Posted by Bob Apollo on Sun, Jul 25, 2010
BANT, in case anyone is unfamiliar with the acronym, stands for Budget, Authority, Need and Timeline. It’s commonly used in the sales qualification process. But I’ve come across a few too many situations recently where sales people were routinely rejecting marketing leads because they weren’t “BANT Ready”. I’ve also been pitched by telemarketing agencies offering “BANT-qualified deals”.
I want to explain why that’s a really bad idea.
But before I do, it’s probably worth confirming that I'm thinking primarily about new business opportunities involving complex, long buying cycle product or service offerings here, rather than simple transactional sales that might be concluded in a single call.
Of course BANT matters...
I have no problem with the idea that, before a complex sale can be concluded, budget, authority, need and timeline all have to exist. But sales people need to be creating BANT, not expecting BANT to be served up on a plate for them. Here’s why: by the time budget, authority, need and timeframe have been established, it’s highly likely that another vendor’s fingerprints are all over the deal.
Think back to any unanticipated RFPs you might have received over the past. How many did you win? Unless you manage to dramatically reshape the prospect’s requirements, studies suggest that if you win more than 1 in 20 of such deals you’re doing better than average. The dice are already loaded against you, and you’re just serving as “column fodder” to make up the numbers.
Your sales people need to create BANT not wait for it...
Instead of hoping that fully-qualified, BANT-ready deals can be uncovered, your sales and marketing teams need to be working together to connect with prospects that have unmet needs that they cannot afford to ignore, and for which you happen to have an economically attractive solution. Even better if your actions serve in some way to create the need, or elevate its importance.
Of the four components of BANT, it’s pretty obvious that need has to come first. It’s also clear that identifying a need is your entry point into the opportunity. But your sales people must be careful not to leap straight from an identified need to proposing their solution. They must use the freshly uncovered need to develop the other three factors, and to establish the economic case for change.
Establishing the economic case for change...
Merely identifying a need is, of course, no guarantee that the prospect will do anything about addressing it. First, they must establish an economic case for change. By helping them, you can identify the likely source of budget and authority, and determine whether a time-critical event exists - or can be created.
Start by exploring the consequences of the issue, and identifying who else is affected. Don’t stop at the first-level implications - keep probing and developing your stakeholder map until you’ve built a complete picture. Work with the prospect to flesh out the costs or lost revenues associated with the situation - the more specific the better.
If the issue is relatively new, help them fully understand the potential impact. If the issue has been obvious to them for a while, find out why they haven’t dealt with it before - and what’s changed to elevate its importance now. Ask them how the company goes about making recent similar decisions - and what distinguished the projects that were approved from those that stalled.
If your initial contact doesn’t know some of the answers - and hopefully they won’t - take advantage and secure their help to reach out through the organisation to others who are affected. Remain consultative. Keep asking questions. Refuse the temptation to propose your solution until you’ve helped them establish whether there is an economic case for change.
Back to BANT...
The process of establishing the economic case for change, assuming that one exists, enables you to use the need you have uncovered to understand and influence budget, authority and timeframe. Your pursuit of consequences will enable you to more effectively influence their requirements - and align your capabilities accordingly. And you’ll be in a much better position to determine if the opportunity is real, whether you want to pursue it, and whether you can win.
Don’t wait for another vendor to establish BANT. Don’t brief your telemarketing agency to focus primarily on discovering BANT-ready deals. Don’t let your sales people demand only BANT-qualified leads. Focus on uncovering the need, developing the requirements, and on developing the economic case for change.
You’ll find your company in the driving seat in a far higher percentage of deals - and you’ll shorten your sales cycles and increase your win rates at the same time. Oh, and you’ll be more confident about “no bidding” those unexpected RFPs you had no chance of winning anyway.
Posted by Bob Apollo on Thu, Jul 01, 2010
I’ve lost track of the number of companies who proclaim that they are embracing a “value-added” strategy in order to differentiate themselves in an increasingly commoditised market. They often see it as their best chance of breaking away from relentless pricing pressure and a highly competitive sales environment.
