Business Bedrock

Are we marketing and selling so that we follow the B2B buyer's journey?

2011-07-24T23:39:02+10:00

B2B buyers have fundamentally changed how they approach the purchasing process.

They are time poor and risk averse - but also (due to the internet) enormously well informed.

They resent our "interruptive" marketing approaches such as advertising, cold calling, direct (e)mail etc - and they don't trust our salespeople. They are more than happy (in fact demanding) to do their own research, and then call upon us as vendors and service providers when they are ready.

With social media they can reach out to friends, experts - in fact anyone interested - and get detailed feedback on the problems they're trying to solve, the solutions they're investigating, and who to purchase them from.

What does this all mean for our demand generation and sales efforts?

If we accept that we should be aligning our sales and marketing efforts with the buyer's journey, we should compare this journey to our current sales funnel.

Comparing the buyer's journey to our sales process

The above graphic shows a typical sales process (blue), and the typical buyer's journey (green) (NB - full disclosure - I have no doubt my green representation of the buyer's journey is plagiarism - I've seen something very similar before, but I can't remember/find the source. Apologies if I've copied your work without reference - and if anyone knows the original source please do let me know so I can update).

B2B buyers don't just wake up in the morning and say "I must go out and buy something" - they only need to buy something once the have a problem, or they recognise the opportunity to grow/improve. In other words - their status quo is shattered. When this happens, in over 90% of occasions they will go to a search engine, and type in words associated with their problem - just to see who else has had the problem, what they've done about it etc. At this stage they DON'T know what sort of solution they want - they're just trying to frame the problem in their heads.

By searching online, however, they start to frame the problem, and start to come up with categories of solutions:

SEARCHING AROUND PROBLEM -> CATEGORISING PROBLEM -> FRAMING SOLUTION

I can't pay the bills -> I have a cashflow problem -> I need to buy an overdraft from the bank

I'm falling behind my competitors -> I keep bringing new products to market too late -> I need to buy collaboration software so my product development team can work better

My sales staff keep resigning -> I'm not doing the right sort of professional development -> I need to buy a sales training program

If we are unaware that the buyer has a problem and that therefore their "status quo" has been shattered, then the buyer will proceed along a path of researching their options via search engines, framing the problem they have and hence choosing a category of solution - and will then use social media to reach out to colleagues and respected experts to discuss the best solution, and who to purchase it from. The problem for the selling organisation is that there is only a small likelihood that the buyer will CORRECTLY diagnose their problem - and then arrive at what they believe the BEST solution to be - and then ring US to engage with us to hopefully purchase our solution.

If we are not "listening" online - and/or if we don't have an inbound marketing strategy attracting buyers to our website - then the RED arrow in the diagram above will prevail: if we find out about the buyer at all, it will be after they have already framed their problem, solution, and narrowed down their list of prospective service providers. It's very hard to influence the sale at this stage - low percentage return in competing head on with other sales organisations that the buyer may also have contacted.

We need to move from the "red line" to the "green line", which represents early engagement.

So - the question is - how can we be alerted to the fact that a buyer's status quo has been shattered AS SOON AS THEY START SEARCHING AROUND THE PROBLEM?

Getting buyers to find us when they're not looking for us

One approach is to use search engine optimisation (SEO) techniques so that - when the buyer does hit the search engines - a page on our website comes up at the top of the list. This means that your website should NOT be dominated with stories about your company or your products - it's unlikely that the buyer with their new problem will search for us! THEY DON'T EVEN KNOW YET WHAT THEIR PROBLEM IS!

What is important is to outline all of the phrases that you think the buyer might type into the search engine straight after discovering they have a problem - and have a page on your website for each one (see 1st case study in this series). (And - yes - my website is being rebuilt as we speak!)

The SEO game has changed only recently, with the Google's and Microsoft's of the world changing their search algorithms to - in particular - incorporate social media. Well researched keywords are no longer enough - our ability and intent to engage via social media is also now critical.

