Showing posts with label buying cycle. Show all posts
Showing posts with label buying cycle. Show all posts

Key Decisions That Determine Whether B2B Buyers Will Buy From You

Last week’s post discussed the 3 reasons that motivate B2B buyers to find and consider buying a product / service / solution:

  • Solve a problem
  • Pursue an opportunity
  • Improve performance.
In this article we’ll look at what the key decision factors are that determine whether they buy, what they buy and who they buy it from.  Based on work I’ve done over the years reviewing countless win/loss analysis reports from thousands of deals, there are always 3 key decision factors at play that determine what a buyer decides to do:
  1. Meets their needs – B2B buyers set out to find something that will enable them to pursue the goals they have established based on one or more of the 3 primary motivators and supporting objectives.  While this may be intuitively obvious to anyone who has been around B2B marketing and sales for any time, meeting the specific buyer needs based on their buying motivators and business goals is the #1 reason that determines which product / service / solution they buy.  These needs are frequently expressed as lengthy lists of requirements, Requests for Proposals (RFPs), demonstrations and other nitty-gritty details for vendors to show that their proposed solution will meet the customer needs.  While it is possible for vendors to influence some of the specifics to suit their solution, the ultimate decision is still whether the buyer believes a specific choice will meet their needs.
  2. Affordability – the most frequently mentioned reason for a deal loss from salespeople is price, but affordability for buyers is much more than just the price of the product / service / solution.  Firstly, many B2B buyers usually have underestimated expectations of what they are willing to spend to pursue the goal of the buying motivators.  Secondly, it’s more than just the purchase price – it’s the total cost of ownership over the projected lifetime of the solution.  Thirdly, it always boils down to ROI – buyers determine the value to the business for achieving the goal they identified based on the buying motivator(s).  From a vendor perspective, the discussion with the buyer should be more about value creation for the business and less about the actual price.  If you create the right value for a business, the price becomes incidental.
  3. Trust – while this is not an overt discussion topic like needs and affordability during the buying process, it is a significant influential factor that determines who a buyer buys from.  All things being equal in meeting the needs and affordability factors, buyers will choose the vendor and people they most trust.  I’ve seen cases where buyers don’t choose the best fit and most affordable option because they don’t trust the vendor and/or the people representing the vendor.  Salespeople usually put a lot of effort into building a good rapport and trust with buyers.  Trust extends to every aspect of a vendor company and all the vendor people all the buyers deal with.  Building trust with buyers should be a major objective for all marketing, sales, consulting, management, support and other interactions.
Sometimes B2B buyers decide not to decide and defer buying to some undetermined future time.  When you delve into these cases, the reason for the non-decision is probably because one or more of the above 3 decision factors wasn’t met.  The buyer doesn’t believe they can achieve the goal of the original motivators and decides against proceeding.

Vendors can significantly improve their marketing and sales performance by understanding and focusing on the 3 motivators that initiate the buying process and these 3 key decision factors that primarily influence the buyer’s decision of what they buy and who they buy it from.

Your comments are always welcome.
Copyright © 2010 The Marketing Mélange and Ingistics LLC.

The 3 Reasons That Motivate B2B Buyers to Buy

An interesting (more like disconcerting) observation from some of the work I do is the dichotomy between Information Technology vendors and buyers on why a customer buys a solution.

IT vendors tend to focus a lot on the features and functions of the solutions, their claimed technology leadership, their innovations, and how they are better than the competitors. It’s all about them and how wonderful they are and how wonderful it would be to be their customer. While these might be selling points worth mentioning, they are hardly the reasons most buyers decide to buy.

When I talk to vendors, a lot of the discussion centers around who they can sell something to and how to best go about marketing and selling it to get buyers. When I talk to IT users and buyers, they’re primarily concerned with creating value for their company. Buyers frequently need help interpreting the vendor gobbledygook and vague statements into what a particular solution actually does and how it can create value for their business.

