Archives for posts with tag: Buying

A few years ago, I used to work with a company called The TAS Group. They invented something called the Sales Velocity Equation, a metric for sales effectiveness.

It was a really simple and powerful way of thinking about how effective a sales person or organisation you are. In a nutshell, your sales velocity for a given time period (let’s say a quarter) is proportional to the total number of qualified deals you work during the period, multiplied by the average deal size, multiplied by the percentage of deals that you win, the total then divided by the average sales cycle length for those won deals during that period. It’s all about speed, the implication being that if in the next period you can improve the factors above the line and reduce the sales cycle length, your speed – or sales effectiveness – increases. Good, huh?

On a number of occasions I suggested that the natural corollary to this is the buyer velocity equation, but my thoughts were not bought into, which is fair enough. I think it still has merit though.

If you’re a B2B buyer – and I suppose you could think too about yourself as a B2C customer or consumer, offline or online, though it’s nowhere near as elegant – you want to be as productive a buyer as you can.

It follows, then, that your productivity within a certain period is a function of the number of projects you have tabled, the average size of those projects, the amount of projects you get off the ground, and the length of time from project conception to project kick-off, or even to project completion. The greater the projects volume and project size, the greater the percentage of projects you get off the ground, and the quicker you get them off the ground, the more productive a buyer you are.

Make sense to me anyway. In the same way as the sales velocity equation, it helps you strip away the waste and the unnecessary and focus on the small number of important levers of success.

 

 

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In a previous post, I talked about allowing the buyers who know what they want to do their thing and not getting in their way. In many businesses, however, buyers need help buying. They need educating, guiding, encouraging, challenging and persuading.

You may lament that your buyers don’t know how to buy. This may be true, but it’s a cop out on your part. They don’t know how to buy for a variety of reasons. Perhaps you don’t make it easy for them. Perhaps they’re too busy. Perhaps they haven’t acknowledged they need to buy. Perhaps they hardly ever buy this sort of thing – or even they’ve never bought this sort of thing before – and so why on earth should they be as close to this as you are?

We all make the mistake, once we’ve been in a company a while and have come familiar with how our stuff works, of thinking customers are interested in our stuff, never mind understand it.

Spend time thinking about your buyers. Think about the problems they have and the options they have to address those problems. For many businesses, even though they know they’re stuck in the weeds, it’s a case of ‘better the devil you know.’ Think about where they want to get to, what’s stopping them from getting there, and how your stuff can uniquely help them. If your buyers are sufficiently different for you not to be able to think about them as one group, then put them in groups that do make sense and think about those groups separately.

Think also about the steps they should take to buy from you, and what you need to share with them to get them to keep moving forwards. They don’t necessarily know the steps, so they will need evidence from you that these steps have worked for similar companies.

You’ll know your approach is working when they stop asking about themselves and start asking ‘how are other companies doing this?’ and ‘how are you doing this?’ And, who knows, if you illuminate the path well enough they might self-select and do the buying themselves.

I met with a company in the software space recently. They are what you would call a high velocity business, focusing on a transactional business model for sales. They used a phrase that resonated with me:

“You don’t step in front of a speeding train.”

If your customer knows what they want, and is ready to buy, let them. Don’t insist on going through your sales process in the hope that you might be able to increase the initial deal size, because you run the risk of slowing down the deal or halting it altogether. Maybe they want do business with you without dealing with a salesperson.

This strategy of using your sticky product as the tip of the spear allows you to go back subsequently and sell more stuff to them. You land with a small sale and then you expand the business.

Of course, this works very well in businesses that have a strong compelling event, a market-leading product that can be bought ‘no touch’, and great marketing. Customers can find what they want and self-purchase. It’s not so easy for companies who are selling services, or products that are less transactional and more complex in their nature.

If you are blessed this way, though, it’s case of both caveat emptor and emat emptor. Let the Buyer Beware, and Let the Buyer Buy.

