Posted by Bob Apollo on Sat, Aug 28, 2010
Online shopping should be a painless experience, right? Aviva, the UK insurance company are certainly trying to convey that impression in their current ads starring comedian Paul Whitehouse.
Unfortunately, their online systems appear to be programmed by comedians with rather less talent. I’ve been using Aviva for years, since before their expensive rebranding from tried-and-trusted Norwich Union.
Viva Voce
We own a couple of properties. At the appointed time, Aviva reminded me by email that one of the property insurances was due for renewal, and that I could save 25% by renewing online. “Simples”, I thought. How wrong I was.
Expecting that in a few clicks I would be done, I followed their instructions. Only to find that the insurance policy wasn’t shown on my list of policies. No matter where I looked, there seemed no way to add it. I felt my Viva draining away. So I resorted to the phone.
Press 1 for frustration, press 2 for more frustration, press 3 for ...
After holding on and navigating my way through the inevitable IVR system, I got to speak to a human being. I’ll give her credit, she was trying to be helpful, and could speak intelligible English. I explained that I was only phoning her because their online system had failed me, and that I expected to pay the online rate.
I suppose that I shouldn’t have been surprised that despite all this, she still quoted me the price for renewing over the phone - without the online discount. So I pressed, explained that I was only calling because their online systems had failed me, and she gave way. At least that was a result. I had my policy renewed. But the Aviva system was still broken.
I just don't get the Aviva deal...
I felt it my civic duty to help Aviva diagnose and deal with the root cause. So I left a comment on the web site, using the only mechanism available to me. No response. A few days later, I made a more forceful compliant, and got a response. But not the one I wanted.
Because of the “way the policy had been set up” (this was the full extent of their explanation), they could not consolidate the policy with the others. I would have to manage it separately. I felt my Viva draining away faster, so I responded asking them to change the way the policy was set up. No reply.
Not so simples
I thought I should try logging in again this morning to see if they had fixed the problem without telling me. And guess what? Now I can’t see any of my policies at all. Well, at least that makes it simple. I won’t have to bother considering them when it comes time to renew the other policies.
You can bet that I’ll be comparing the market when that time comes around. And Aviva will have lost a previously valuable customer.
You have to be on top of your game on line
So here’s a thought: if you rely on the web to improve your customer’s experience, do you understand what it’s really like to step into their shoes? And if the expectations you have set are not realised, could promoting your web services actually drive customers away, and into the arms of companies that better understand how to create a great online experience?
Posted by Bob Apollo on Tue, Aug 24, 2010
In my previous article on the Buyer's Journey, I set out our latest thinking on the nature of the B2B Buying Process. In this article, I want to examine some of the implications of the Buyer's Journey for the B2B sales and marketing process.
If you recall, I described the B2B Buying Process in terms of consideration phases and decision gates.
Each consideration phase reflects an important step in the buying process. These phases are separated by decision gates.
Each decision gate represents vital evidence of commitment on the part of the prospect.
We've found the distinction between phases and gates to be significant when designing, measuring and managing sales and marketing processes.
Consideration Phases
Each consideration phase in the buying journey is marked by changing priorities, attitudes and behaviours on the part of the prospect. If they are to align their sales and marketing activities with the prospect's priorities, vendors need to consider:
- Which roles are likely to be involved at this phase in the process?
- What are likely to be their most important needs?
- What might cause our prospect to move forward to the next phase? How can we help?
- What might cause our prospect to hold back or abandon the journey? How might we reduce the risk?
- What tools do we need to facilitate this phase of the buying process?
- What could we be doing to requalify the prospect's interest and motivations?
- How long has the prospect been at the current phase of the process?
- What evidence of progress should we be looking for?
- How should we be prioritising and focusing our activities?
It should come as no surprise that the sales people - and sales organisations - that have been able to anticipate their prospects' most important needs at each stage in the process show consistently shorter sales cycles and higher win rates.
Decision Gates
The correct identification and diagnosis of the status of decision gates is the critical factor in accurately placing prospects at the correct phase of their decision making journey. Decision gates offer tangible evidence of prospect commitment and progress.