Being where buyers are

Social media extends to us - and B2B buyers - the opportunity to instantly relate to a range of peers and experts, to discuss problems, talk about solutions etc. The concept of an online "community" is particularly popular, and is championed by the Linkedin's of the world via their Groups construct - or indeed communities can be purpose built to attract specific participants.

In terms of the buyer's journey - by joining or forming groups where our target B2B buyers "hang out", we will be on hand to hear when they're having a problem, as they discuss this within the confines of a forum. Important rule, though, is NOT to "sell" - buyers resent this. Rather - we should provide advice and content to the buyer to assist them frame their problem and identify a solution. If we're seen as "helpful" and "expert", they'll approach us - we won't need to "sell".

Using social media to "listen" for "sales triggers"

"Sales triggers" are things that happen to buyers, that shatter their status quo.

The excellent book SHIFT! explains that there are 3 types of sales triggers:

1 - An unsatisfactory experience with a current supplier (with Twitter being a huge source of expressed disatisfaction)

2 - Some sort of problem in their business (FOCUS an excellent example of a site dedicated to getting problems solved)

3 - A change in job role, or indeed company (B2B folk like to put their "mark" on a new role - with Linkedin automatically sending us these details direct, or conveniently collated by new sites such as IKO System).

However we do it - if we can be alerted to these sales triggers, we have the opportunity to engage early, which has always been the cornerstone of successful selling.

How many opportunities are you missing out on, by waiting for the buyer to contact you after they've diagnosed their own problem, and BY CHANCE has been given a recommendation to contact your organisation?

Facing facts - sales people can't be trusted

2010-12-16T23:11:36+10:00

I'm facinated by the dramatic changes in behaviour of B2B buyers, and in particular their increased use of social media to seek opinions from peers prior to approaching sales organisations.

I see 2 key drivers for this: - a lack of trust in the motives and behaviours of salespeople, and a resentment of the behaviours of marketing managers who focus on "cut through", in essence "throwing rocks through buyers' windows".

This (deliberately inflammatory) post hypothesises that sales people can't be trusted - and probably revives many archetypal views of "the sales person". My background is the IT industry, so I will use this as well as B2B in general to illustrate the points made.

My generalist - and admittedly inflammatory - statement is that as a community salespeople are not trusted. In his book "The Speed of Trust", Stephen M R Covey advises that trust relates to BOTH character (ie intent, integrity) and ALSO credibility (ie capabilities and results).

So - where's my proof?

IDC's 2010 Buyer Experience Study reports that, on average, 50% of sales calls are made by IT sales reps that are insufficiently prepared. Unlike professions such as medicine, accounting, law, many trades - sales lacks any rigorous or widely recognised accreditation dictating entry to the profession. Particularly for IT channel members sales must be one of the few jobs where you can walk in, earn over $100k per annum, with little or no training. Frost & Sullivan in 2006 documented that the 1st and 3rd highest market restraints in the Enterprise Content Management market were "difficulty in understanding business benefits" and "mismatch between business needs and solutions offered". These factors related directly to sales person performance. There goes "capabilities".

Results. I have no formal statistics on the number of IT projects that "fail", but the number is not negligible, and the consequences are high. In my home town a $64m public health payroll implementation has failed - and will take $209m to fix. No doubt a sales person was responsible for early reassurances that this project was actually on track.

Intent. Predominantly IT sales people are bonused on orders, revenue, margin etc. There's minimal focus on recommending the right solution, successful customer outcomes etc. Temkin Group reports the 5th highest organisational obstacle to great customer experience (all industries) is "lack of incentives & rewards". Sales people are goaled on "making the sale" - not specifically "solving the customer's problem".

Integrity. Look no further than feedback from sales teams themselves. Journal of Personal Selling & Sales Management (#2, 2009) cites studies where 49% of sales managers surveyed report their salespeople had lied on calls, 34% report their salespeople had made unrealistic promises, 22% report sales of products that customers didn't need.

I'm obviously trying to be provocative here - but I'm convinced the growth (for example) in social media usage by B2B buyers reflects an accelerated shunning of salespeople, and moving to talk more with trusted peers prior to engaging with vendors and channel members.

