Posted by Bob Apollo on Thu, May 13, 2010
There’s a short article in the latest McKinsey Quarterly on “the basics of business-to-business sales success”. It captures the conclusions from their survey of more than 1,200 purchasing decision makers in small, medium and large organisations across the US and Europe who are responsible for buying high-tech products and services.
When McKinsey asked them what drove their buying decisions, although these buyers might have initially suggested that price was key, the two most important factors actually turned out to be product/service features and the overall sales experience. No great surprise there, probably.
Destructive sales behaviours
But then the question turned to the “most destructive” sales behaviours – the ones that were likely to cause vendors to lose an otherwise winnable deal. And that’s where I become concerned that the survey – although useful – may not be reflecting the complete picture in the complex high-end B2B sales environment in which most of my clients operate.
According to McKinsey, the greatest sales sin was “too much communication” in person, by phone or by email, followed by lack of knowledge about either their products or those of their competitors. More than 6 times as many respondents complained of “too much communication” than those who complained of too little contact.
Can you over communicate?
So how are we to interpret this data? First, I need to introduce the caveat that the survey appeared to span simple to complex products, and I think we all know that complex sales have important nuances that don’t apply to commodity purchases. Second, the number of options open to those surveyed seems to have been restricted.
But even with these reservations, the conclusion that you can over communicate with your prospect appears troubling in a world of multiple touch points. So I went back to the quantitative buyer research I’ve conducted in behalf of B2B clients – all of them involved in high-value complex sales – and I think I have at least one probable explanation.
Ensure that your prospect feels they are learning something
In almost every conversation with people involved in the B2B buying decision making process, I hear something along the following lines “for as long as I’m learning something, I’m prepared to listen. But as soon as I detect a sales pitch, or feel I’m being chased, I switch off”.
So I’m coming to suspect that the real problem is not the frequency of the communication – but the relevance of the message to the buyer. Repeatedly contacting the buyer to ask if they have made a decision yet is likely to be counter-productive. But sharing some potentially valuable insights with them is likely to be taken in a completely different and more positive light.
Building rapport - ensuring relevance
So when I’m coaching sales people I strongly advise them to build a level of rapport with their prospects that allows them to understand what they are interested in – and to selectively identify insights and news items and to share learning from other similar customers that is likely to be of interest to their client and can help to sustain a continuing dialogue.
So – do you think that it’s possible to over-communicate with prospects, and what techniques have you found to avoid being seen as a bore?
Posted by Bob Apollo on Fri, May 07, 2010
As we emerge from the downturn, it’s clear that we’re going to have to find new and better ways of reaching and satisfying our customers. The May 2010 edition of the McKinsey Quarterly reports that “the way businesses buy from and sell to each other is changing”.
No great surprise there. The article explores three trends that McKinsey’s analysts heard from senior sales executives. Now the nature of McKinsey’s sample is such that the results reflect the experience of some of the world’s largest and best established companies – but my own observations suggest that a growing number of successful up-and-coming organisations are already embracing their recommendations.
The “end of the road warrior”?
One prediction in particular caught my attention. Under the heading “the end of the road warrior”, McKinsey pointed out that many sales organisations have built new, lower cost channels to serve smaller customers. But siloed approaches in which low-value deals are served through a low-touch channel and high-value deals are served through a high-touch direct sales operation are proving - with good reason – to be unnecessarily rigid and increasingly ineffective.
Part of the reason – as McKinsey point out – is that many of the stakeholders and decision makers involved in the buying process have become more relaxed about where and how they get the information they need to support their decision-making.
Time for a blended approach...
For high-value products with complex and lengthy buying cycles, it’s clear that “one-size-fits-all” go-to-market models are hopelessly inadequate to serve today’s buying behaviours. But it’s equally apparent that rigid demarcation lines that force buyers down specific sales paths according to the value and perceived complexity of their transaction aren’t satisfactory either.
Surely it’s time for a blended approach – one that enables prospects to get the information they need in order to advance their buying process through the medium that they feel most comfortable with. Rigidly distinctions between inside and outside sales, or direct, indirect and web-based channels aren’t going to help. Today’s most progressive sales and marketing organisations are thinking “outside in” around how best to facilitate each prospect’s buying decision making process rather than “inside out” around how it might be most internally convenient for them to organise.