Depending on the phase of the project, sales people need to consider:
- What evidence can we uncover about the buyer's current intent?
- Can we win? What would it take to win?
- Have we identified, and has the prospect acknowledged, a catalyst for change?
- Are we sure that someone in authority has committed the necessary resources?
- How many proposals has the prospect received, and what criteria are they using to evaluate them?
- Are we in the lead? How can we be sure? Have we been selected? Have all other options been rejected?
- What's the approval process? Who is involved? What do they have to do before placing an order?
When it comes to decision gates, in the words of sales trainer Rick Page, "hope is not a strategy". Sales people must be encouraged to look for tangible evidence of buyer behaviour and intent. Sales managers should not allow sales people to advance deals to the next stage in the sales process without it.
Diagnosing and Dealing with Bottlenecks
Focusing on the buyer's journey has another advantage - it enables vendors to anticipate, diagnose and deal with the bottlenecks and constraints that commonly delay or derail buying processes.
A determined effort to understand how prospects are moving through their buying journey usually throws up a handful of common choke points that - if systematically addressed - will enable opportunities to move from one phase to the next faster.
Timing is Everything
Getting involved early is a critical success factor for most opportunities. It's widely recognised that vendors who only get involved after an RFP is issued have a small chance of winning unless they can do something to reshape the propect's agenda.
The earlier vendors get involved in the buying process, the better. Recent studies confirm that sales people who connect with prospects in the "window of opportunity" between a catalyst for change being identified and the formal search for solutions being initiated - while the prospect is still assessing the impact of the change - enjoy win rates 4-5 times higher than the average together with significantly shorter sales cycles.
There's an important implication for marketing here: vendors need to position themselves as experienced change agents - and as experts in change management - when it comes to addressing the most common issues, trends and challenges in the markets they have chosen to serve.
Making the Economic Case for Change
Vendor marketing activities should focus on anticipating common catalysts for change and position themselves as the place to turn to for advice when they are recognised by the prospect. Once engaged with the prospect, the vendor should focus on establishing the economic case for change - and identifying the potential consequences of inaction.
In many early buying processes, it's more important - and ultimately more valuable - to concentrate on identifing the case for change (or qualifying out opportunities where this is weak) rather than prematurely diving into the details of the vendor's solution.
Facilitating the Buying Process
Have you established the typical buying processes, consideration phases and decision gates in your target market? Are your sales and marketing activities consciously targeted at facilitating your prospect's buying process? How are you helping to establish the economic case for change? And where are the typical choke points in the buying process, and what are you doing to deal with them?
Posted by Bob Apollo on Sun, Aug 22, 2010
The concept of the buyer's journey has been around for a number of years. Hugh Macfarlane's "The Leaky Funnel" inspired a number of our early sales and marketing alignment assignments, and was one of the first books to suggest shifting attention away from driving the sales process to facilitating the buying process.
More recently, I've been impressed with the work being done by Sirius Decisions, StrategyMix and Marketo - amongst a growing number of others - to think through the implications of this dramatic (and very much needed) change in vendor mindsets.
The Process of B2B Buying
I've concluded that most high-value b2b sales reflect a remarkably consistent evolution in the prospect's mindset - from being satisfied with the status quo, to recognising the need for change, evaluating options, and finally implementing the chosen solution.
The process is rarely simple. The prospect can choose to abandon the journey, put the project on hold, or revisit a previous phase, at any stage in the process. But it's unusual for complex, high-value purchases not to pass through a series of key consideration phases - or to have to navigate a series of decision gates.
Consideration Phases and Decision Gates
The diagram below identifies the common phases and gates. It's worth establishing the distinction between the two, because many sales processes and "out of the box" CRM implementations fail to recognise the differences.
Each successive consideration phase reflects an important step forward in the buying process. It's been repeatedly proven that opportunities with momentum are far more likely to result in a positive buying decision than projects that have been stuck at a given phase for a long time.
These phases are separated by decision gates. Each decision gate represents vital evidence of commitment on the part of the prospect.
To start with, the prospect may be satisfied with their current situation. But then something happens - it could be change within their organisation, or something in the external environment - that forces them to challenge the status quo.