Based on what I’ve seen and experienced over many years in the IT industry, there are three fundamental reasons that motivate IT buyers to buy a solution:

  1. Solve a problem – something is wrong or not working properly in the business that seemingly cannot be resolved with the processes and technology they already have. The scope of the problem can be in one or more functional areas or across the company. The scale of the problem may range from a serious detriment to an annoyance. The scope and scale of the problem determines the urgency and budget to resolve the problem.
  2. Pursue an opportunity – companies find new opportunities to expand or grow their businesses beyond their current confines. In many instances these opportunities require new or additional business processes and solutions (e.g. a manufacturer adding an aftermarket service center) that they currently don’t have. The scope and scale of the opportunity determines the urgency and budget to buy what is needed to pursue the opportunity.
  3. Improve performance – it could be argued that underlying every buying decision a business makes is a goal to improve performance. That’s true, but businesses do have specific performance improvement initiatives such as decreasing inventory investment or reducing days sales outstanding (DSO) that may require the acquisition of specific solutions and/or services. The scope of the performance improvement goal can be in one or more functional areas (e.g. reduce overtime wages in the service department) or across the company (e.g. increase operating cash flow). The scale of the problem may range from imminent demise if not fixed soon to a long range continuous improvement process. The scope and scale determines the urgency and budget to buy.

While all three of these buying motivators could be present in many situations, there is usually one primary motivator. Look for the primary driver and primarily focus on that, but don’t overlook the importance of the other one or two secondary motivators to support the buying decision process.

Marketers and Salespeople can significantly improve their odds of finding and converting suspects and prospects into buyers by paying attention to these three reasons that motivate buyers to buy and by connecting with prospective buyers based on why they want to buy.

In my next post, I’ll explore the next step for buyers – the three reasons that cause them to finally decide to buy and who they buy it from.

Your comments are always welcome.
Copyright © 2010 The Marketing Mélange and Ingistics LLC.

Does Your Marketing & Sales Engagement Sync with the Prospects Interests?

Despite highlighting this problem for many years, I’m still regularly dumbfounded when I see what Marketing and Sales organizations do when they engage with prospective buyers after they’ve expressed interest.  This practice regularly exasperates buyers, and I would contend that it’s a major reason buyers look elsewhere after expressing initial interest in a particular company / product / service / solution.

This is the type of scenario that leads to the problem I’m referring to:

  • Marketing formulates an appealing value proposition for a target market segment
  • A marketing campaign uses typical awareness programs such as white papers and webinars to create awareness and attract prospective buyer interest
  • A prospective buyer sees this, the specific value proposition connects with their needs and they express interest by responding to the call-to-action for the marketing program
  • Marketing immediately get the prospect into their marketing database for follow-up
  • Marketing assign a tracking identifier to designate which campaign / program / webinar / landing page / offer / etc. originated this lead
  • The marketing lead qualification and nurturing process kicks in – usually based on a set of standard scripts and progression steps to eventually get a qualified lead to Sales.

But what does marketing do with the tracking identifier that links to the specific value proposition which is the key reason why a prospect expressed interest?
  • They primarily use the tracking identifier to analyze the effectiveness of a campaign / program / webinar / landing page / offer / etc. to determine what’s working and what they should continue doing, change, update or drop.
  • However, what many marketing organizations fail to do sufficiently is to use the tracking identifier to determine how to specifically engage with each prospect relative to their specific needs – the reason they expressed interest in the first place.
  • What is frustrating for buyers is that they see a great value proposition and offer that attracts their attention, but when they express interest they are dumped into the generic marketing sausage factory.

And what happens when Sales get the qualified lead?  The tracking identifier might be visible, but is there anything to highlight what it means and identify how sales should specifically engage with each prospect relative to why they expressed interest?  From what I’ve seen over the years, sales tend to pay insufficient attention to this – they jump on the lead and use the standard selling cycle process to engage with prospects.

The buyer’s perspective and interests get lost in the internal marketing and sales processes.

And what does this look like from a prospective buyer’s perspective?  Put yourself in the buyer’s shoes.  The buyer expresses interest because a very specific value proposition attracted their attention, but the engagement process with the vendor is mostly based on the vendor’s processes and perspective to eventually get a sale.  This is downright frustrating for buyers and makes vendors look incompetent because they can’t connect the dots between why the buyer expressed interest and how they engage with the buyer.

