Two illuminating research studies were published this year that really shed light on the challenges that B2B companies, particularly their marketing, sales and business development teams, face in our current environment. With rapid changes in technology, consumer behavior, and information consumption, management teams must continue to seek out ways to deliver value and close the gap between buyers and sellers in the B2B world.
It is no coincidence that the two studies are:
The B2B Elements of Value (March-April 2018 Issue of Harvard Business Review)
The Growing Buyer-Seller Gap (CSO Insights, ©2018 Miller Heiman Group)
Both reveal challenges in different areas as ‘delivering value’ is much more of an operational execution item, while closing the gap between target buyers and your business development team is a purely marketing and sales issue. There are, however, key takeaways for marketing strategy in both – certainly there is a communication element to delivering value. In addition, communicating to prospects how you execute your distinctive competence to your current customers is a critical piece of marketing.
Here are some big picture takeaways.
Challenge #1: Delivering Value
Delivering value in the B2B world isn’t what it used to be. Building a product that meets certain specifications, is delivered at an acceptable price, and complies to basic regulations and the ethics of the customer’s organization aren’t differentiators anymore. They aren’t even enough to get you into the final decision process. Chances are if cannot deliver these elements to a prospective company, you don’t even exist in their eyes. The authors of this study – Bain & Company Partners Eric Almquist, Jamie Cleghorn, and Lori Sherer – plainly point this out in their research. Designed in a form of Maslow’s’ hierarchy of needs, they’ve created a 40 element pyramid with the most basic needs driven by data and facts at the base, rising to the pinnacle with the more subjective, higher value elements that tend to be personal and inspirational.
While it is hard to ‘sell’ purpose or vision (vision is the peak) in some cases, it is important to note where customer’s criteria are headed. After all, buying decisions are often made in teams in the B2B world and those teams are made up of people. Those people have responsibilities in their organization and there are increasing consequences in the decisions they make. Organizations, in general, are more flat. People are more productive and are given more accountability – with that comes pressure to deliver. So if a vendor is speaking not just about functional values of increasing revenue or decreasing cost or scalability, but talking about how they will save time, bring stability to a process, improve transparency or provide the ability to integrate with current technology, they are tapping in to a powerful set of decision elements.
Viewing the pyramid, one can quickly see what layer they or their sales teams most often focus on when talking to prospects and customers. Keep in mind the further up the pyramid you can discuss and deliver, the more loyalty the customer will return to your company. While it’s virtually impossible to deliver all 40 elements, it is important to note that we should all be striving for the layer above our comfort level, wherever that may be.
One project we often like to undertake for our clients is an in-depth customer satisfaction survey built around the ‘Net Promoter Index’ methodology. It is a process that is invaluable, both in terms of the client’s management team helping to construct the survey, but also when the final summary of responses is revealed. It is always an eye-opener as it either strongly reinforces that they are executing at a high level or illuminates areas for focused improvement – oftentimes both. Either way it provides a clear roadmap for the elements of value that the company should be focused on delivering and communicating to customers and prospects.
Competition is getting fiercer. Technology is allowing for fast and easy dissemination of information. What are you communicating about your company? If you can’t clearly answer that question, it is being done for you in a variety of different ways, likely either by your static, outdated website or by your competition.
When you focus on what matters to the people making buying decisions in your client companies, it becomes easier to craft a strategy for marketing the right elements of value that will help your company stand out from the crowd.
Challenge #2: Closing the Gap
According to the most recent research, barely more than half (53%) of salespeople are meeting or exceeding their quota. While that is alarming data recently published in Miller-Heiman’s World Class Practices Study, more concerning is that this is the 5th straight year of decline. That certainly sounds like a trend.
Business buyers are changing and evolving very fast right now. They are bringing their own consumer habits, driven by technologically-fueled personalization, connection, and immediate fulfillment. That evolution is creating a tougher expectation to meet for many B2B sales teams. Combine that with the fact that salespeople are generally slow to change, like to stick with what works (even if it doesn’t anymore), and stay within their comfort level and you get a Buyer-Seller gap widening that makes selling more challenging.
Their survey of 500 B2B buyers in mid-size to large companies making decisions of $10K or greater yielded some interesting findings. There’s good news and bad news.
The good news is that, despite artificial intelligence and self-service models increasing, nearly two-thirds (65.2%) of buyers still find value in discussing their problems with a salesperson. Additionally, however, only about a third (31.8%) indicated that sellers were exceeding their expectations, which means the rest were falling short of that metric. While over 60% said they were meeting expectations, buyers might not miss them if they were replaced by a better source of relevant information.
Which brings us to the bad news: buyers look elsewhere to solve problems. When we start drilling down more on customer experience, a grimmer picture presents itself. When asked to select 3 resources out of a list of 10 that buyers view as a preferred resource to solve a business problem, vendor salespeople came in 9th out 10.
Further, less than a quarter (23%) selected sales as a top 3 resource
One key takeaway in this section is what did place in the top 3 of ‘Buyer Preferred Resources Used to Solve Business Problems’:
- Subject matter experts from industry or 3rd parties (43%)
- Past experience with vendor (35.8%)
- Vendor websites (35.4%)
Have you been thinking about redesigning or upgrading your website? Now might be a good time to take that more seriously.
In addition, the research revealed further evidence of what we’ve known for nearly half a decade. That buyers are making decisions well before engaging sales.
As the graphic illustrates, over 70% of buyers fully define their needs before engaging a vendor, and nearly half (44%) are identifying the solution without sales input. If business development and salespeople aren’t engaging while buyers are learning and prioritizing their needs, then they are asking questions to learn what customers have already discovered for themselves. That is not delivering value.
So what do buyers want? The research found that four items appeared at the top of nearly every list:
- “Understand my business, know me.”
- “Demonstrate excellent communications skills”
- “Focus on post-sale”
- “Give me insights and perspective”
The good news is these are all attributes that are attainable. The bad news is that most business development teams have been focused on them for quite some time and are still not making a dent in buyer’s eyes.
How it looks from the Sales Side
When Miller-Heiman asked sales leaders to assess how their customers viewed them, they were given five choices. Here is how it broke down:
- Trusted Partner …………..(7.5%) HIGH Performers
- Strategic Contributor ….(14.8%)
- Solutions Consultant …..(32.7%)
- Preferred Supplier ………(23.2%)
- Approved Vendor ……….(22.0%) LOW Performers
As you can see, less than a quarter felt as though customers view them as trusted partners or strategic contributors. While it’s encouraging that the largest group did believe they were viewed as solutions consultants, it still illustrates how far sales and business development has to go to close the gap.
The Bottom Line
We all know we are living and working in an environment driven by rapid change. Oftentimes, it can feel fuzzy or difficult to point our teams in a specific direction, get them focused in that same direction, and start moving together. A great place to begin is by talking to your customers and ask them what they like about your company, what keeps them up at night, and what problems your company might begin to help them solve. This focuses your team on them, as well as on the values that your customers care about and that you can push your company to deliver.
Get your team out of their comfort zones, and make sure that you are communicating these efforts both internally and externally. The external strategy should include a vibrant, actively managed and responsive website geared towards showing customers how you are delivering value for your customers.
If you start with these actions, you’ll begin to close the buyer-seller gap.
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