So - comments please - how widespread is distrust of sales people - and what should sales and marketing professionals do to address the situation?

Social media, the myths of B2B marketing & understanding why buyers buy

2010-12-05T16:11:21+10:00

The explosion in social media - with B2B buyers actually outpacing their B2C counterparts in uptake - reflects a massive change in buyer behavior. To remain relevant and hence effective, B2B marketers need to understand these dynamics, and similarly adapt their behavior.

A great research report into how business buyers buy reveals some myths that mislead B2B sales and marketing efforts, namely:

The best product always wins
The playing field is level
The world is your market
Face-to-face doesn't count any more
Buyers are rational
Every purchase is researched
You can recognise a qualified lead.

Instead of the rule of strict financial and non-financial business cases, irrationality rules.

And what causes this gap between "rational" purchase decision making, and the "real world" experience?

Buyers are nervous - they don't trust marketers and salespeople - and they are driven by making sure they DON'T make the WRONG decision. The internet now provides all the information they need around sellers' products and services, reputation etc - so whereas salespeople once provided this information, the sales function is now disintermediated and salespeople need to wait in line until the buyer is ready to contact them.

A key theme in this report is that "B2B buying is all about risk avoidance". IBM used this with great success, coining the phrase "nobody ever got fired for buying IBM". A sellers' tactic - creating "Fear, Uncertainty and Doubt" (ie FUD) - even has its own wikipedia page.

GIven this nervousness - and the lack of trust in traditional sales and marketing approaches - buyers turn to people they know to seek opinions on what to buy, and from whom. Internet based social media tools simply allow buyers to do this:

with immediate feedback
from a broader audience unconstrained by existing personal relationships
because of this broadness from an audience that is more expert ie having a higher likelihood of having had the relevant experience to help any individual buyer

These myths have been recognised in various B2B sales methodologies such as Solution Selling which focuses on removing buyer pain points - even urging sales resources to create anxiety within buying groups to further their cause.

(Interestingly, even risk avoidance can be overridden, as noted in the Strategic Selling methodology which talks about the necessity to create "personal wins" for all involved in the buying decision. At time of writing even Barack Obama is questioning the wisdom of the FIFA decision to award the rights to host future World Cups to Russia and Qatar, with FIFA's own technical analysts rating Qatar's big in particular as the most risky. [DISCLOSURE: my home country Australia was an unsuccessful bidder for the 2022 World Cup hosting rights.])

(Also - ironically - whilst the internet is providing more feedback to buyers to point them towards trusted advisors, it is also making them even more nervous about poor purchasing decisions. In my home state of Queensland in Australia there is public outrage throughout both online and traditional media on a debacle associated with rolling out a new payroll system for the State's public hospital system. For months doctors and nurses have been getting the wrong pay - or no pay at all. The State Government has announced a program to fix this that it estimates will cost AUS$209m - the system cost AUS$64m to implement - the fix will cost over 3 times the initial cost! The original buying group will no doubt be exceedingly risk averse moving forward!)

So - what to do if we're in the B2B sales and/or marketing game? We need to recognise that buyers will turn to sources they trust before they turn to us. Therefore - quite simply - we either:

need to be a trusted source that they can find, or
need to be seen as a trusted source by someone the buyer will turn to.

B2B social media strategy flows from these 2 points, and future posts will discuss how we can make this happen - will elaborate on why sales people can't be trusted and what we can do about this, and also elaborate on why traditional B2B demand generation programs essentially involving throwing rocks through people windows, which understandably buyers are tiring of.

What steps are your organisation taking that ensure you can be found when the B2B buyer needs you - and that when this happens you're seen as credible, based on how you've influenced that buyer's peers?

Helping organisations change - think of the dentist

2010-10-31T17:04:46+10:00

Great to see McKinsey bringing to our attention a series of "classic" articles - the most recent being a seminal 2003 article about the need to consider psychological factors in achieving major organisational change.