Establishing multiple touch points...
We need to establish multiple touch points that can satisfy our prospects and facilitate their buying processes. Sometimes our prospect’s needs might be best served through face-to-face interaction, at other times through a remote conversation, and at still other times through their ability to “self serve” the information they need.
Our decisions need to be guided by a deep understanding of how – given the dynamics of today’s buying environment – our prospects prefer to receive the information they need during each phase of their buying process in order to facilitate a decision to move forward with us to the next stage. And, of course, we need to be guided by an appreciation of the costs to us and the value to our prospects of each mode of each interaction. The goal must be to provide the greatest utility to our prospects in the way that makes the best use of our resources.
Aligning compensation with desired behaviour...
It’s likely that many people could contribute to a successful sale in this new blended model. And knowing - for sales people in particular – that compensation strongly influences behaviour, it’s important to think through the implications of a fair compensation model that motivates winning behaviour.
Just as the first past the post voting model seems to have failed the British electorate, simple compensation models that encourage traditional “it’s my deal” behaviours are likely to be counter-productive. Successful organisations seem to be incorporating incentives that reward collaboration and a shared contribution to sale success.
So – is the era of the road warrior really at an end?
Yes and no. We are certainly observing a decline in traditional go-it-alone, sales heroics based, road warrior behaviours – but we’re also observing great success in organisations that have successfully created a blended model in which face-to-face interaction is retained where it delivers value to both the prospect and the vendor, and is complemented by alternative methods of interaction where they better support the buying process.
Effective use of technology is clearly a critical factor – to support both remote and self-service interactions. And there’s no doubt about the attraction of reducing travel costs and avoiding the suffocating and unpredictable grip of Icelandic volcanoes. Complex, high-value sales will still depend on the power of personal interaction. But that power will be amplified and focused through the intelligent use of multiple touch points.
Posted by Bob Apollo on Wed, Apr 28, 2010
Your customers, and your prospects, have opinions - and they are fascinated by the opinions of their peer groups and others they have come to trust for advice. They no longer have to rely simply upon the views of people and organisations they already know – our networked world has made it easy for them to seek and share opinions on a global scale.
The term “word of mouth” marketing is something of a quaint misnomer. One-to-one verbal communication is only one of its' manifestations. The phrase is now commonly (and, I think, appropriately) used to describe customer-to-customer communications across a variety of media that share a common characteristic – the participants have no direct personal economic interest in the information they are exchanging, simply a desire to share what they have learned for the common good.
Time to shove “push marketing” to one side...
As the April 2010 issue of the McKinsey Quarterly points out, customers have become increasingly sceptical about traditional “push” marketing techniques and prefer to make their purchasing decisions based on information that is independently sourced, rather than what the vendor or their sales person tells them. Whilst the McKinsey article has a primarily B2C perspective, the principles are equally - perhaps even more - relevant to the B2C environment.
Word-of-mouth particularly critical in new markets...
One conclusion, in particular, really resonates - and the implications could be profound for B2B marketers. McKinsey identified a significant difference in the power of word-of-mouth between mature and new markets. Although advertising and previous product usage continued to be the primary drivers of consideration in mature markets, word-of-mouth was the most important factor at every stage of consideration in new markets.
Let’s consider the implications for a moment – if you are involved in a new, innovative or disruptive technology, or if you are competing in new markets where you have to create, clarify or elevate your prospect’s needs before you can satisfy them, the quality of the word-of-mouth that surrounds your company and your products and services may now be the biggest single influence on whether you get considered, whether you get evaluated, and whether you get chosen.
Amplifying word-of-mouth equity...
And note that it’s the quality of the word-of-mouth, more than the quantity that affects the power of the communication. McKinsey’s research showed that a high-impact recommendation from a trusted source conveying a relevant message is up to 50 times more likely to trigger a purchase than a low-impact recommendation.
The authors go on to identify three components of word-of-mouth equity: what is being said, who is saying it, and where they are saying it. Let’s consider each of these briefly:
- What is being said is the foundation of effective word-of-mouth marketing: we need to find and focus on the elements that most influence buying decisions
- Next comes who is saying it: as McKinsey point out, the receiver must trust the sender and believe that they have relevant experience for their comments to be valid
- Finally, where they are saying it, because the environment within which the comments are being circulated has a considerable impact on the power of the messages
Applying this to the B2B environment...