Many have thrown enormous sums of money at trying to move up the solution value chain without successfully changing a sales culture that is still rooted in selling simple product offerings and lacks the experience or credibility to deal with the buying processes that are associated with evaluating complex solutions.
Value-added - or cost-added?
So why do so many of these “value-added” initiatives manifestly fail to deliver the hoped for results? And why in many - maybe the majority - of cases, do the initiatives turn out to be nothing more than “cost-added” strategies that only serve to further depress the profitability of the organisation without actually moving the dial when it comes to sales win rates?
In my experience, most of these initiatives make no attempt to confirm that their various so-called “value-added” activities have any meaningful value to the prospective customer, or are likely to positively influence their behaviour. In fact, all-too-often they reflect the misapplied imagination of a product marketing manager about what matters to customers they have spent all-too-little time trying to really understand.
It's what the prospect is prepared to pay for...
I propose the following test of value added: “that which a well-qualified prospective customer proves by their behaviour they are willing to invest their time or money in, which materially advances their buying cycle, or increases the chances of them making a positive buying decision”. In other words, we shouldn’t be doing anything that a prospect isn’t prepared to pay for with their time or money.
Of course, there is a big problem implementing this thinking in an environment which is focused primarily around a vendor’s sales process. But when you turn the telescope around and look at matters from the perspective of the buying process, and what it takes to persuade your prospect’s decision making team to move forward from stage to stage, you can much more easily identify where the real value added lies … and where all the potential sources of wasted effort might sit.
Are your "value-added" efforts wasted?
Take a look at your sales and marketing actions? Can you identify where and how they add value to your prospect's decision-making process? And if not, how much more effective could your organisation be if you saved that money and effort or re-purposed it to a better cause?
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 Thu, Apr 01, 2010
In Bill Clinton’s successful 1992 presidential election campaign, a sign famously hung in his Little Rock campaign headquarters with the following simple message: “it’s the economy, stupid”.
In today’s risk-averse buying climate, the message to ambitious B2B sales professionals seeking to win the votes of their prospects might have a familiar ring: “it’s the economics, stupid”.
Rational, emotional or financial?
I don’t mean to suggest that rational or emotional factors are irrelevant to high-value B2B sales, but the involvement of multiple stakeholders and the nature of the decision making process means that economic factors - and financial language - play a central role in justifying most buying decisions.
If companies are to invest in resolving them, issues need to be associated with economic consequences, and by and large this revolves around avoidable costs or incremental revenues. Until and unless it is compellingly obvious that organisations can make or save significant amounts of money, they are unlikely to spend money on making a potentially risky change.
Return on Investment isn’t enough
Even believing that there is a strong return on investment (ROI) isn’t enough to ensure that the need to change will be accepted or that the buying decision will be approved. No matter how strong the project ROI appears to be, it never exists in isolation. It will always compete for funds against other (often completely different) projects or the attraction of simply keeping the money in the bank.
ROI models are based on assumptions that bias the conclusions (whether the assumptions are good or bad may depend on whether the vendor or the prospect calculated them), but they rarely take account of the execution risk that is associated with any change. Some projects deliver the desired outcomes, some exceed their goals, but many fail to achieve anything like the promised results, and your stakeholders are factoring this – whether formally or informally, consciously or unconsciously – into every significant decision they are called upon to make.
The least risk option
There’s a significant body of research suggesting that B2B buying decision teams are strongly influenced by the desire to mitigate risk when deciding if and how they need to implement change programmes (which, let’s face it, are what most significant purchases of complex solutions involve).
So it’s not enough for an organisation to emerge as the favoured vendor – they also have to be perceived as the least risk of all available options, including the all-too-popular decision to “do nothing” about the problem – at least for the moment.
The consequences of inaction
So it’s clear that having a compelling ROI – though necessary – isn’t going to be sufficient to win deals in today’s climate. In addition to strong benefits, vendors have to ensure that they help the prospect’s stakeholders identify, articulate and elevate the consequences of inaction. The consequences of inaction are all about what is likely to happen if the status quo was allowed to prevail.
So some of the most important questions your sales people can and must ask include “why is this issue important to you now?”, “have you tried to address this issue before, and what were the results?”, “what would happen if you failed to resolve this problem now?”, and “who else would be affected if the current situation continued?”.