So far in this series, we’ve covered six of the seven selling stages that are joined at the hip to your customers’ seven buying stages in the B2B buying process. These six are:

–  targeting your addressable market

– defining the sales opportunity

– understanding your prospective customer’s objectives,

– demonstrating why you’re the best option

– zeroing in on the deal, and

delivering the order and the solution

The Seventh Selling Stage. Ah, halcyon days! This is typically – if the implementation’s gone to plan – the honeymoon period that follows the consummation of the deal, but it’s not the time for you to rest on your laurels. Is there ever such a time in sales?

In the Seventh Buying Stage, which can potentially last the duration of your initial contract, your customer is engaged in the ongoing operation of their business, evaluating – among other things of course – the performance of your product or service against plan and moving towards the time when they have to make another business decision: do they renew with you or do they move their funds to an alternative solution or project that bumps yours?

Correspondingly, you should not be idle either. You should be reviewing the performance of your product or service as well, especially if your product or service involves your customer’s staff changing the way they work. People are notoriously and naturally resistant to change, so the key to any B2B project’s success is whether the benefits of the new product or service are sustained over time.

Be sure to schedule regular review milestones with your customer to make sure things are going to plan and to course correct if they’re not. At one of these early milestones, if things are indeed going to plan, you should also be asking your customer for referrals, other people they could recommend that would benefit from your offering. If you could build your business simply from referrals, you would never need to prospect again.

As with the seventh buying stage, the seventh selling stage is very similar to the first selling stage and in fact completes the cycle. You are actively reviewing your addressable market for other sources of new business. As well as new business, you also have your recently satisfied customer to think about. This gets us into a whole new and crucial realm of sales, the realm of account management. Often treated as a different role or skill-set within a business – but not necessarily so – account management is where you build the trust with your customer, strategise together on how best to develop their business, win new pieces of work from them and start to widen your influence within their organisation.

The Sixth Selling Stage – it’s a bit of tongue-twister! On the plus side, you’ve done all the hard work and now you need to see it through. So far in this series on setting out a typical B2B selling process we’ve covered knowing your addressable marketdefining the sales opportunity, understanding your prospective customer’s objectivesdemonstrating that you can best give them what they need, and zeroing in on the deal.

At this corresponding sixth buying stage your customer is on a high state of alert as they cover all the bases before committing their hard won funds to you. At this stage they’re looking to invest and implement, which means you’re looking to deliver, both the order and the solution.

In order to deliver the order to your company, your customer needs to sign on the dotted line and get the paperwork housing their signature back to you. Here are some things to help get the signed contract back.

– Check nothing has changed and they’re still planning to go ahead

– Take responsibility for being the conduit between your legal people and theirs. You’re paid by the selling organisation, but you need a fair deal for both parties for the long term benefits to accrue. Don’t be afraid to fight your customer’s corner as well as your own

– Ask when they expect to send the signed contract back and plan a lead-up process accordingly. If you’re calling them at 4:30pm on the Friday it’s due in, you’ve lost any buffer you could have built in

– Confirm how the implementation is going to work once you get the order and reiterate how much you’re looking forward to working with them

– Stress that you will be monitoring the implementation phase. You’re not going to disappear, merrily cartwheeling to your next deal. Your customer will be expecting continuity and consistency from your company and you’re the one to deliver it

Once the order is in, it’s time to roll out the implementation. Of course, you’ll have kept your operations people in the loop and the resources earmarked to roll straight away. This is where the rubber meets the road, and you should work hard to make sure that the implementation and change management processes are delivered on brief, on time, and on budget.

The fifth selling stage. It’s getting interesting now, you’re a good way through a sales process to win the deal from your B2B buyer. I’ve identified seven stages to the buying process, so naturally there must be seven selling stages.

To recap, you know your addressable market, you’ve defined the sales opportunity, you have worked with the company to understand their objectives, and you’ve hopefully demonstrated that what you’re selling is the best fit for what they’re trying to achieve. Just as this is the buying stage where the buying company is narrowing it down to one supplier and negotiating the terms, so you, in this fifth selling stage, need to ‘zero in’ on the prize.