We call these inflexion-points "catalysts for change" but you may also see them referred to as trigger events.
At this point, the organisation is typically focused on assessing the impact of the change - and determining whether it is worth dealing with. If it is, resources are committed to finding a solution.
The Critical Decision
This decision - to commit resources - may be the most critical gate in the process. Someone with decision-making authority must have agreed that the problem needs solving, assigned the appropriate people and committed to making the necessary funds available.
The prospect then typically spends some time establishing criteria. This usually involves both business needs and functional requirements, as well as determining how they will decide if and what to buy. By the end of this phase the prospect will have requested and received proposals from one or more vendors.
Assuming that at least one of these proposals is worthy of consideration, the prospect evaluates their options - including the possibility that they may, after all, choose to do nothing. But if the case for change remains strong, they will select their preferred vendor.
But - as many sales people have learned to their cost - being told you have been selected is no guarantee that the business will follow. The project now faces an investment approval process that will see the proposal competing against a variety of other possible expenditure - or the conclusion that the prospect would be better off keeping the money in the bank.
Only once the order is confirmed can the sale process be regarded as finished - but the process of buying continues, until the solution is implemented and the original issue has been addressed.
Applying the Buyer's Journey
Some B2B buying decision processes are more complex than the one I've set out above, but it's unusual for the process to be simpler for significant high-value purchase decisions.
I'd welcome your feedback - how does the above process align with your experiences? Have you seen the process evolve in the markets you serve? Have you carefully defined the key consideration phases and decision gates in your markets? And how closely have you been able to integrate the buyer's journey into your sales and marketing activities?
Looking Forward...
In the next article in this series, I'll be examining the implications of the buyer's journey for the sales and marketing process... Until then, good selling!
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 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 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 22, 2010
Are you involved in selling high-value, complex products or services to a business audience? I recently suggested that most of your sales efforts are likely to be wasted - you can read the article here. But there’s no reason to let marketing off the hook.
John Wanamaker, the US department store pioneer, is often quoted as saying “Half the money I spend on advertising is wasted; the trouble is I don't know which half”. And naturally the problem is not just associated with advertising – the challenge affects every form of marketing.
Of course, today’s marketing media offer the promise of much better targeting and near-instant feedback on who you have reached and how they have responded. But technology by itself isn’t enough to eliminate the waste that is still associated with many marketing investments even today.
Marshall McLuhan believed that the medium was the message, and there’s no doubt that the media through which any message is delivered affects its form and impact - probably far more than he anticipated when he coined the phrase back in 1964.
But it’s still critically important to get the message right as well as delivering it effectively – and that involves mastering the basics of a compelling value proposition that addresses the urgent needs of an ideal customer profile. Misalign any of these three elements, and you’ll still end up wasting a great deal of your marketing effort.
And although the feedback new media provides can help you refine your targeting, it’s no excuse for laziness and there remains no substitute for creating a great brief from the get-go. So let’s spend a moment considering each of these three components.
Addressing urgent needs
Until there is a need, there can be no solution. And without a solution, there can be no sale. But there is an important hierarchy of needs, and whilst interesting needs might get you considered, and important needs might get you evaluated, only urgent needs will get you bought.
Does this imply that you should only focus on urgent needs in your campaign? Well, no – but if you choose to address interesting or important needs as well (and there’s often a good reason to, because of some of the subtleties of the human decision making process), to avoid wasted effort you had better make sure that you have created collateral and sales tools that can help these “opportunities with potential” to acknowledge that they have urgent needs.
Ideal customer profile
It’s no longer enough to rely on demographics alone (size, geography, industry, etc.) to define your target audience. Today’s best B2B marketers are also looking out for the trigger events that spark buying processes, and identifying with the behaviours and motivations of their likely champions within prospect organisations – as well as mapping the spheres of influence that inform prospect's decision making.
To avoid wasted effort, it's worth thoughtfully crafting buyer profiles (or “persona”) for these potential champions as well as the organisations they work for - and investing in influencing the people and organisations these champions are likely to turn to for advice as well as the prospects themselves.