Where’s the value?
These are thoughtful questions, and frequently stimulate the prospect to think differently about the issue they have described to you. They often help you gain access to other stakeholders. But you should consider it a huge red flag if despite your help and after due consideration your prospect is still unable to articulate significant economic consequences of failing to address the issue.
Even if they are keen to continue the conversation, unless you can use the consequences of inaction to elevate their need from merely interesting or important to urgent, there’s little likelihood – no matter how positive your conversation – that the deal will close any time soon.
Of course, this is not a reason to abandon the prospect – simply to recognise that there is still work to be done to educate them, and/or that you may need to wait for, or try to create, a trigger event that will serve to establish clear economic benefit, urgency, and the need to take action.
Final thoughts...
Take a critical look at your sales pipeline? How many of those opportunities are associated with a clear economic impact that has been acknowledged by the prospect? How many of them are associated with clearly defined consequences of inaction? What does this understanding do to your sales forecast? And how can you help your sales people, and your prospects, to eliminate risk and create an unimpeachable (back to Bill Clinton again) case for change?
Posted by Bob Apollo on Tue, Mar 30, 2010
Is your offering a discretionary purchase for your customer? Do you often find yourself having to create needs? Does your true competition include not only other similar vendors, but also other completely different projects, and the possibility that the prospect will decide to “do nothing”?
Are your sales pipelines clogged up with opportunities that have expressed interest but now seem to be going nowhere? Do deals get stuck at critical points in the buying cycle? And are your sales people reporting that their “usual suspects” are nearly ready to close – quarter after quarter?
It’s a common situation. And the common explanation is that what you have to offer may be interesting enough for your prospects to want to learn more, but that their current situation is not yet uncomfortable enough for them to conclude that they have to act...
Challenging the status quo
Most systems – and most organisations – have a tendency to perpetuate the status quo unless challenged by a critical need to change. And today’s risk-averse climate has had the effect of raising these invisible organisational barriers to change.
Risk aversion hasn’t necessarily dimmed your prospect’s curiosity or their desire to educate themselves about trends that might affect them. But it has made it harder for vendors to persuade their prospects to convert curiosity into action, and to make a purchase decision.
In the void between pain and ambition
Most discretionary business purchases are driven by one of two motivations – to either solve an existing problem or to take advantage of a new opportunity. They are catalysed by either pain or ambition.
But unless and until the problem is acute enough, or the opportunity compelling enough, no purchase will be made. Conversations may certainly continue – and sales people may come to believe they are making progress. They may even hope that a deal is in the offing.
The opportunity will remain trapped in this widening void between pain and ambition until the economic consequences of failure are so blindingly obvious to the prospect that all the stakeholders involved can align around making the decision to take action.
Identifying the economic consequences
The nature of many discretionary purchases is such that the organisation may not already have a budget set aside for them. The budget will have to be found – and since it is unlikely to be created out of thin air, the probability is that the money will have to be redirected from some other source.
But before this can happen, and even if the new initiative appears to support a strategic priority of the organisation, the economic consequences of a failure to act must be crystallised and acknowledged by the prospect. Having a robust ROI is not enough to secure a purchase decision – prospects have to associate a painful economic consequence with preserving the status quo.
“Who else is affected?”
The status quo creates its own supporters naturally, but change has to recruit its champions. So it’s critically important - once pain or ambition is acknowledged by the initial contact within the prospect - that the sales person identifies other stakeholders who are affected by the issue, and finds reasons to connect with them.
The goal here must be to establish a network of affected and influential stakeholders, each of whom has declared a vested interest in dealing with the issue. And whilst paying attention to the most senior decision maker is clearly a critical factor, given the growing number of people involved in today’s decision making processes, winning a groundswell of influential support can make the difference between securing an order or being told that the prospect has decided to “wait and see”.
