The 2013 sales results are in for B2B companies and they are disappointing.
Sellers are struggling and buyers are in charge.
Is it time to align our sales and marketing organizations around how buyers actually buy and to develop a language and process that efficiently facilitates the buyer’s journey?
Findings in CSO Insights 2014 Sales Performance Optimization Survey indicate that in 2013:
· Only 58.2% of reps made quota,
· The burden for surfacing leads continues to fall on salespeople
· Salespeople are having more difficultly converting qualified leads to first conversations.
· Win rates of forecast deals are lower on a year-over-year basis.
· Poor forecast accuracy is a sales management problem to be addressed
Scott Santucci from analyst firm Forrester, suggests that leads fail to make it through the sales process at least 80% of the time.
What is poorly understood is why and what levers to pull to address the issues above.
Looking through the Wrong Lens?
Sales performance metrics are derived from sales qualification steps and the general approach of forecasting based on the sales funnel is obsolete.
Sales funnel process and metrics were inherited from an era when salespeople were “masters-of-the-universe”, as described by Tom Wolfe.
While buying behavior has changed radically, sales and marketing organizations are struggling to adapt.
A symptom of the problem and contributor to forecasting inaccuracy is that salespeople typically think their sales opportunity is one or two steps in advance of the buyer in their cycle.
Buyers are in Charge of their Buying Process
Much recent debate about the point at which salespeople are engaged in the buying process motivated me to write an in-depth review of buying-selling process, which is soon to be published under a provisional title, “The End of Selling”
Buyers acquire technology products with or without the help of the vendor and will engage sellers based on their tolerance for risk. Early adopters have a higher tolerance for risk and will engage vendors of disruptive technology earlier in their buying process.
According to Forrester, 9 out of 10 meetings salespeople have with buyers contribute no value from the buyer’s perspective as salespeople are unable to contribute insight and connect the dots between the buyers situation and their product.
Why would buyers wish to speak with salespeople in this scenario? What value do salespeople add when a technology product has matured into the mainstream?
Yet we continually force buyers into meetings with salespeople as part of “our sales process”.
Facilitation of a buying process is the future of buyer-seller interaction. This requires new technology, process and thinking to engage buyers responsively in the correct context.
It’s called Inbound Sales and we can already seeing the fruits of the change in approach.
A Universal Buying Process
There is a universal process that all organizations and individuals follow to reach purchasing decisions exceeding the disposable monetary threshold. This process is universal and linked to human nature, which explains why it does not vary across cultures.
Every purchase goes through predictable steps formally or informally, with or without the vendor.
It’s easy to remember as it has huge I-M-P-A-C-T on organizational performance.
IMPACT is a concept from the book “Why Killer Products Don’t Sell” by Dominic Rowsell and Ian Gotts. You can download a whitepaper on Killer Products concepts here.
Mapping out the Buying Process
I – Identify | Someone or something (e.g.: brainstorming) triggers the need for an investigation into satisfying a competitive disadvantage, need to reduce risk, or achieve revenue or profit goals.
* Possible first light touch on your Website, assuming you get found, most vendors unaware.
* Joint Venture discussions start here.
M – Mentor | Someone in the buying organization is designated, or decides to run with an investigation into feasibility of satisfying the need. That someone (we call them Mentor) will become your point of contact for the initial conversations.
* Reads blogs, downloads your ebooks, views Slideshare which is why inbound is so important
* Should not appear in the forecast, this is a marketing lead
* Early adopters will engage innovative vendors
P – Position | This is where a buying process starts becoming real – meaning that a need or objective is defined, funds and resources start being allocated to achieve the objectives outlined.
* Not qualified until it passes this phase through to Assessment, should not appear in forecast.
* Most leads die here; lacking a strong champion, consensus, or outgunned by competing projects
* Mid-funnel, buyer looks at demo’s, webinars, may engage early mainstream vendors
A – Assessment |This is the due diligence phase where feasibility is assessed, risks are discussed and debated.
* Early majority buyers engage mainstream vendors, i.e. 50-70% through their buying process.
* Opportunity appears in the forecast for the first time
C – Case | Case is where the business needs are converted to a real project or product specifications.
* Typically when an RFP shows up
* ROI calculators, social proof needed
T – Transaction | Transaction is the business phase for the sale. Prices are discussed and negotiated and the fit is determined for a relationship moving forward.
* Beware the late invitation to respond to an RFP, unless you are a commodity player.
By creating a common understanding and vocabulary, based on how buyers actually buy, we create opportunities to connect and communicate with buyers in their process.
More importantly by optimizing our value chain to best our serve buyers in their process, we create opportunities to reduce Cost Of Sale and improve profitability.
When you share with buyers the IMPACT concept of their buying approach and a desire to best serve them, they will generally agree with it and tell you exactly where they are in the process.
The alternative is to do what you have always been doing, but the results from the survey show that ithe old way is producing steadily declining results for most salespeople.
This post is the first in a series of posts excerpted from our new eBook. Sales Productivity Tips from the Experts.
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