It’s a buyer’s market; the buying cycle takes precedence over the selling cycle.  It’s tough to find prospects and convert them into sales – improve your conversions by paying attention to how your marketing and sales organizations engage with buyers relative to their expressed specific interests.

Your comments are always welcome.
Copyright © 2010 The Marketing Mélange and Ingistics LLC.

Are You Selling or Facilitating Buying for Customers?

We all know when we’re being sold to – whether it’s a straightforward advertisement, or a clever marketing campaign, or a salesperson going through their shtick.  How do you like being on the receiving end of this process?  Most of us dislike the process, but we have to play the game in order to get the information we need to ultimately make a decision that is right for us.

It’s not that we don’t want to buy, in too many instances it’s that we don’t want to buy in the manner we’re being sold to.  We’ve all experienced this frustration and possible annoyance as a consumer or business buyer.  But why do so many marketers and salespeople, especially in B2B and Information Technology, still persist with this selling oriented approach?

Ask most marketers how they approach marketing to prospective customers and you’ll hear a lot about market segmentation, demographics, value propositions, campaigns, lead tracking, lead qualification, etc.  Ask most salespeople how they approach selling to prospective customers and you’ll inevitably hear about the various stages of the sales cycle and all the predefined processes to move the buyer through each stage to closure and purchase.

Now ask a prospective customer how they want to approach buying and you’ll hear about their reasons, specific requirements, expected results, risk, trust, proof, competitiveness, etc.  Prospective buyers have their own buying cycle of what they need to accomplish in order to make a purchase decision.

So we start with an inherent conflict of interests and processes:

  • Prospective buyers have an approach and buying cycle they need to get through before making a decision
  • Marketing has an approach and process of finding possible buyers and converting them into leads for Sales
  • Sales have a selling cycle and predefined processes to take a lead and convert them into a buying customer.
And we wonder why B2B and IT sales cycles take so long.  Consider all the wasted time, effort and resources on both sides because the selling process is not aligned with the buying process.

Marketers may point out that there are specific buyer-oriented value propositions in their marketing campaigns.  That may be true, but the pitch and process is still mostly focused around the seller and driving leads and statistics through their marketing processes.

Salespeople may point out that they find out what problems and pains a specific prospect wants resolved and then align the sales process accordingly.  That may be so, but from I’ve seen, more often than not it’s more like a “show me your nail and I’ll show you how our hammer will do the job better for you” approach.

“He who buys had need have 100 Eyes, but one's enough for him that sells the Stuff.” ~ Benjamin Franklin

How are you marketing and selling to customers?  How and why do prospective customers want to buy from you?  Consider how you can move from a vendor selling approach and rather facilitate prospective customers to buy from you.

Your comments are always welcome.
Copyright © 2010 The Marketing Mélange and Ingistics LLC.

Buying Cycle – You have a customer – now what?

This last post in the customer buying cycle series, explores opportunities for marketing and sales to engage with existing customers to drive more deals.

Even though the customer has bought and successfully implemented your product/service/solution, the buying cycle continues with the customer focused on achieving the benefits and value that initially drove them through the earlier steps of the buying cycle. While a customer may not specifically be in the market to buy something at this time, the outcome from this phase of their buying cycle will determine whether they buy more from you in future and what recommendations they make to anyone who asks.

During the achievement step, responsibility for customer success is primarily with support and professional/consulting services. An effective way for marketing to connect with the customer and monitor progress during this step is to ask for a case study. Since case studies are designed to highlight customer achievements, several responses from the customer are possible including:B2B Buying Cycle

  • It’s too early, no documented achievements yet – this gives marketing the opportunity to follow-up on a regular basis to monitor the situation.
  • It’s not going well / we’re having problems / no case studies until our problems are resolved – although negative, marketing can help bring attention to the situation to get it resolved, and continue to follow-up and monitor.
  • Customer agrees to do the case study as requested – confirmation of achievement you can now put on record and publicize to attract more customers. Also opens the opportunity to develop a mutually beneficial long term business relationship with the customer.
The last step in the customer buying cycle is to have a loyal customer. If your business and product/service/solution creates value for your customer, a loyal customer will create value for your business:
  • Lifetime customer value – the total revenue from loyal customers over the relationship lifetime can be many times the initial purchase
  • Loyal customers are more willing to be positive references you can use to win other deals
  • Loyal customers will promote your product/service/solution in their business dealings generating referrals
It takes significant time, effort and resources for most B2B companies to acquire net new customers. But that’s just for the initial sale – it takes more time, effort and resources to unlock the much larger lifetime value of a customer.