How often have we seen real need for organisational change - particularly in the midst of the internet era, global financial crises etc - yet despite this obvious need the big workforces just can't seem to change to help themselves.

The McKinsey article reports that - for change to occur:

employees have to have a purpose to believe in (so they can understand the role their new actions will have, so that their contributions make sense and they have something to believe in - failing this cognitive dissonance will set in ie "why am I doing this - really!")
employees' rewards have to be consistent with the behaviours required once the change has happened (eg there is no point exclusively rewarding sales revenue performance if the firm's strategy is to lead in positive customer experience - if great customer experience will lead to competitive advantage and hence revenue, just reinforce giving good experiences - the revenues will come!)
give employees the skills they need to behave differently (and don't do this just by sticking them in a classroom - checkout Kolb's work on 4 phase adult learning)
provide consistent role models (ie walk the talk).

This is all good - but I think it ignores a powerful human foible.

We need to perceive a crisis to really move out of our comfort zone and change!

How often have we heard stories about people adopting a healthy lifestyle only AFTER they've had some life threatening illness or episode?

And think about the dentist - we rarely change our schedules to urgently rush off for a checkup - but we certainly change our schedules as soon as we have a painful toothache!

The same applies in sales - the successful Solution Selling methodology tells us that, unless we can find a problem that customers urgently need fixing, then there will be no sale.

If we turn to the gurus of change management - in particular thought leader John P. Kotter - we'll see in his Eight-Stage Process of Creating Major Change that the very first step is to create a sense or ugency - "identifying and discussing crises, potential crises, or major opportunities".

So - given all of this - how do we get the organisation to change for the better BEFORE any crisis hits? This is one of the key skills of the leader. An open and transparent approach to the organisation, explaining the opportunity that can be achieved - and then motivating everyone to change direction BEFORE the crisis hits. Core leadership skills here - being able to paint a concrete picture of where the oragnisation is heading and what the pitfalls will be; again painting a picture of the opportunity that lies in the alternate direction, and importantly what it means for everyone in the organisation.

But - despite best leadership efforts - not everyone will want to "step on board". In fact this "on board" metaphor is a core element in going from "Good to Great", as espoused by Jim Collins - although interestingly if we follow his blueprint in becoming a "great" company, we'll actually get the "right" people on the bus - and ONLY THEN we'll figure out the best path to greatness. "First who - than what." Jim actually disagrees with the concept of creating change via crisis: Companies that make the change from good to great have no name for their transformation—and absolutely no program. They neither rant nor rave about a crisis—and they don't manufacture one where none exists. They don't “motivate” people—their people are self-motivated.

So - what's your plan to change your organisation for the better? Do you have the right people on the bus? Irrespective of who's on the bus - if you're looking to instittue change, are you giving people a sense of urgency to change their ways?

It's tough at the top......

Don't rehearse - present naked - create meaning

2010-09-25T22:51:35+10:00

If you're going to do a film clip - something that is not interactive - then by all means prepare and rehearse.

If you're going to present to a live audience - and want to do something more than just "parrot off" a rehearsed speach - and modify your talk based on your perceived reactions from the audience - then certainly prepare, but don't rehease.

Rehearsing is for cowards.

If you want to stick to the script - do a video.

If you want to present to an audience, and feed and thrive off their energy and feedback, then present naked.

Has it been worth your audience's time turning up - or should they have just downloaded the video......

Getting the message across

2010-09-14T20:01:04+10:00

Just alerted to this article on the Harvard Business Review blog, and it reminded me of a key business bedrock issue - how can an organisation perform if we can't get our message across?

As someone who offers customised sales training as a service, this has been a critical issue for me, particularly since I came across research carried out by Equation Research - on behalf of Sales Performance International - that measures the "half life of sales training" (ie the amount of time it takes participants to forget half of what they learnt). You can find the article describing the research here - and the following graph shows you that 44% of sales training participants forget half the content within the 1st month.

When I saw this I started to wonder - what percentage of attendees at my presentations and training courses remember ANY of what I have to say 5 MINUTES after they leave the room?(!)

