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 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, Dec 17, 2009
All the publicity surrounding the Copenhagen Climate Conference has reinforced the world-wide need for sustainable development. It seems clear that this can’t be left to governments alone – we’ve all got a role to play, and a responsibility to avoid wasteful behaviour.
Thinking about how we can all eliminate waste isn’t just good for the environment – it’s a powerful perspective for improving the efficiency and productivity of everything we do. And maybe we can do more with the idea than our politicians seem able to.
Where's the waste?
I’m specifically thinking about how we might establish a framework for sustainable sales and marketing. Ever since John Wanamaker famously complained that “half of my advertising is wasted – I just don’t know which half”, marketing has had a deserved reputation as a wasteful endeavour.
Of course the truth of the matter is that a great deal of conventional sales and marketing activity is far more inefficient than even John Wanamaker knew. I’d suggest that in sales and marketing terms, sustainability involves using our resources wisely to generate the maximum customer value with minimum wasted effort.
More Science than Art
I think it is (or should be) pretty obvious to everybody involved that neither marketing nor sales can continue to hide behind a claim that they more art than a science. A series of significant studies from CSO Insights and others have proved the value of repeatable, adaptable process.
In fact, I think it’s legitimate to claim that effective sales and marketing processes foster innovation and creativity rather than suppressing it. So what are the keys to achieving sustainable sales and marketing? Here are three to start with...
Three Recommendations
First: do nothing that is of no value to your customer. This does not have to mean charging them for everything you do – although sooner or later an exchange of tangible value needs to take place. But before conducting any sales or marketing activity you need to carefully consider whether your prospect would be prepared to invest their time or money on the outcome. For example, does that expensively produced piece of sales collateral play any useful role in facilitating the prospect’s buying process? Most (up to 90%, according to a recent study) don’t.
Second: if you are going to lose, make sure you lose early. Chasing deals that are never going to close, or are inevitably heading towards a competitor, is an unbelievably wasteful strategy. Yet sales pipelines around the world are full of these limbo deals. The problem seems to particularly affect middle-of-the-road sales people. The top performers are too smart to waste their time on a losing proposition. The also-rans are too scared to qualify them out because it makes their pipeline look smaller. If you are a sales manager, the single most powerful thing you can do to eliminate waste is to insist on evidence of buyer potential and intent, and to qualify the remaining deals out ruthlessly as early as possible in the sales cycle, and replace them with better ones.
Third: don’t waste your time pushing your products towards the prospect with scattergun marketing campaigns, find ways of getting them to pull you along with them. You’ve got to deeply understand the trigger events that disturb your prospect’s status quo, and you’ve got to ensure that you get found when they start searching for solutions. Rather than focusing on promoting return on investment, help your prospect to recognise the costs and consequences of inaction should they choose to ignore the issue – and ensure that you can demonstrate that you are the lowest risk of all alternative outcomes – including a decision to do nothing.
Lean Thinking
There are many other lessons that sales and marketing could learn from the lean thinking that has already revolutionised manufacturing industry. But don’t be misled into thinking of lean as primarily a cost-cutting exercise. I believe that its’ primary value actually lies in the thoughtful and efficient creation of real customer value, and in refocusing everything else onto more purposeful activity. You can read more about lean sales and marketing here.
What do you think? Is it possible to achieve sustainable sales and marketing? What other strategies have you found helpful in eliminating value, avoiding waste and improving predictability?
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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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.