IMO, the key consideration for B2B marketers is that you have two very different audiences and therefore need two different marketing strategies that translate into specific campaigns and programs for each audience:
  1. New customers – how to find and acquire net new customers – this is the lifeblood that feeds the long term viability of a business.
  2. Existing customers – how to develop customer loyalty that unlocks the significant lifetime revenue stream – this is the major source of revenues and profits for the long term.
A key consideration from this series of posts is that the customer buying cycle begins long before your sales cycle and continues long after the sales cycle is done. How do your marketing strategy and sales cycle connect with your customer buying cycle?

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Buying Cycle – What happens after you close the deal?

Continuing the customer buying cycle series, this post explores what may be the most perilous phase of the buying cycle for customers – what happens after the purchase is concluded.

Regardless of what type of product/service/solution the customer has bought, the next phase is to install/implement the solution in their business in a manner that meets the customer expectations of why they bought the solution. From a customer perspective there are two distinct steps of implementing and implemented in this post-purchase phase of the buying cycle.

During the implementing step the vendor delivers the product/service/solution and the customer commences with implementing the solution as part of their business. Depending on the type of solution this step may be a few days, several months or years. B2B Buying CycleMarketing and sales have typically moved on to finding the next deal and the vendor or third party services/consulting team is in control of the account. While marketing would not engage with a customer in regular marketing activities during this step, it should still closely monitor the situation:

  • Welcome the customer to your community – get them plugged into available resources, services, newsletters, forums, etc.
  • You want all customers to be referenceable – stay in contact and monitor progress
  • Things can and do go wrong in this step – keep a close watch on forums and social media outlets for any signs of dissatisfaction
  • Competitors may still be trolling around – it’s tough to win a deal, stay engaged to make sure you keep the deal.
Once the solution is actively running in an operational mode as part of the customer’s business without outside assistance, it’s considered implemented. Vendor engagement with customers typically shifts to support services as the primary point of contact. Every customer should be a prospective buyer for more:
  • Define what ‘more’ means in your business – product, add-ons, users, services, up-sell, cross-sell, etc.
  • Run specific marketing campaigns and sales programs to sell more to existing customers
  • Get the customer into your reference program
  • Stay in contact via newsletters, forums, customer groups, etc.
  • Ensure that support services are trained to recognize opportunities for selling more.
Staying engaged after the sale in an appropriate manner correlated to the buying cycle steps is the first step to harvest the potential lifetime value of each customer.

How do you stay engaged with customers after the sale?

The next post is the last in this series covering the Achievement and Loyal Customer steps of the customer buying cycle.

The next post explores the

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Buying Cycle – Moving to Decision and Purchase

Continuing the review of the customer buying cycle, this post explores the Decision and Purchase steps in the B2B customer buying process.

In the Decision step, the buyer evaluates the short list of potential solutions to determine which one to buy. The evaluation process usually includes a number of requirements for each potential vendor to qualify the suitability of their solution. Although not explicitly listed in the evaluation criteria, trust plays a major role during this decision process – whether the prospective buyer trusts the vendor company, product, salesperson and others they have met, to deliver what they want. Trust and credibility should have been developed by sales and marketing prior to this step and reinforced during the decision process.
B2B Buying Cycle
Sales should be in control of all interactions with the prospective buyer at this stage and Marketing should support sales as needed:

  • Remove the prospect from the regular outbound marketing process – coordinate specific marketing activity with sales to support the decision process
  • Ensure that any inbound marketing processes are aware of the prospective buyer’s status should anything for that company come in
  • Support sales with competitive intelligence, win/loss analysis, landmines to set and competitor landmine responses for the short list contenders
  • Customer references are usually requested at this stage – proactively managing the references engagement process is critical to ensure a favorable review.
The prospective buyer could decide not to proceed with any purchase for a variety of reasons.