Avoiding the void
So how can vendors avoid the void between pain and ambition? I’d like to offer five recommendations:
- Ensure that you understand the nature of your prospect’s problem or opportunity - and if you can’t find a compelling one, ask more questions or qualify out. Focus on the economic consequences, and the cost of inaction
- Use every acknowledged problem or opportunity to explore who else is affected, and how. Systematically build a network of involved stakeholders
- Apply a zero value to opportunities in your sales pipeline unless and until the prospect has acknowledged an economic consequence which is at least as large as the cost of acquiring your solution
- Actively manage your sales pipelines with brutal honesty rather than misplaced hope. Base pipeline stages on buying behaviour rather than sales activities. Insist on observable evidence of a change in the prospect’s commitment before promoting them from one stage to the next in your pipeline
- If you find that a prospect is stuck in the void between pain and ambition, recognise that this is a problem and brainstorm strategies to resolve it. If you can’t, resolve to nurture that prospect until the problem can be elevated, and look for other opportunities that have stronger motivations to act now rather than in the future
A final thought
In this area, as in so many others, hope is not a strategy. Adopting a systematic approach to qualifying sales opportunities and managing sales pipelines is more important than ever.
It’s possible to be so close to your current sales and marketing processes that you fail to see the wood for the trees. You might be surprised by what insights an external perspective can bring. I’d be happy to share what I’ve learned with you.
Posted by Bob Apollo on Thu, Mar 11, 2010
The past year has provided abundant evidence that driving sales people to "sell harder" and hoping that this will boost revenues is an out-of-date and ineffective strategy in a world of increasingly well-informed and generally risk-averse B2B buyers.
It's clear that sales people are having to sell smarter - and to ensure that they can diagnose and deal with the obstacles that might be preventing their prospects from making buying decisions.
Successful sales people, and successful sales teams, exhibit a superior ability to eliminate the common barriers that would otherwise prevent their prospects from making buying decisions. They take pains to identify how and why their prospects choose to buy, and what they need to do to straighten the path and remove the obstacles that might stand in their way.
What sets them apart is their ability to think about the problem of winning more business in terms of helping to facilitate their prospect’s buying process, rather than the increasingly unproductive approach of simply trying to push their sales people to close more aggressively. In short, they have chosen to sell and market smarter, rather than harder – by facilitating the buying process.
The B2B buying process...
During each phase in their buying decision process, your prospect will be faced with the choice of staying where they are, advancing to the next phase in the buying process, or abandoning the journey altogether. The checkpoints that mark the prospect’s transition from one phase to the next provide observable evidence of the true status of their buying journey.
For reasons that should be obvious to anyone who has been responsible for coming up with an accurate sales forecast, finding evidence of the prospect’s passage through each checkpoint is a much more reliable way of assessing progress than the traditional approach of relying largely on self-reported sales activity which may have little relationship to the prospect’s propensity to buy.
Measuring flow and leakage...
Sales pipelines share a number of characteristics with their industrial equivalents – they are prone to problems with both flow and leakage. Flow measures the amount of time an opportunity takes to pass through each stage in the pipeline. Leakage measures the percentage of opportunities that fall out of the pipeline at each stage. Taken together, these two metrics are proving critical to identifying the most common barriers to buying.
Extended stage times – slow flow – can indicate a lack of urgency, or a failure on the part of the vendor to provide the prospect with the timely information they need to have before moving forward to the next phase. High leakage rates – particularly towards the end of the process – can indicate a failure to elevate useful or important needs to urgent.
Removing the obstacles...
A careful analysis of sales pipeline flow and leakage invariably highlights a handful of places where significant numbers of opportunities are either getting stuck or falling out of the pipeline. Once the underlying causes have been identified (we use a number of different methods) then these can be addressed through targeted programmes aimed at eliminating these barriers to buying.
The messages and programmes necessary to remove these roadblocks depend on the nature of the obstacle. Some early-stage obstacles are best addressed through better targeted marketing campaigns designed to self-qualify opportunities according to their true potential. Towards the end of the pipeline targeted sales tools can be highly effective in reinforcing urgency, reducing risk, and highlighting the consequences of deciding to do nothing.
An evidence-based approach...