I have found 2 resources to be invaluable in helping me to get the message across.

Authors Dan & Chip Heath have written a brilliant book entitled "Made to Stick" that offers a 6 point plan to deliver messages and presentations so that people actually remember what was said.

Their guidance works.

Author Garr Reynolds leads the pack when it comes to practical advice on making effective presentations: he's written a great book and has an equally valuable blog. We've often heard the phrase "death by Powerpoint" - Garr succeeds in providing very practical tips to help us "get rid of those dot points", and use real life photography so that the visuals in the presentation support what the speaker is saying - not take over from the speaker.

His guidance works.

There are lots of other resources - but as someone who sells himself on the basis of being able to develop and deliver effective workshops and presentations, I've found all the advice I need either directly from these authors, or by following the links they recommend.

But does it work? I think I've proved that it does.

One of the assignments my firm undertakes on a regular basis is to help a number of IT vendors prepare and deliver presentations to their resellers at various "partner conferences". Naturally not all presenters take advantage of our services - but we've tracked the feedback scores of those that do, and we've measured that the presenters that follow the methods we offer receive 10% higher feedback scores from the audience compared to their colleagues that do not follow the methodology we provide.

What measures are you taking to ensure you communicate effectively? Do the people you address forget half of what you say within a few weeks?

3 out of 4 companies fail at selling solutions

2010-08-25T21:14:20+10:00

How often have we heard a "sensitive new age company" announce that they sell solutions, not products.

But how do you "successfully sell a solution" – indeed what is a “solution”? Why does McKinsey and Co report that 3 out of 4 organisations that attempt to sell solutions fail?

What do we sell when we sell a “solution”?

Many companies think that, by bundling together various “hard” products with “soft” services that they’re offering a “solution”. Often, however, this combination of products and services is indeed “just another product”.

Think about McDonalds: a “meal deal solution” may comprise a burger, fries and a drink but – instead of being able to sell this “solution” for a premium, McDonalds has to discount the offering on the basis of volume. The bundling together of separate products actually creates no additional value for the customer – and this is the essence of what makes a true solution.

A true “solution” exhibits a Gestalt aspect – “the whole is more than the sum of the parts”. By integrating together various product and service elements – and by customising these for the customer – the customer receives additional value compared to what they would have received had they broken down the solution into its component parts.

An example solution

In my IT sales days I was responsible for developing a fixed cost, desktop outsourcing solution. The focus was on maximising the productivity of each user – so we provided regularly refreshed PCs, competency based training, maintenance, repairs, telephone support, asset management etc. By providing these as an integrated whole, however, we were able to charge significantly more than we would have by providing each product or service element separately.

Our customers bought the “totality” of the product – a single source solution for improving users’ productivity.

When prospects asked us to break down the pricing into component parts – we refused! It was the “wholeness” of the product that provided the real value – the whole was much more than the sum of the parts.

What drives companies to adopt a solutions approach?

McKinsey and Co reports that companies adopt a solutions approach for 2 main reasons.

Firstly – ambitious companies look for ways to deepen their relationships with key customers, achieve more margin, and reduce competitive threat.

Anxious companies, however, can see that their core product offerings are moving towards “commodity status”, with increasing competition and much more sophisticated buyers.

Why do some firms fail?

It appears that there are 3 main reasons why 3 out of 4 companies fail to successfully develop and sell solutions.

First, some firms suffer from delusion: they believe they’re selling customised, integrated solutions – but they’re really just selling bundles of products and services. If a customer can disaggregate a solution offering – if they can “pick it apart” – then it’s not really a solution at all (think McDonalds value meal – easy to purchase the component parts separately).

Secondly, some firms underestimate the difficulty in selling solutions: solution selling has longer sales cycles, and requires a much more intimate knowledge of customers’ businesses. Sales people expert in products need to transition to become expert in customers’ businesses.

Thirdly, some firms sell solutions the same as they sell products – same sales teams, same KPIs, same approach to dealing with customers etc.

