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…
Status quo bias
Based on ground-breaking research by Nobel Prize winning behavioural economist Daniel Kahneman (author of the best-selling “Thinking, Fast and Slow”), the status quo bias effect recognises that change is usually perceived to be risky.
So unless your customer has an urgent and compelling reason to act, they will usually prefer the comfort of the status quo. It’s no wonder that so many apparently promising sales opportunities end with the customer deciding to “do nothing”.
The implications for value selling are clear: if you are to persuade your customer of the need for change, you need to help them recognise that the status quo is unsafe. You need to contrast the threats, risks and consequences of their current path – the cost of inaction – with the potential benefits of realising the significant opportunities that lie before them – the value of change.
Why this is important: when your customer fails to recognise sufficient contrast between their current situation and their future potential, they are likely to stick with what they know.
Kahneman’s research also found that decision-makers were 2-3 time more likely to take decisive action in response to the threat of loss than they were in response to the opportunity for gain. This runs counter to the instincts of many less experienced or less effective sales people, who tend to be far more inclined to focus on the opportunity for gain than the threat of pain.
The implications for value selling are clear: you need to leverage loss aversion (and challenge their status quo bias at the same time) by helping your customers to recognise all the potential current threats to their business performance.
This requires that you encourage them to confront the undervalued implications of issues they may already be aware of, as well as introducing new and previously unrecognised threats to their strategic business goals.
Why this is important: selling the upside of implementing your solution may not be enough to persuade your potential customer to place an order with you – you will significantly improve your chances if you also help them to believe that staying as they are is an unacceptably risky strategy.
Research published by the CEB in “The Challenger Customer” found that the chances of a positive purchase decision declines in proportion to the number of stakeholders involved in the process. When a single individual is involved there is an 80% chance of success, but the number declines rapidly until – when six or more stakeholders are involved – the chances of reaching consensus about whether and how to act fall below 30%.
The CEB’s latest research shows that the average number of stakeholders in a typical high-value complex B2B buying decision has steadily risen to 6.8 – and that number continues to rise. The implications for value selling are clear: if you cannot identify and support a powerful champion and help the buying group as a whole to achieve consensus around their preferred option, their decision-making process is likely to slow down, stall or be abandoned completely.
Why this is important: The most common outcome of a complex B2B buying journey is now a decision to “do nothing” – and the most common cause is the failure of a large and unwieldy decision-making group to achieve a consensus for change.
The impact of early influence
BANT (budget, authority, need and timeframe) used to be a popular means of qualifying sales opportunities. It encourages sales people to disqualify early opportunities that are not yet formal projects. This is a thoroughly dangerous conclusion: Forrester found that the vendor that did the most to shape the prospect’s vision of a solution wins 3 out of 4 subsequent purchase decisions.
Vendors that instruct their sales people to only pursue BANT-qualified opportunities put themselves at a huge disadvantage. The implications for value selling are clear: sales people need to be encouraged and enabled to proactively target and engage early with people and organisations that satisfy their “most valuable opportunity” profiles and to invest in influencing the prospect’s agenda before the emergence of a formally-defined and funded project.
Why this is important: it’s important to ignore the naysayers who claim that the average B2B buyer is 57% of their way through their decision process before they want to engage with a sales person. This has never been true of complex high-value first-time B2B purchases. The sales person who does the most to shape the prospect’s vision of value from an early stage emerges with a huge competitive advantage.
Adapting your sales strategy
So – how should you adapt your sales strategy to take account of these 4 key factors? Here’s what I recommend:
- Equip and encourage your sales people to promote the need for change before they promote the benefits of your solution – and if their prospect appears to be interest in your solution but has no significant business reason to change, coach your sales people to rigorously qualify any such opportunities before committing any significant resources in pursuing them
- Coach your sales people to focus on their prospective customer’s cost of inaction as much as on the benefits of implementing your solution, thereby reducing the risk that your customer might like what you have to offer, but decide to stick with the status quo and do nothing – because what they are doing today is at least adequate for the immediate needs
- Insist that your sales people identify and where possible engage with all of the key stakeholders – and if they are over-dependent on one customer contact in any significant opportunity, red-flag the deal as having a very high-risk factor and look for alternative creative ways of reaching and influencing the other members of the decision group
- Systematically profile and target the most likely business sponsors within organisations that match your ideal customer profile, and seek to proactively influence their thinking from the earliest possible stage in their decision journey
Being aware of modern B2B buying behaviour – and taking steps to deal with it – is just one of the recommendations in our latest step-by-step guide to implementing an effective value selling strategy. You can download your copy here. Please let me know what you think…