Adopting an evidence-based approach eliminates much of the guesswork and wishful thinking associated with many sales acceleration initiatives. Companies who are able to reliably determine exactly where the prospect is in their decision-making process (and how they might be helped forward to the next stage) are in a much better position to target sales and marketing resources on the things that will facilitate the buying process and move the sale forwards, avoid wasted effort and reinforce prospect goodwill.
Consider this...
What are the common barriers to buying in your markets? What are the factors that determine whether or not a prospect moves forward to the next stage of their buying decision journey with you? Where are the bottlenecks in your sales pipeline where deals get stuck or fall out all together? What can you do to systematically eliminate these obstacles?
Posted by Bob Apollo on Wed, Mar 03, 2010
According to CSO Insights’ recently published annual sales performance optimisation study, the number of sales people making quota and the percentage of sales organisations achieving their revenue targets both declined faster in 2009 than at any time during the past 16 years.
Sales organisations are reporting extended sales cycles, declining win rates, and that a growing number of apparently promising opportunities are ending in “no decision”. At the same time, they observe that their prospect’s budgets appear to be shrinking, that more players are involved in the decision making process, and that their buyers are exhibiting increasingly risk-averse behaviour.
Product hype and sales pressure are losing strategies...
Faced with an increasingly pragmatic mainstream market, claiming better/faster/cheaper product capabilities isn’t going to have much of an impact – it’s become all too easy for competitors to claim “me too” functionality, and anyway, most buyers are looking for solutions they can have confidence in rather than features they might not understand.
It’s becoming equally clear that “selling and marketing harder” isn’t going to improve matters unless a dramatically different approach is taken. Buyers have become immune to hyped-up marketing claims and manipulative sales techniques. Prospects are still keen to learn, but have come to hate being pitched to. We’re all going to have to learn to sell and market smarter.
Re-architecting the sales and marketing process...
Faced with the realities of today’s markets, I’d go so far as to suggest that for many organisations nothing short of a radical re-architecting of their sales and marketing process is going to suffice – based around a profound understanding of today’s prospect priorities and buying processes.
I want to put forward three simple ideas that seem to be delivering dramatic results for the growing number of companies that have embraced them. They all depend upon an important change in mindset, since they revolve around facilitating the buying process - rather than driving the sales process.
1: Evangelise a better future...
The first step is to envision a better future for your customers and prospects, and to articulate the role that your organisation is going to play in helping them achieve it. For maximum impact, this vision needs to be crafted outside-in (around what your solutions can help your customers to accomplish) rather than inside-out (around what you do – much less compelling!).
It’s often said that there is a narrow line between vision and hallucination, but companies who prove to be powerful evangelists with a clear and compelling vision invariably emerge as thought leaders in their markets - and are able to generate a magnetic inbound attraction for potential prospects (and other key members of the BuyerSphere) who want to learn more.
So - what is your vision of a better future for your customers, and what is your role going to be in helping them achieve it? And how are you evangelising this vision to them?
2: Elevate the need for your solution...
You may have identified a prospect need – but unless the need is urgent, you are unlikely to translate this into a decision to buy. This is one of the major reasons why apparently promising opportunities end in a decision to “do nothing”. Interesting needs are often enough to get your solution considered, important needs can drive formal evaluations, but in today’s business environment only urgent needs drive a decision to buy.
Sales people who fail to distinguish between interesting, important and urgent needs invariably end up wasting their time on too many low-quality opportunities – but sales people who are unable to elevate interesting and important needs to urgent ones will end up with too many “no decisions”. Sales trainers talk of the need to identify a compelling event, but in order to create a compelling reason to buy sales people need to get the prospect to associate a significant cost penalty with maintaining the status quo.
So - how would you categorise your prospect’s typical needs as interesting, important or urgent? And what are you doing to elevate the consequences of inaction?
3: Eliminate barriers to buying...
B2B buying decisions typically evolve through a number of key phases, separated by checkpoints that determine the progress that the prospect is making in their decision making process. Most follow a sequence that looks something like this:
Status quo- Recognising the need for change
- Economic consequences identified?
- Investigating possible options
- Exploring potential solutions
- Decision criteria defined?
- Evaluating formal proposals
- Preferred vendor selected?