On the face of it this is an easy stage for both parties. Is this the best fit? Are we agreed on what’s being paid? Are we agreed on what’s being delivered? Of course, the devil is in the detail and this is often why this stage can be rather drawn out as the two parties and their legal teams hammer out the minutiae. Good buyers and good selling companies tend not to leave the negotiations until this stage, and in many ways the two parties have been negotiating with each other all along, so that there aren’t too many surprises as you get down to the short strokes, to use golfing parlance.

You don’t want your customer to wobble at this point. They’ve come this far and you need to help them get over the line and feel good about the decision they’re making. Make sure that you have the following things in hand:

– have you done your ‘always be qualifying’ thing and reconfirmed that nothing germane has changed?

– has the customer appointed a ‘change agent’, someone in their team that’s going to be responsible for seeing the project through and making the appropriate resources available for it to happen on schedule?

– are you agreed on money?

– have you shared your contractual and implementation documents with them so that they can see the fine print?

– have they confirmed it all looks fine? If they haven’t, have you lined up resources and decision-makers on your side to expedite this process?

Finally, when you’re confident you have guided to them to the part when they’re ready to buy, you get to the most beautiful part of all:

– have you asked them for the order?

– have they confirmed they’re going ahead with you?

 

 

In previous posts in this series on the B2B selling process – which, I’m sure you’re sick of reading, matches your customers’ B2B buying process – we covered defining and listing your addressable market and then defining the sales opportunity for you.

This third selling stage corresponds to the ‘brief’ buying stage and concerns the customer’s objectives. What are they looking to do? Your prospective customer is setting out its requirements for removing the barriers to achieving its objectives. The brief can come in many forms, from the ultra-short verbal brief – especially if you’re already a supplier to the customer –  to the more formal requests for information, quote, or proposal, through to the ultra-formal Invitation to Tender.

The really important point to bear in mind is this: if this is the first you’re hearing of a potential opportunity to do business with the customer, you’ve already missed a few stages in the customer’s buying process. They may have already done a fair bit of work researching their problem, and researching you. Worse still, they may have also received help designing and framing their requirements from – yikes! – a competitor. And if the competitor has helped them write the brief, guess what the optimal solution is likely to be geared to? Yep, the competitor’s offering. And what’s the success rate for responding to an unexpected invitation to bid for business? Zero to 5%. Yep, that’s not a typo, it’s 0 to 5%.

Let’s pull ourselves away from this gloomy scenario for a moment though. At this selling stage you have a couple of options. You can either assume the customer has a clear understanding of what they need or you can ask them a bunch of questions to challenge their assumptions, qualify their requirements in more detail and maybe highlight some additional areas that they might not have considered. The golden rule in a sales opportunity is ABQ – Always Be Qualifying, through the life of your active association with the opportunity, until you win it, lose it, or pull out. Use some of the following questions to help dig into the customer’s objectives:

– Who is involved in the decision? What’s the pecking order?

– What is their role in the decision? They will have different roles, from evaluators through to decision-makers and decision-approvers.

– Some of the people will have different things they want to get out of the project. What are they? Whose are more important?

– What is the process from here, all the way through to completion?

– Is the budget rock solid? There’s no chance of another project getting the funding?

– Is the budget enough for what they want to do?

– Why do they have to do this project?

– What happens if they don’t do this project? If nothing happens, you don’t have an opportunity. No-one you want to work with is going to spend money they don’t need to spend

After you’ve satisfied you have a clear understanding of the objectives, and the prospective customer has confirmed them, there are some additional things for you to consider yourself:

– What relationship do you have with the key people involved in this project? Most importantly, what relationship do you have with the person who is most impacted by the success or failure of this project?

– How are you going to win this business from the competitive alternatives, including an internal alternative, or the ‘do nothing’ alternative?

– What’s the fit like between your solution and their objectives. You need to be able to demonstrate you alone are the best fit for them

At the end of this stage you need to be able to articulate how you feel about this deal and why you think you should pursue it or disengage. From here it gets expensive for you to compete and so you need to be sure you understand clearly what is required and what your chances of success are.

Ah, the second selling stage. It has a nice ring to it, doesn’t it? And so it should, because it’s a very important stage. Coming after the first selling stage where you have defined and listed your addressable market, the second selling stage is opportunity definition.

