The Inflexion-Point Blog: VALUE SELLING STRATEGIES

This is a subject I’ve referred to before, but an excellent article by Don Mulhern has prompted me to promote a concept that deserves far more attention - and which is driving impressive success in the growing number of sales organisations that have embraced the idea.

Most CRM systems - and most sales methodologies - are based on the idea of the pipeline reflecting a series of sales stages which are assumed to be progressively completed over time. It is also assumed that the further we have progressed through these sales stages, the more likely an opportunity is to close.

Many systems go even further: applying the same default probability to every deal that has reached a certain stage. Even worse, many CRM implementations take the “out of the box” default percentages without ever giving any thought to their accuracy or relevance.

But complex B2B sales are - unsurprisingly - far more complicated than that, and it’s yet another example of how simplistic, statistically derived assumptions that can be made to work in straightforward transactional sales environments don’t apply anything like as effectively to complex buying decisions.

One of the most dangerous mistakes we can make as sales people is believing that our customer – and particularly the sponsor we have been working with – knows how to buy.

This might be a reasonable assumption if our prospective customer is buying a familiar solution in a familiar way – for example a repeat purchase from a well-known source.

But if our prospective customer is looking for an unfamiliar solution: something they have not had to buy before – from an unfamiliar source: a vendor they have no previous relationship with, the assumption of buyer expertise is very dangerous.

Buyer unfamiliarity can represent either an opportunity or a threat – depending on how we choose to respond to it...

There’s been a great deal of comment – often from people and organisations who frankly should know better – about how today’s B2B customer doesn’t want to engage with a sales person until late in their consideration.

That comment is based on studies and statistics that appear to show that the average potential customer is variously 57%, 60% or more than 70% through their decision-making journey before they see value in a sales conversation.

But no customer is “average”. And those simplified statistics and headlines – supported by naïve and often self-serving interpretations from people and organisations attempting to peddle a particular point of view – hide a much more nuanced reality.

When you dig into the facts behind the facts, a much more complex reality emerges...

Our prospective customers are far more likely to want to engage with us if they believe that they are likely to learn something valuable from us. Most sales methodologies stress the importance of asking intelligent questions at the appropriate time and with the relevant context.

But that's not enough - and focusing on questioning and ignoring or downplaying the other essential elements of effective business conversations can make for a very one-sided and unproductive interaction.

If we are to build meaningful rapport with our prospective customers, as well as asking well-chosen, well-timed and high-impact questions we also need to share stimulating insights, tell relevant stories and come to the conversation well-equipped to answer our prospective customer's predictable questions...

The now increasingly discredited BANT (Budget, Authority, Need and Timeframe) approach to opportunity qualification discouraged sales people from pursuing opportunities unless there was a clearly defined project with an already established budget.

Now, if you’re selling low-value commodity-like solutions where there is little scope for differentiation on anything other than price and delivery, or if you are competing in tightly-regulated markets that seek to eliminate any chance of creativity, BANT may still offer a potential approach.

But in complex, high-value B2B sales – and particularly where the customer’s need is real but nascent or poorly-defined – the rigid application of BANT as an early-stage qualifier will cause you to eliminate or abandon opportunities just when you have the strongest chance to influence the prospect’s thinking.

This, surely, is madness...

Sales forecasting is hard. For proof, you need look no further than the 2018 CSO Insights Sales Performance study, which reported that on average a little over 46% of all forecasted sales deals actually resulted in a win (never mind the timing).

Even the top performing sales organisations did only marginally better - at just under 54% forecasting success rate on a deal-by-deal basis. Now, there are obvious reasons why accurately predicting the outcome of every complex buying process is fraught with difficulty.

But it’s hard to avoid concluding that we ought to be able to do better. And I’m going to suggest that one of the reasons that organisations struggle to do better is down to simple statistical naivety...

In complex B2B sales environments - particularly ones that involve multiple stakeholders and lengthy and often complicated buying journeys - it's unwise to rush to propose your solution the moment a prospective customer acknowledges or implies that they may have a need that you might be able to solve.

This tendency towards "premature elaboration" has been the ruin of many apparently promising sales opportunities. If it is a significant purchase, and if your customer takes their decision-making seriously, they are going to take their time. rather than racing ahead of their buying journey, you would be far better advised to first establish your distinctive value.

But before you can position the distinctive value of implementing your solution, you first need to position the value of addressing your customer's issues ...

Many B2B sales and marketing organisations have an unfortunate habit of wasting huge amounts of time and energy pursuing "prospects" that are unlikely to ever become valuable customers, often because there is no common company-wide consensus about which opportunities everybody should be prioritising.

Allowing your organisation to treat every inbound opportunity equally - or encouraging them to respond to every RFP you receive - is agross misuse of valuable resources.

That's why defining, identifying and pro-actively targeting your most valuable opportunities is the essential foundation of any successful value selling initiative. These opportunities must satisfy three critical criteria: they must have the potential to buy something that you are offering, they must be willing to buy from your organisation, and the effort required to win their business must be worth it.

In any high-value complex B2B sales environment involving new projects with multiple stakeholders, the buying behaviours and motivations that drive your customer’s decision-making journey are inherently complicated and may be impossible for the average sales person to ever completely understand.

For anything other than inevitable purchases, your customer typically has a number of potential options - each with their respective pros and cons. Each of the individual stakeholders are also likely to have different personal motivations, priorities and decision criteria - often making it hard to establish consensus.

It’s perhaps no surprise that so many apparently promising sales opportunities end with the customer either deciding to do nothing, or to postpone the project until some often-undefined future date. And it’s no wonder that many studies have found that “no decision” is now the most common outcome for such projects.

There are four key factors your sales people need to be aware of when it comes to understanding B2B buying behaviour: status quo bias, loss aversion, decision paralysis and the impact of early influence. Let’s consider each of these factors in turn...

The primary goal of sales enablement must surely be to increase sales effectiveness by progressively reducing the performance gap between our best sales people and the rest, measured by revenue and other tangible metrics.

But it seems to me that a number of sales enablement programmes (typically the less successful ones) have made insufficient efforts to understand the winning behaviours of their top sales performers, or to package these learnings into simple practical and usable tools that can equip competent but otherwise under-performing sales people to embrace these best practices.

It’s a mistake to assume that top performance is largely driven by innate personal abilities that cannot be coached or taught. Of course, that’s often a contributing factor but let’s not ignore another key attribute of top performers: they often have a particularly well-developed ability to learn from their experiences and to adapt their behaviours accordingly.