- Justifying selection decision
- Implementing solution
The buying process can get stuck in any of the phases – and the checkpoints usually prove to be the bottlenecks. Rather than – as conventional thinking might suggest – trying to drive the sales forward, if the vendor has articulated a compelling vision and the sales person has identified an urgent need, they would be better advised to think in terms of identifying and eliminating the barriers to buying.
When this buyer-centric perspective is applied, it’s usually possible to identify a handful of the most common sticking points, and to create revenue roadblock removing programmes to systematically address them.
So – what are the most common barriers to buying in your prospect’s decision making process? And what are you doing in order to systematically eliminate them?
You can download an extended pdf version of this article here...
Posted by Bob Apollo on Thu, Feb 04, 2010
CSO Insights recently released their annual Sales Performance Optimisation study – and the results make for sobering reading. Their global survey of more than 2,800 companies revealed dramatic declines in average sale performance.
According to CSO Insights, the percentage of reps making quota fell from 58.8% to 51.8%, and overall revenue attainment vs. plan dropped from 85.9% to 77.9%. At the same time, lead generation budgets were being frozen or reduced in more than two-thirds of the companies surveyed, training budgets fell, and investments in sales enablement technologies were curtailed.
You can't cut your way to success...
As CSO Insights point out, most firms increased sales quotas from 2008-2009 – and then tried to “cut their way to success” by reducing budgets – a strategy that has manifestly failed. 85% of the firms surveyed have now raised sales quotas again for 2010, without significantly changing their behaviour. You’ve got to wonder whether they are about to have a Groundhog Day experience.
Albert Einstein defined insanity as “doing the same thing over and over again and expecting different results”. Now, I’m not arguing that organisations thoughtlessly throw money at the problem – but I believe the only way that companies are going to dig themselves out of this hole is to get smart and have a ground-up rethink of the sales and marketing process from the buyer’s perspective and eliminate anything that isn’t creating customer value.
Eliminating wasted effort...
It’s not as if there isn’t a lot of well-meaning but wasted effort that could be redirected. The American Marketing Association, in a series of studies, concluded that between 80-90% of all sales collateral played no useful role in the buying process. Frequent failures to get marketing and sales organisations to agree what constitutes a “sales ready lead” cause similarly dramatic wastes of money and effort. Investing huge amounts of effort on deals that at the end of the day decide to do nothing is a third example. You can probably think of many others.
I’m going to suggest that it’s time to take an evidence-based approach that clearly defines the characteristics of your most valuable prospects, identifies their most pressing challenges and aligns them with your most powerful capabilities. But perhaps most important, it’s time to align the sales and marketing process around a deep and profound understanding of how and why your potential customers choose to buy.
Step into your prospects' shoes...
How would they describe their problems or challenges? What triggers their search for a solution? Who do they trust when they are looking for advice? What are the key steps they follow in their buying journey, how can you determine what stage they have reached, and what can you do to persuade them to move forward with you? Equally important, what might be holding them back, and what can you do to remove any barriers that might lie in their way?
Armed with these insights, you can focus your efforts on connecting with the right sort of prospects, and on doing the things that are most valuable to them in their buying process. You can concentrate on the issues that really matter to them, and be in a better position to qualify out prospects that are not right for you (or you for them) far earlier in the cycle, and redirect your efforts towards more profitable activity.
Have intelligent conversations...
You can also equip your sales people to have intelligent conversations with informed prospects, to ask diagnostic questions that reveal the true cause of the prospect’s pain rather than simply treating the symptoms, and to help the prospect solve problems, simplify complexity and manage change.
Technology can help - there are a growing number of promising collaboration, social media, networking and new generation CRM solutions that can help facilitate your prospects buying processes. Training can help to equip your sales people to have intelligent, provocative conversations that stimulate prospects to take a fresh perspective. An integrated approach to campaigns, media and sales can also contribute.
Change your perspective...
But first, you have to get the mindset right. It’s not about selling harder, or trying to do more with less without changing what you do. It’s about making it easier for your best prospects to buy from you. If you can get that right, you can break free from the depressing decline in sales productivity. Because you can be sure that your less-smart, less-agile competitors won’t have grasped the seismic change that is happening around them.
