through detailed analysis of every imaginable baseball statistic, the two uncovers the true underlying drivers of success for a baseball team. It showed that data driven decisions result in significantly better results than gut feeling or intuition or how a player should look like. That transformation happened in baseball about 15 years ago and B2B selling is undergoing the same transformation for the past 5 years.
Sales software has taken a leap in the last few years. CRM software and lead generation tools have become the key players in sales offices. They enable the B2B salespeople track their pipeline, and better understand on which stage of the process the clients are currently at.
Metrics enable salespeople to explore new channels and measure the results. Metrics tell you what efforts you can save on and informs you where to focus your attention and budget more effectively.
The exceptional growth in data about companies and prospects and the ability to extract actionable insight through predictive analytics enables sale forces to achieve dramatically higher sale productivity. Sales intelligence enables reps to know who to contact in a certain company, when to contact and how to engage.
What put our movie heroes apart from the rest was their ability to look past the big names and high salaries. They looked into a repeatable, measurable, and not too obvious result producing strategy, which resulted in a turnaround for the team.