In any high-value complex B2B sales environments 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 things 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.
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”), status quo bias 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 our 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.
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 already aware of, as well as introducing new and previously unrecognised threats to their strategic business goals.
Research published in “The Challenger Customer” proved 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 fall below 30%.
Their latest research shows that the average number of stakeholders in a typical high-value complex B2B buying decision has steadily risen to 10-11 – and the 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.
The Impact of Early Influence
BANT (budget, authority, need and timeframe) is a previously 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.
These four factors play a pivotal role in complex B2B buying decisions, and your sales people ignore them at their peril. Your value selling strategies and tactics must reflect the need to challenge the status quo, to leverage loss aversion, to avoid decision paralysis and to ensure that you reap the benefits of influencing your customer at the earliest possible stage in their buying journey.
And that, of course, is precisely what our value selling system® was designed to do…