by: IDC's Kathleen Schaub, VP CMO Advisory Service
B2B Buyer behavior is undergoing an extraordinary sea change triggered by Internet technology. Tech marketing and sales teams haven't caught up. They still rely on a 112-year-old sales funnel model. To remain a winner, you need to adapt your customer creation process to the way customers really buy.
The Internet tsunami had radically changed B2B Buyer behavior.
Before the Internet, the B2B buyer making a complex decision had few sources of information. Vendors leveraged that knowledge gap. The sales person was the primary gateway to information the buyer needed to decide – a tremendously powerful position. Fast forward to today. The Internet and social media have triggered a turbulent change – the rich dialog has shifted on-line - and away from the sales person.
As a result, the B2B Buyer in a complex sale is now an expert with very different behavior and expectations than in the past.
- Buyers are constantly on-line. IDC research shows that IT buyers find online search and the vendor websites more valuable sources of buying information than face-to-face conversations.
- Many times, buyers know more than sales people. 55% of buyers think sales people are only somewhat prepared or not prepared for initial meetings.
- B2B buyers, who are life-long consumers, bring buying expertise to work and expect concierge service.
The Empowered Buyer is Killing the Traditional Sales Funnel
The traditional sales funnel is 112 years-old and bears the unmistakable marks of the industrial-era. Buyers are treated like widgets that sellers manufacture into a product called a customer.
But today's empowered Buyer is far from a widget. The industrial-era funnel is out-of-touch with reality – and the results show up in poor funnel health. Conversion rates are unsustainable. It takes over 1000 targets to get one sale. Time to convert is lengthening. The average time to create a large B2B tech customer has lengthened by 15% in the last year.
Symptoms of a sick funnel show up inside tech vendor companies, too. Sales and marketing teams bicker over leads. Companies lack data to judge performance and predict the pipeline. Sales people don’t have the tools needed to sell, in spite of the fact that they have access to a tonnage of content. Prospects fall out of the pipeline and no one knows why.
A New Customer Creation Framework
To ensure that prospective buyers want to become customers, tech companies need a new framework that better aligns with the way buyers buy today. This framework should maintain what is valuable about the industrial-era funnel. For example, the graduated stages of the traditional funnel are a practical tool for measuring progress. To meet the needs of the 21st century tech buyer, this new framework, which IDC calls the Customer Creation Framework (Figure 2), must advance from tradition in three important ways:
- Buyer-centric: Act like a Concierge Replace the manufacturing mind-set with a service orientation. Act like a concierge who delights guests with information and support services that guide them through their "Buyer's Journey".
- Integrate Marketing and Sales Instead of the hand-off between marketing and sales silos, the IDC Customer Creation Framework calls for an orchestrated collaboration between the two functions. Since the new Buyer never, ever, goes off-line, marketing, as the owner of the company’s digital dialog, can never disengage, can never hand-off. The sales team cannot simply wait for the “good leads”. Sales people must be adaptable, prepared to serve the Buyer at whatever stage he happens to be at. Marketing must be more active enabling the sales conversation.
- Smart: Data-driven The entire customer creation process contains data that can be harvested to use as a feedback system. By analyzing this data, barriers and opportunities will be revealed. Companies can then use marketing and sales tactics like knobs and levers to tweak the behavior and outcomes of the pipeline.
7 comments:
I'm intrigued by the reference to a 112 year old funnel model. Do you mean AIDA or do you have some other model in mind?
Yes, essentially it is the AIDA funnel - although the stages evolved somewhat over the years. According to Wikipedia, Edward K. Strong first wrote about the funnel in The Psychology of Selling in 1925 and attributed it's initial invention to E. St. Elmo Lewis in 1899. The original meaning of AIDA was: attract attention, maintain interest, create desire. The last A (get action) was added later. Lewis promoted these as the goals of advertising. The concept that a buyer progresses through various stages towards a willingness to buy is still very useful and accurate. What needs to change is the way vendors typically interpret both their role as well as that of the buyer, in this process. Thanks, Kathleen Schaub, VP CMO Advisory Service, IDC, kschaub@idc.com
Excellent article Kathleen. But there is an extra layer of complexity.
Big buying decisions are made in groups (I wrote teams but they aren't as organised as that).
Now if you put an item on an agenda people will have googled it before the meeting - they can have a vendor shortlist, key benefits, pitfalls and even pricing to hand.
So while your salesteam is selling to one person (CRM is still a one-to-one device and most companies think of a prospect, not a group) another is selling to the rest of the team over the net. Often all you end up doing is putting the project in play for someone else.
And the approach is wrong... Far too often I hear "But they don't know what it is - we have to explain to them". They don't want their thinking challenged or to be pressured - they want to find out for themselves.
Excellent article Kathleen. But there is an extra layer of complexity.
Big buying decisions are made in groups (I wrote teams but they aren't as organised as that).
Now if you put an item on an agenda people will have googled it before the meeting - they can have a vendor shortlist, key benefits, pitfalls and even pricing to hand.
So while your salesteam is selling to one person (CRM is still a one-to-one device and most companies think of a prospect, not a group) another is selling to the rest of the team over the net. Often all you end up doing is putting the project in play for someone else.
And the approach is wrong... Far too often I hear "But they don't know what it is - we have to explain to them". They don't want their thinking challenged or to be pressured - they want to find out for themselves.
Thanks for the mention of Edward K Strong. Found that book on Google Books. Wow! People have not changed nor has the process of selling to them. I love reading the classics to remind me of this point. People are still out for their own pleasure and serving that pleasure is a path to success. Will it make them richer?, Thinner?, More attractive? We still out for #1 and as salespeople we must demonstrate how our product or service will make them look good, feel good, smell good and be good.
Bottom line - social sales has removed the linearity of the traditional process - much as social is removing all historical hierarchies, logic and structure in everything it touches ...
the B2B organisations that are treating social as experiments or hesitating because they do not know how to handle it will lose out - those that embrace and integrate the process will emerge victors.
You are right!
The buying process and how buyers buy today is radically different than even 2 years ago let alone 10 years ago.
The biggest change for sales is the buyers are as much as 70% through the buying process BEFORE they call you. Sales is no longer the keeper of the keys .
Your job now is to help those buyers who raised their hands buy.
In my blog http://www.nosmokeandmirrors.com/2013/01/19/are-your-products-invisible-to-buyers-in-your-market-take-a-quick-10-question-quiz/ I offer a few questions to quickly see if your web site is helping to drive sales based on how buyers are buying....or just a virtual brochure taking up cyber space.
Mark
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