Posted by Bob Apollo on Mon, Jul 06, 2009
How confident are you that you truly, deeply understand who your best prospects are, what really matters to them, and how and why they choose to buy?
It's an increasingly important question, for two reasons: firstly, the latest studies confirm a trend which has been apparent for a number of years - that prospective B2B buyers are using the internet and their circle of connections to do much more research before they are ready to approach potential vendors. The balance of information power has unquestionably shifted in favour of the buyer.
Second, in the current economic climate, we're seeing B2B buyers shy away from anything that might be seen to be a potentially risky decision. If they cannot be convinced otherwise, a growing number are inclined to believe that the safest thing is to "decide to do nothing".
Faced with these two trends, vendors have to focus - on connecting with prospects who have issues they cannot afford not to deal with, and for which they have a demonstrably superior solution - and then they need to ensure that they emerge as the lowest risk of all available options - including that of simply preserving the status quo.
But careful qualification isn't enough - vendors also need to execute impeccably in facilitating the prospect's buying process - and to influence the way the prospect looks at the issue that caused them to start searching for a solution in the first place.
Persuading the prospect to think differently - to embrace a new perspective - is one of the key factors in creating a potentially winning environment. Sales people who successfully pull this off are able to achieve the much sought-after "trusted adviser" status. But timing is critical - they need to shape the prospect's view of the world before they formalise their needs and priorities.
That's where trigger-nometry is so important. The time during which a prospect evolves from being unaware or unconcerned to recognising they have an issue that they need to deal with is a critical stage in the whole process of buying.
Vendors need to understand and anticipate the trigger events that catalyse this transition. These trigger events can be external (things that happen in the market) or internal (things that happen within the prospect's organisation) but they represent the time during which the prospect's perspectives are at their most pliable.
Vendors who only get involved in deals after the prospect has crystallised their view of what they need, and what they should be looking for, start with an obvious disadvantage - whereas vendors who are visible at the time of the trigger event, or who can help create a trigger event, are in pole position to shape the buying agenda.
How can sales and marketing organisations improve their trigger-nometry? By observing the key forces that are shaping their target markets. By tracking key changes within their prospects. And by ensuring they have a relevant and potentially provocative perspective on how the prospect might respond to these issues.
Posted by Bob Apollo on Tue, Jun 09, 2009
Let’s face it - today’s B2B buyers are scared. They are concerned about the risks and consequences of making a bad buying decision. The impact can be seen in extended buying decisions, growing numbers of participants in the buying process, elevated approval levels and more and more apparently promising opportunities ending in a decision to do nothing.
Risk has both a personal dimension - up to and including the possibility that a choosing the wrong solution could result in being fired, and an organisational dimension - the risk that making a bad purchase decision in a strategically important area could negatively impact the performance of the department, or the whole company.
Under such situations, it’s no wonder that many prospects are increasingly choosing to live with the status quo. The risks of making a bad decision are simply too great. For many vendors, their greatest competition is now “do nothing” - having the best solution isn’t always enough.
Of course, vendors can attempt to mitigate risk through the traditional methods of providing references, offering guarantees, completing proofs of concept or (as so many software as a service solutions are doing) enabling prospects to try before they make a long-term commitment.
But there’s another aspect of rebalancing the risk equation - and that’s to elevate the consequences of inaction in the mind of the buyer. The consequences of inaction are all about what happens if the issue that triggered the search for a solution is allowed to continue.
And whilst risk avoidance increasingly preys on the mind of the buying team as they get closer to having to make a buying decision, confronting the consequences of inaction can help differentiate vendors who grasp this concept from the start of the buying process, and cement their position as trusted advisors.
Sales people should be encouraged to probe for the consequences of inaction from the start of their interaction with the prospect. How is the issue affecting their contact? Who else might be involved? How have they tried to deal with the issue before? Why are they searching for a solution now? What would be the impact of not dealing with the issue and choosing to live with the status quo?
Risk mitigation is not something to be left to the end of the buying cycle, when the prospect starts to signal their nervousness - it’s a process that should start from the early stages of engagement with the vendor - and it needs to balance the risks associated with making any decision with the consequences of doing nothing.