If the buyer does select your product/service/solution, the next step is to proceed with the Purchase step. Sales are in control of the purchase process and marketing should only engage with the prospective buyer as directed by sales. Although marketing are usually not directly involved with the purchase process, there are previous decisions from marketing and product management that significantly influence the purchase decision:
  • Packaging – how the product/service/solution is packaged, sold/licensed, various buyer options, terms, conditions, etc.
  • Pricing – how the product/service/solution is priced and current pricing.
Ensure that sales were previously trained on all aspects packaging, pricing and what aspects are negotiable or not. Getting feedback from sales and customers on any pros and cons of packaging and pricing should be part of your continuous improvement process to be responsive to changing market conditions and customer expectations.

Regardless of the outcome from the decision and purchase steps, be sure to collect win/loss data for learning, analysis and future use.

The next post looks at the Implementing and Implemented steps in the post-purchase phase of the customer buying cycle.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Buying Cycle – Interest, Research & Consideration

The previous post covered the first two steps of the buying cycle to move prospective buyers from the sidelines to awareness. This post explores the next three steps of Interest, Research and Consideration in the B2B customer buying process.

During the interest step, the prospective buyer makes the connection between a problem or opportunity and the need for a particular product/service/solution. This may happen from either direction:

  • An internally known problem or opportunity that needs to be resolved. The prospective buyer initiates the interest. This is what most marketing and sales organizations tend to look for, but it may only represent a small part of all potential opportunities.
  • An external source instigates the solution need for an overlooked problem or opportunity. Most companies have many unresolved problems and opportunities but don’t take action because of entrenched processes and/or daily workload priorities. If your marketing and sales outreach can instigate the interest, you’ll have the inside track for the sale.
B2B Buying CycleNow that the prospective buyer has identified the need, the next step is research to determine the right product/service/solution for their needs:
  • Internally, to determine and get agreement on the specific requirements of what would be the right solution for the problem or opportunity. Companies frequently use consultants, mavens or other trusted sources to assist with defining requirements. Marketing needs to ensure that these third parties have a good understanding of your solution.
  • Externally, to determine a list of possible solutions and suppliers. This is usually a long list of all relevant possibilities. If you have educational and authoritative materials readily availability from multiple sources to support this research activity, you can shape the requirements to align with your value proposition.
Once the buyer has the requirements of what is needed and a long list of possible solutions and suppliers, they’ll move to the consideration step. This is where sales and marketing usually become actively involved with the prospect, but can also be a point of disconnect. The buyer wants to get more information, do comparisons and analyze which are the top 2 or 3 most suitable solutions to move into the next step for making a decision. Some common disconnects for sales and marketing to consider during this step:
  • The buyer is looking for specific information which may only be accessible from your company after providing registration information on your website. If they register, does marketing respond to their specific circumstances or are they just dropped into the lead generation process?
  • Sales want to get into selling mode, but what may be most beneficial for the prospective buyer is consultative guidance from industry/domain experts in your pre-sales organization. Showing the knowledge and expertise your company can provide is the most effective sales approach during this step.
  • The buyer gets disconnected from the underlying business objectives with information overload during the comparison and analysis process. Discussions with the buyer should focus on the business problem or opportunity and the value your solution provides.
Interest, awareness and consideration are separate process in the buying cycle that buyers typically work through. Recognizing these steps in your marketing, sales and lead management processes can help you better connect with prospective buyers.

The next post explores the Decision and Purchase steps in the B2B customer buying process.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Buying Cycle – Sideline Goldmine

Last week I posted the first in a series blogs about how marketing and sales should engage with the customer’s buying cycle to uncover and align with opportunities from the prospective buyer’s perspective. This post delves into the first two steps of Sidelines and Awareness in the B2B customer buying process.

