In Bill Clinton’s successful 1992 presidential election campaign, a sign famously hung in his Little Rock campaign headquarters with the following simple message: “it’s the economy, stupid”.
In today’s risk-averse buying climate, the message to ambitious B2B sales professionals seeking to win the votes of their prospects might have a familiar ring: “it’s the economics, stupid”.
Rational, emotional or financial?
I don’t mean to suggest that rational or emotional factors are irrelevant to high-value B2B sales, but the involvement of multiple stakeholders and the nature of the decision making process means that economic factors – and financial language – play a central role in justifying most buying decisions.
If companies are to invest in resolving them, issues need to be associated with economic consequences, and by and large this revolves around avoidable costs or incremental revenues. Until and unless it is compellingly obvious that organisations can make or save significant amounts of money, they are unlikely to spend money on making a potentially risky change.
Return on Investment isn’t enough
Even believing that there is a strong return on investment (ROI) isn’t enough to ensure that the need to change will be accepted or that the buying decision will be approved. No matter how strong the project ROI appears to be, it never exists in isolation. It will always compete for funds against other (often completely different) projects or the attraction of simply keeping the money in the bank.
ROI models are based on assumptions that bias the conclusions (whether the assumptions are good or bad may depend on whether the vendor or the prospect calculated them), but they rarely take account of the execution risk that is associated with any change. Some projects deliver the desired outcomes, some exceed their goals, but many fail to achieve anything like the promised results, and your stakeholders are factoring this – whether formally or informally, consciously or unconsciously – into every significant decision they are called upon to make.
The least risk option
There’s a significant body of research suggesting that B2B buying decision teams are strongly influenced by the desire to mitigate risk when deciding if and how they need to implement change programmes (which, let’s face it, are what most significant purchases of complex solutions involve).
So it’s not enough for an organisation to emerge as the favoured vendor – they also have to be perceived as the least risk of all available options, including the all-too-popular decision to “do nothing” about the problem – at least for the moment.
The consequences of inaction
So it’s clear that having a compelling ROI – though necessary – isn’t going to be sufficient to win deals in today’s climate. In addition to strong benefits, vendors have to ensure that they help the prospect’s stakeholders identify, articulate and elevate the consequences of inaction. The consequences of inaction are all about what is likely to happen if the status quo was allowed to prevail.
So some of the most important questions your sales people can and must ask include “why is this issue important to you now?”, “have you tried to address this issue before, and what were the results?”, “what would happen if you failed to resolve this problem now”, and “who else would be affected if the current situation continued?”.
Where’s the value?
These are thoughtful questions, and frequently stimulate the prospect to think differently about the issue they have described to you. They often help you gain access to other stakeholders. But you should consider it a huge red flag if despite your help and after due consideration your prospect is still unable to articulate significant economic consequences of failing to address the issue.
Even if they are keen to continue the conversation, unless you can use the consequences of inaction to elevate their need from merely interesting or important to urgent, there’s little likelihood – no matter how positive your conversation – that the deal will close any time soon.
Of course, this is not a reason to abandon the prospect – simply to recognise that there is still work to be done to educate them, and/or that you may need to wait for, or try to create, a trigger event that will serve to establish clear economic benefit, urgency, and the need to take action.
Take a critical look at your sales pipeline? How many of those opportunities are associated with a clear economic impact that has been acknowledged by the prospect? How many of them are associated with clearly defined consequences of inaction? What does this understanding do to your sales forecast? And how can you help your sales people, and your prospects, to eliminate risk and create an unimpeachable (back to Bill Clinton again) case for change?