Steps to successful solution selling

The McKinsey research points to qualities exhibited by firms that have made a successful transition from selling products to selling solutions.

The most important quality of firms that have made a successful transition is that they rethink their approach to sales. They realise that the solution path prescribes a longer sales cycle, with the need to influence many more people, most of whom are very senior in the prospect organisation. In the IT sales world, for example, the majority of sales people are comfortable selling to the IT department. A solutions approach, however, will fail unless senior business managers outside of IT are consulted and persuaded.

Many successful firms replace up to 75% of their sales force, often preferring to hire industry specialists capable of intimately understanding target prospects’ businesses. They structure account teams around a customer relationship owner, and target small pools of prospects that have similar business needs. A different type of “market research” is required – how can we identify prospects suffering from business problems that our company is good at solving?

This “new look” sales team is often bonused differently: certainly revenue achieved is tracked and rewarded, but so to is the degree of additional business value that has been provided to the customer.

Does your organisation profess to sell solutions? Are you sure you're not just selling product bundles?

(The article referenced in this newsletter is entitled Solving the solutions problem Juliet E. Johansson, Chandru Krishnamurthy and Henry E. Schlissberg The McKinsey Quarterly 2003 Number 3)

"Value" is fundamental - but what does it mean?

2010-08-23T21:14:55+10:00

A favourite post here from Seth Godin - discussing why some prospects respond to our offers by saying "I can't afford it". It brings to mind the definition of the word "value" that we use during our consulting work:

VALUE = BENEFIT - SACRIFICE

When the prospect says they can't afford it, what they probably mean is that - in their specific situation - the benefits we are proposing don't sufficiently outweigh the sacrifices we are asking them to make (ie cost, hassle, interrupting them by cold calling them, making them travel to visit our retail store, keeping them waiting etc).

It's a useful concept. Value is "relative" - the prospect can only measure the value we offer COMPARED TO other offers (or indeed doing nothing). Value also has to be "relevant" - as a buyer I might be prepared to sit through the account review sessions you "force" me to have - others may well not see what they get out of it compared to the time you want them to put in.

Measuring "customer perceived value" is fast outstripping "satisfaction" as the best predictor of potential future purchase.

There's lots of good articles on Customer Perceived Value - here's a high level overview - drop me a line if you'd like something more in-depth.

Can you suggest any other reasons why your prospects might "fib" and say they can't afford your offerings?

The fundamental tenets of business success......

2010-08-23T20:35:27+10:00

I have no idea how many blogs there are on different business topics - no doubt quite a few.

What's so special about this one?

Theories and practice around topics such as planning, strategy, marketing and sales are becoming too mechanistic. It seems that in our quest for excellent business results we're searching for ever more detailed scripts and processes to follow.

Life isn't like that. Business isn't like that. Customers don't always follow the script. Nor do employees. The environment invariably throws up a double whammy.

Much is written about "culture" - consultants define it as "the glue that binds". I think we need to borrow on this analogy, and apply it to strategy, marketing and sales. Rather than a "follow the script" approach, we need to define and adhere to those CORE things that will bring us success.

So that's both the theme and name for this blog - BUSINESS BEDROCK. Let's define and stick to those core, immutable principles that will bring us success. That way it doesn't matter if we forget the process - or forget the script. If we live our business lives by the FUNDAMENTAL TENETS we can focus on living our beliefs and achieving success - uncluttered by having to remember the script.

In strategy, this probably means thinking how we match our core competencies to emerging market opportunities. It probably also means realising that the real benefit comes from the process of getting everyone together to consider and define the strategy - rather than the details of the strategy itself.

In marketing it means segmenting and then being different within that segment - focusing on customers' needs.

In sales it means identifying problems that prospects have - and then helping them solve them.

I want to build up a list of fundamentals - and share whenever I come across an article that seems to reflect this approach.

What are your "bedrock principles" by which you achieve business success? Share them through comments - or send me an email. Together let's build a foundation for business success - irrespective of the specifics of the situation.