McKinsey help to illuminate changes in b2b buying behaviour
A recent article in the McKinsey quarterly has highlighted a phenomenon that many of us have observed: B2B purchasing decisions are tracing increasingly complex journeys - and these changes are challenging the long-standing behaviours of many B2B sales organisations.
It’s becoming increasingly unhelpful (and massively unproductive) to represent sales pipelines in terms of simple traditional linear sales process that sales people are required to follow - because your customers don’t behave that way.
McKinsey’s research identified that B2B customers regularly use an average of six different ways of interacting with vendors to get the information they need - and showed that two-thirds come away frustrated by inconsistent experiences.
That’s a pretty unpalatable statistic. It’s clear that many sales and marketing organisations are still “fighting the last war”, and are struggling to adapt to the new realities of B2B buying behaviour. And it’s equally clear that customers don’t appreciate their ineptitude.
But there is a small but growing minority of B2B sales and marketing organisations that have adapted successfully, and are doing rather well as a result. McKinsey’s research - and our own experiences - suggests that there are a handful of key initiatives that can help organisations to better embrace the new realities. There’s a link to the full article at the bottom of this blog.
Align with the buying process
The first and most fundamental decision is to align your sales and marketing processes around your customer’s behaviours, and not your sales activities. The key stages in the process must reflect the key phases in their decision-making process - and progress from stage to stage must depend on confirmation that your prospect has made a tangible advance in their buying journey.
That journey, of course, is rarely linear - and you can’t expect every member of the decision-making team to be at the same stage in his or her personal journey. The project as a whole, and the support of individual stakeholders, may move forward, stall, go backwards or be abandoned completely.
Now this is a complex thing to model (and a tough concept for some middle-of-the road sales people to grasp), but that’s no reason to go into denial. Defining your pipeline in terms of buying decision stages, basing your milestones on observed advances in buying behaviour, and working hard to not just identify, but also identify with the key stakeholders are key strategies to cope with the new B2B buying landscape.
Segment according to customer behaviour
The next thing you need to do is to abandon the idea that demographics are anything more than table stakes when it comes to market segmentation. McKinsey’s research and our own experience clearly proves that it is much more useful to segment customers along structural, situational and - most importantly - behavioural dimensions.
By behaviour, I mean how they are likely to buy, what considerations are likely to be most important in shaping their buying decision, the way in which they might prefer to consume information, and how they prefer to interact with potential vendors.
There’s no point in ignoring these considerations, or stumbling across them too late in the decision making process to have any impact. Early on, through a variety of mechanisms, you’ve got to assess what type of customer you’re dealing with, whether you choose to pursue them, how you can best support their decision making process, and how you can position yourselves to win.
Organise to optimise the customer experience
For the customer-behaviour-based segments you choose to pursue (and you probably won’t and shouldn’t choose to pursue them all with equal vigour), you’ve got to organise internally in a way that ensures that you optimise the customer experience.
It’s essential, in our experience, to align both sales and marketing around the key phases in the customer’s buying journey. What information are they likely to require? How might they prefer to consume it? How can you best facilitate their progress at each stage? If early interaction is a key success factor (it almost invariably is), how can you encourage it, and how can you ensure that each interaction generates real value for the customer?
Of course, this isn’t and mustn’t be a one-way street. What information do you need to know about the prospect, and how can you gather that information most effectively? How can you most effectively build up a picture of the buying dynamics within the organisation? If sales and marketing aren’t working together towards this common purpose, you are making the task of qualifying and winning opportunities that much harder.
Really know your customers
Customer knowledge is perhaps the critical factor. Firstly, you need to understand your markets, and how they behave. But once the interaction starts, you need to understand what really matters to each particular customer - and each individual stakeholder. It requires a combination of macro-and micro-research. And it’s another very good reason why you need to start by aligning your sales and marketing efforts at every level with your customer’s buying decision process.