There are two distinct groups of prospective buyers with different characteristics:

  1. Existing Customers who have bought something from you previously but are not considering any additional purchases.
  2. Prospective Customers who fit your target market but have never bought from you before and not actively looking to buy anything related to what you’re selling.
B2B Buying CycleThe vast majority of your prospective buyers are on the sidelines not actively looking to buy anything related to what you’re selling. The opportunity is to move them to the next step of awareness using tactics such as:
  • Monthly newsletters to existing customers and opt-in subscriber list that highlights the potential value of your various offerings.
  • Educational white papers and eBooks to create awareness about the challenge or opportunity these companies face and potential solution approaches.
  • Article marketing in relevant publications and online properties to create awareness and establish credibility.
  • Regular webcasts with educational value to create awareness, develop thought leadership and establish credibility in the target market(s).
  • Salesperson calls or visits to existing customers – not specifically to sell something – just being visible and engaged is a great way to generate awareness.
Prospective buyers in the awareness phase are aware of the general category or type of product/service/solution you are selling, but have not identified a need for it yet. The opportunity is to move them to the next step of interest:
  • IMO, one of the most effective methods to stir prospective buyer interest is the “others like me” approach.
  • Show them how other companies similar to theirs have solved problems and achieved greater success.
  • Show them how others in roles like theirs have achieved personal recognition and success by making their companies successful.
  • Use selected case studies and video testimonials specifically targeted to the interest you want to generate.
  • Depending on the service/product/solution, assessment or benchmarking tools for prospective buyers to gauge themselves against best in class peers are also effective for generating interest to move to the next step.
What methods have you found to be effective for identifying and moving prospective buyers along the buying cycle in these early phases?

The next post explores the Interest, Research and Consideration steps in the B2B customer buying process.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

The Buying Cycle Disconnect

Talk to salespeople about their process to engage with prospective buyers and you’ll hear all about the sales methodology and sales life cycle they use. Marketing also has a life cycle for designing, developing, launching and executing campaigns plus another life cycle for managing, nurturing and distributing leads. These life cycles are all necessary and important.

However, these are all inside-out processes on how you want to engage with prospective buyers or how they should engage with you. That’s an unrealistic perspective.

Prospective buyers have their own buying life cycle that they will follow. Whether or not it’s a defined methodology, all B2B buyers will follow a similar process for acquiring whatever product/service/solution they need. Customers want to go through their buying life cycle processes and will buy when they are ready. You can achieve much better results by understanding and connecting with your prospective customer’s buying life cycle. I’m not suggesting you put the customer in the driver’s seat – sales still needs to manage and control the process, but to better align your marketing and sales processes with the buying cycle and the outside-in perspective.

Although buying cycles vary by industry, product, service, solution, etc. there are common processes that most buyers want to step through. The diagram to the right outlines the major steps in a generalized B2B customer buying process:B2B Buying Cycle

  1. Sidelines – the vast majority of your prospective buyers are sitting on the sidelines, not actively looking to buy anything related to what you’re selling.
  2. Awareness – prospective buyers are aware of the general category or type of product/service/solution you are selling, but have not identified a need for it yet.
  3. Interest – the prospective buyer has identified a problem or opportunity that needs to be addressed and explores the issue in greater depth.
  4. Research – the prospective buyer defines their requirements and actively researches a long list of possible solutions for the identified problem or opportunity.
  5. Consideration – the prospective buyer finds suitable solution sources, gets more detailed information and does comparisons to compile a short list of possible solutions.
  6. Decision – the short list solutions are evaluated in various ways including customer defined demonstrations, tests, in-depth analysis and other methods to find the most suitable solution. The buyer could also decide not to buy anything. Marketing is usually disengaged at this point.
  7. Purchase – the purchase is made and everyone is happy for a fleeting moment. Sales usually disengage at this point.
  8. Implementing – the implementation process to get the solution installed and working for the customer in the manner they expect. Vendor or third party professional services usually assist customers with this step.
  9. Implemented – the solution is actively working for the customer. Vendor engagement with customers is primarily through support services from this point forward.
  10. Achievement – the customer (hopefully) begins to realize the benefits they set out to achieve from the solution.
  11. Loyal Customer – cultivating a satisfied and loyal customer has many benefits including additional purchases and referrals.
Although some of these steps in the buying cycle may seem beyond the interests of a marketing and sales discussion, I’ve specifically included them because they are frequently overlooked opportunities for marketing and/or sales to be engaged.

In the next several blog posts, I’ll delve into each step in more detail to explore how marketing and sales can engage more effectively and productively in the customer buying cycle to produce better results.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.