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Whatsalespeopleneedtoknowaboutthenewb2blandscape.pdf

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SALES & MARKETING

What Salespeople Need to Know About the New B2B Landscape by Frank V. Cespedes and Tiffani Bova

AUGUST 05, 2015

Selling has always been more about the buyer than the seller. So any effective sales

model must adapt to changing buying protocols, not ignore or resist them. This is a

big transition for firms whose marketing, sales-training and enablement tools, and

wider organizational processes reflect outdated assumptions about purchasing in

their markets.

For a century, buying has been framed in terms of moving a prospect from Awareness

to Interest to Desire to Action (AIDA). The AIDA model and its variants are the basis

for sales funnels at many B2B firms. The typical funnel starts with a marketing-

generated lead for a “suspect” that, after qualification, becomes a “prospect,” and

then a customer through steps that are measured and managed. In each step, sales

people are expected to perform a series of tasks, usually sequentially, in order to

close. It’s an inside-out process and CRM systems are there to provide data about

progression (or not) through that company’s funnel steps — the famous “pipeline”

metrics that dominate so much talk about sales.

But Gartner research (see here and here) indicates a very different contemporary

buying reality. Rather than moving sequentially through a funnel, buyers actually

work through four parallel streams to make a purchase decision.

Let’s examine these activities, one by one:

• Explore: Here, buyers identify a need or opportunity and begin looking for ways to

address it, usually via interactions with vendors and self-directed information

search on the internet.

• Evaluate: Buyers take a closer look at options uncovered while exploring, again

leaning heavily on self-directed search and peer interactions as well as vendor sales

representatives.

• Engage: Buyers initiate further contact with providers (or accept proposals from

providers) to get help in moving toward a purchase decision.

• Experience: Buyers use a solution, increasingly in pilots or proof of concepts, and

develop perceptions about its value based on that usage.

With these changes in mind, understanding where customers are, and how to interact

with them appropriately in a given stream, are now central to effective selling.

Here are a few tips and insights to help you navigate these shifts.

The sales force is more important than ever. Regardless of which path customers

take, or in which order they take them, they want to deal with people who can help

them move toward a purchase decision, be the internal champion at the vendor, and

bring it together for that customer. In fact, B2B buyers report that, compared to other

sources of information, these interactions are the most influential in their decision

making process:

Find this and other HBR graphics in our V I S U A L L I B R A R Y

The source considered the least influential is social media. Don’t believe the hype.

Sales people have not been replaced by digital, and providing relevant solutions

remains key in most B2B buying scenarios.

One reason why the sales force remains so important to the B2B customer is that most

products and services sold to business organizations are components in a wider usage

system at that buyer, and customer value ultimately resides in that usage, not just the

individual product.

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To add to that, business buyers must justify a decision to others in the organization,

especially as capital expenditures flow less liberally in many industries since the

financial crisis of 2008. And you are naïve or spending too much time on your

smartphone if you believe that a combination of economics, solution identification,

product application, risk management, and political journey through the buyer’s

organization is now handled predominately online in most buying scenarios and

without knowledgeable and savvy sales help.

The research also found that, across all buying streams, buyers emphasized that

interactions with sellers — technical demonstrations, sales presentations tailored to

my company’s need – should be about the buyer’s needs. Among the least valued

interactions are sales calls in response to registering for webinars or events. That is,

core solution-selling and account-management skills still matter.

Lastly, although buyers certainly use online search, they use it as a complement to,

not a substitute for, interactions with sales reps, channel partners, and others at their

suppliers. If anything, access to information online has increased awareness that

relevant alternatives and best practices about product applications and service

requirements often reside outside one’s firm. In turn, this drives the B2B buyer’s

propensity to seek information from vendors who work with companies across

regions or vertical segments, and who can use that knowledge to help frame and

deliver solutions for that buyer’s needs.

Buying is a continuous and dynamic process. Specious talk about disintermediation

of salespeople obscures the real issues facing firms. Sales people are not disappearing,

but buying processes and therefore sales tasks are changing.

For example, note that in the second figure above customer references are a close

second in terms of influence, and the nature of references has changed. In the past, a

buyer might ask for references and that seller would cite a few satisfied customers.

But through the web, customers connect with each other and get unedited versions of

others’ experience through review sites such as bazaarvoice and PowerReviews, and

they gain access to thousands of people at other companies who can share

experiences and options through community sites such as SAP Developer Network

and Marketo Marketing Nation.

Also playing important roles are events, white papers, and the seller’s website —

activities that are typically part of marketing’s domain, not sales. This puts pressure

on a notoriously fraught relationship: improving coordination between sales and

marketing, two functions that are increasingly interdependent but different in their

perspectives and procedures. The marketing–sales relationship now tops the agenda

of concerns in a survey of B2B executives.

More generally, it’s important to recognize that web sites, blogs, and other digital

media have made vendor organizations more visible and transparent to potential

buyers, which has disrupted the inside-out funnel approach. Prospects now touch

your brand and company at many different points (online, offline, marketing

collateral, and so on), when they want, and each touch has an impact on selling tasks.

Buyers value interaction with others at your firm besides the sales person (e.g.,

product specialists, technical experts, professional services personnel, delivery

personnel, pre- and post-sales applications resources). In their buying streams, they

expect the rep to orchestrate those interactions purposefully, and efficient

coordination of these interaction points must be reflected in an effective 21 -century

go-to-market strategy.

Finally, if you consider the streams that now characterize B2B buying and what

buyers value in their suppliers’ behaviors, a big disconnect becomes apparent. Despite

huge advances in technology over the past two decades, most sales models and

performance practices are the ad-hoc accumulation of years of reactive decisions,

often by different managers pursuing different goals. This is why many B2B sales

models firms are incapable of dealing with the reality that buying is now continuous

and dynamic — an on-going movie, not a selfie or snapshot in a funnel.

Choices are often false. Despite what you often hear, no single tactic — e.g., a given

selling methodology, “challenging” the customer, or more “big data” analytics — will

address the new reality. Aligning buying and selling is a process, not a one-shot deal.

Going forward, many B2B sellers will need to reconfigure their selling processes more

effectively and efficiently for each buying stream. They should not waste lots of time

and energy debating whether to be online or in-person, interacting via the web or

through sales reps, digital or human. They need to do both, and create the right mix

for their go-to-market programs.

It’s also important that every group within an organization that deals with customers

has a shared vision of how customers buy and, more importantly, a clear sense of

their company’s strategy. The cross-functional communication and coordination that

is required to navigate this change is the job of leadership. Is your organization, not

just your sales force, ready to deal with this purchasing reality?

Finally, to paraphrase Churchill, it is not “the end of solution sales” and it’s not the

beginning of the end. But it should be the end of glib generalizations about sales and

selling, which remain complex, changing, and people-dependent activities in most

B2B markets. As a leader, understanding how buying really works is the place to start

in order to spur effective selling, profitable growth, and better resource allocations in

your firm.

Frank Cespedes is a Senior Lecturer at Harvard Business School and author of Aligning Strategy and Sales (Harvard Business Review Press).

Tiffani Bova is a Research Vice President and distinguished analyst at Gartner, where she focuses on sales and go-to-market strategies.