This stage corresponds to the Second Buying Stage of problem / opportunity definition. If your customer has a problem to address, or an opportunity to exploit, then you need to define what the opportunity is for you. This stage is all about qualifying the situation. At this stage there has been some level of engagement between you and the company. Either they’ve reached out to you or you to them.

Don’t get your hopes up yet, however. If you can’t qualify the opportunity to your satisfaction, as far as you should be concerned there is no opportunity. Being ruthless at this stage and discounting the ‘bad’ or non-opportunities is the best thing you can do, because it frees you up to concentrate on – or find – the good opportunities.

So how to qualify? Many people use acronyms like BANT – do they have Budget, do they have Authority to buy, do they have a defined Need, what is the Time limit by when they have to act – to help them define the opportunity. In essence, this sales stage is all about establishing that this is worth your while putting in more effort to pursue the opportunity, over other opportunities. These questions will help you:

– exactly what’s stopping them from doing what they want to do? What’s the problem?

– is there a great fit between what you provide and what they need?

– who are you talking to at the company? are they high enough up the pecking order?

– when do they need to act by?

– what will happen to them if they don’t act?

– what other alternatives are they considering (the biggest two being do nothing and do it ourselves)?

– how can you do a better job for them than the alternatives, and why?

– do you like the odds on getting this deal?

Ideally, you don’t want to deduce the answers to all the above questions, you want the company to confirm the answers for you. All that is, except the third question and the last question. I would keep these answers to yourself and use them to decide the following: am I in, at this stage, or am I out?

Whew! I’ve recently finished a blog series on what I see as the seven typical stages in the B2B buying process. Call them the magnificent seven if you will :-).

It’s important to understand how our customers buy expensive, drawn-out and complex things because if we don’t know how they want to buy from us, we don’t know how to sell to them – effectively. I say effectively because we can all do whatever it takes to sell, but you need to do it profitably, productively and sustainably, or you won’t grow.

In order for you to deliver on this understanding, you need to do one really important thing, which I shall emphasise with the ‘dah dah dah’ dramatic use of the hyphen. You – need – to – match – your – sales – stages – to – your – customers’ – buying – stages. Simple!

Which brings us to the first selling stage. This is aligned – for that is the meaning of ‘match’ – to the first buying stage, namely the ongoing operation and review of the customer’s business that reveals awareness of a problem or opportunity. The first selling stage is your Addressable Market.

As you do your research into potential industries and customers to sell to, consider these questions:

– what businesses are they in that you could help improve?

– do they normally buy your kinds of products and services?

– do they have the kinds of problems that you can prove you solve?

– which role usually does the buying for your product and service?

– are they of a similar size, growth stage, sector and region and that you are comfortable doing business with? Hint: if not, they probably don’t fit nicely into the same buying process…

– are they already working with companies that fulfil a similar business need to you?

– are there enough of them and is their combined spend enough for you to win an achievable market share that allows you to grow?

Once you can get a sense of your total target market, you can then decide which portion of that market would pay for your products and services. This is your addressable market.

Don’t be tempted to put additional companies into your addressable market if they don’t fit. They’re a distraction and too expensive to sell to and service, because of the lack of fit.

Do be tempted to keep adding in new companies that do fit your addressable market.

Following the investment stage in the B2B buying process, dear reader, which follows the awareness of a problem or opportunity, defining that problem or opportunity, briefing the requirements to fix the problem or capitalise on the opportunity, evaluating the alternatives and selecting the best alternative, we come to the seventh and final buying stage.

In fact, as is true in the cycle of business, the seventh buying stage is also the first buying stage. In the ongoing operation of the business, the buying company is reviewing its operations, assessing the results of the investment against the target results it has set for the investment, and making changes where necessary to improve performance.

It’s also the stage where the company makes a call on whether it will supplement, renew or reorder – in the sense of order again rather than re-organise – the product or service that formed the original investment. This will depend on the resulting behaviours and achievements of the company against the plan for the investment. It will also depend on what other problems or opportunities arise that compete for attention and investment in the general running of the business.

In future posts I’ll examine the sales stages that align with these buying stages for successful selling.