Compelling Value Proposition
But even with intelligent targeting of needs and audience, much effort still gets wasted in the absence of a compelling value proposition. In addition to targeting your most valuable prospects, your value proposition must align your most powerful capabilities to their most urgent needs, differentiate your offering from the competition, elevate the need to act, mitigate the risk of change, provide proof to back up your claims, and make a well-chosen offer and call to action. If any of these elements are weak or missing, your value proposition is diminished – and much of your effort wasted.
Marketing is a Process, Not an Event
My final recommendation is that you consider marketing as a process, not an event. When you are selling complex, high-value offerings to a B2B audience, you can’t hope to cram all your messages into one communication. But if you haven’t anticipated what the whole story is, or where, how and when it is going to play out, your good work will still be wasted. John Wanamaker would surely not approve...
By the way, we've recently published a 2-page checklist that captures some of the lesson's we've learned from today's most scalable businesses - you can download it here.
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 Tue, Mar 09, 2010
In today's business climate, useful or important needs might help to get a vendor considered or evaluated, but only urgent needs will get them bought. So it's become critical that sales people are able to elevate the prospect’s need for their solution. This ability to identify or create urgent needs makes all the difference between successful and unsuccessful sales people, and between companies who lead their markets or follow as also-rans.
In fact, I’ve observed that the inability to distinguish between useful, important and urgent needs, or to elevate a prospect’s need for the solution from useful or important to urgent lies at the heart of many sales pipeline challenges.
Why not just look for urgent needs?
Given this, why wouldn’t sales people and vendors concentrate solely on trying to find prospects with urgent needs? There are a couple of reasons why this is not an effective strategy – first, prospects with urgent needs are often already in an active sales cycle with another vendor’s fingerprints all over it and second, urgent needs often have personal, painful and emotional dimensions, and getting prospects to acknowledge this in a first contact may be challenging.
Distinguishing between useful, important and urgent needs...
Useful needs drive curiosity, generate interest and can be helpful in initiating buying processes. Important needs drive consideration, cause evaluation and can be helpful in stimulating evaluation. Urgent needs drive action, lead to purchase and are essential to concluding the sales process. A key way of distinguishing between the different levels of need is to get the prospect to describe the potential impact of not dealing with them.
Useful needs are often irritants without clear economic consequences. Important and urgent needs typically have some measurable economic impact, but the things that differentiate urgent needs include escalating economic impact the longer the issue remains unresolved, the number of people affected, and explicit linkages to “top of list” personal or corporate goals.
The consequences of inaction...
Clearly defined consequences of inaction are an essential foundation for urgency. Faced with an acknowledged prospect need, sales people must establish how the prospect may have tried to deal with the issue before, why now is the right time to address it, who else within the prospect organisation is affected by the issue and – most critically - what would happen if they fail to deal with the issue soon.
It’s rare for needs to be elevated to urgent status unless the economic consequences of not dealing with them have been acknowledged by a sufficiently powerful champion within the prospect. These economic consequences don’t just revolve around the opportunity to reduce cost – they can also relate to missed revenue opportunities.
Qualifying for urgency...
So, with a very few exceptions, if the pain cannot be monetised, persuading the prospect to invest in solving the problem is going to be an uphill battle. In fact, a growing number of our clients have adopted the approach that sales opportunities cannot be valued and should not be forecasted unless and until the pain has been monetised and acknowledged by the prospect.
This has interesting consequences: applying the rule at first reduces the perceived value of the sales pipeline - but in the absence of urgency the affected opportunities were almost always overvalued anyway. It also forces the sales person to think carefully about how to elevate the urgency of the prospect’s need or (if this cannot be achieved) to accept that a longer-term “nurturing” strategy may be more appropriate. Either way, forecasting accuracy inevitably rises.
Consider this...
What proportion of the prospects in your current pipeline have acknowledged urgent needs, and are you able to help them to monetise the consequences of inaction? Are your sales people able to accurately distinguish between useful, important and urgent needs? What are you doing to help elevate your prospect's need for your solution, and how are you dealing with opportunities that seem to have no current urgent need? And does your current sales forecast include prospects who have not yet acknowledged the cost associated with preserving the status quo?