We can clearly learn from these B2C experiences and best practices. So how do they change the agenda for those of us who are focused on the B2B environment? Here’s how I’d recommend you might amplify your word-of-mouth:
- Be clear about your prospect’s primary considerations when they start searching for solutions. Conversations with both your installed base and recent new customers – and specifically those in your “sweet spot” – can help. What were the things that were most important to them as they researched the market? What were the trigger events that caused them to start looking?
- Identify the trusted sources that your current customers and prospects rely on for insight and advice. Are there particular organisations or individuals that stand out? How important are analysts, journalists, trade bodies, or their other existing suppliers?
- What about their networks – formal and informal, online and offline? Are they members of relevant trade or professional organisations? How has their network landscape changed, and how do they expect it might continue to change?
You’ll find that you customers and prospects appreciate being asked. They might well be intrigued as to why you are asking. And I can guarantee that you will lean much that is of value.
Why this is worth it...
There’s a key reason to believe that mastering word-of-mouth can establish compelling competitive advantage: the ability for any vendor to outperform their peers in traditional marketing is limited, because the gains from superior performance in a broadly-mastered discipline are slim. But with so few companies truly mastering word-of-mouth marketing, the opportunities to dramatically outperform your competitors by mastering this new discipline are truly profound.
Are you deliberately factoring word-of-mouth into your B2B marketing programmes? I’d welcome the chance to learn from your experiences – and I’d be happy to share what I’ve learned. You can contact me here.
Posted by Bob Apollo on Wed, Aug 12, 2009
The latest McKinsey Quarterly carries a great article on the consumer decision journey - and shoots holes in the now outdated “sales funnel” metaphor. Whilst the piece focuses primarily on B2C buyer behaviour, our own observations suggest that many of the principles are equally relevant to the process of B2B buying.
The authors explain that the linear process concept implied by the “sales funnel” – although attractively (and deceptively) simple – no longer reflects the complexities of today’s customer decision journeys. It fails to capture the many touch points and two-way interactions that are a consequence of an increasingly well-informed, networked and discerning prospect community.
Ease of access to internet information, and the increasing importance of word of mouth, recommendation and reputation in the B2B buying process has transferred information power into the hands of the prospect. It’s no longer unusual for the group of potential solutions being considered to expand, rather than narrow, at some stage in the decision journey before the choice of what (or if) to buy is made.
Trigger Events
McKinsey highlight the importance of trigger events – something we’ve written about before – that kick-start the customer decision journey in the first place. As we’ve pointed out, in the world of B2B, these trigger events can be internal to the organisation (such changes in staff, responsibilities or circumstances) or external to the market (such as major changes in technology, legislation or the balance of competition).
At first the prospective buyer may either be unaware or unconcerned – but then something happens (the trigger event) to raise their awareness that they have an issue that they need to deal with – and the search for a solution gets underway. McKinsey see the B2C process as a circular, rather than a linear journey, with four potential battlegrounds where marketers can win or lose: initial consideration, active evaluation, closure through purchase, and post-purchase.
These are closely analogous to the four key stages we have identified in the B2B customer decision journey: get connected, get considered, get chosen and get recommended. McKinsey point out that once they have defined an initial vendor consideration set, consumers then tend “shop a category” which may result in additional vendors being included in their evaluation – exactly the behaviour we have observed in B2B, and highlighting the critical importance of being found in the right categories when prospects start searching for solutions.
At each stage in their respective buying processes, both B2C and B2B customers face the choice of continuing, pausing or abandoning their decision-making journey, and adding, continuing with or subtracting vendors from consideration. Prospects of both types seem to have a strong preference for “pulling” the information they need to make these decisions rather than having it pushed at them by vendors, and to place greater trust in third party validation than in vendor messaging.
B2Both
So, although the McKinsey survey focused only on B2C behaviour, we should not be surprised to observe similar things happening in B2C, or to find that McKinsey’s recommendation – that vendors align their marketing efforts with the customer decision journey – are equally relevant to the world of B2B sales and marketing.
We’ll be publishing a series of connected blogs over the coming weeks, but I’m interested in your perspective – what can we as B2B marketers learn from this study? What other parallels have you observed?
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