Look beyond product for drivers of B2B satisfaction and value


"Research is a process where you can spend a lot of money and come up with zero. Isurus guides me quickly through the key decisions, helps me avoid the pitfalls, and makes sure I walk away with high-value implications."

-Vice President of Marketing, Enterprise Content Management System Provider

Joe Radwich

Joe Radwich
Vice President

Look beyond product for drivers of B2B satisfaction and value
03.11.2019

Customer experience, by definition, incorporates all aspects of a company’s offering and cuts across organizational boundaries. Yet, B2B vendors continue to focus on the product as the main driver of customer satisfaction and value. Research by Isurus and other leading consultants shows how a more inclusive analysis of customer experience reveals more accurate and actionable results.

Follow the breadcrumbs

Take this example from a recent Isurus study. The product team at a manufacturer of industrial generators was shocked when it received lower than expected product quality scores on its voice-of-the-customer survey. The ratings didn’t fit with their understanding of their competitive differentiation. The company is generally considered a leader in its category, and objectively, its equipment is in the top tier of vendors. A commitment to delivering quality products impelled the team to act on the findings. But how?

Fortunately, in addition to exploring product attributes, the customer survey evaluated a broader set of company characteristics such as customer service, warranty, channel delivery, and installation. This data allowed Isurus to evaluate the full range of factors that influenced perceptions of product quality. The analysis revealed a key insight: when service techs returned after the initial installation to make adjustments to the equipment, the product quality score was lower. The customers assumed something was wrong with the product.

After a little more digging, the company found that two groups of contractors made more post-installation visits than average – newer contractor partners, and contractors with less commitment to the channel-partner relationship. With this knowledge, the company could tackle the right problem. The product didn’t need fixing; the company needed to reduce errors in the installation process. The company focused on improvements to training and customer support and increased engagement with its channel partner program and its contractor resources.

Beyond functional value

Bain & Company’s recent study of the Elements of B2B Value provides further evidence that non-product attributes drive satisfaction.

Source: Bain Insights – Elements of B2B Value

In this research, commercial insurance buyers rated 36 different elements of value ranging from threshold conditions such as cost, to aspirational elements such as helping the customer achieve its corporate vision. Cost and Availability received the highest ratings overall. Taken at face value this result suggests that insurance companies and brokers could differentiate by providing a wide set of low-cost policies. However, a regression analysis showed that Responsiveness and Knowing the Customer’s Business are the strongest drivers of loyalty – two elements steps away from the core product attributes. While Cost and Availability are the most important factors in their buying decisions, they are expected by the market and do not differentiate vendors – customers do not use vendors that they cannot afford or do not have the products they need. Isurus sees this dynamic so frequently in our research that we counsel clients to minimize the threshold factors they include in their customer surveys.

A framework to treat product myopia

It was only possible to uncover the insights outlined in the above examples because the customer surveys included a wide range of attributes related to the customer experience. Vendors and product teams live and breathe their solutions. They invest millions of dollars in the development, enhancement, and expansion of their offerings. When you’re this close to your solution, it’s easy to lose sight that factors outside of the product can be significant drivers of business value and satisfaction.

To mitigate this myopia, Isurus uses a framework of three categories of attributes: Capabilities, Company Traits, and Tactical Outcomes. We recommend that VOC programs incorporate attributes from across three categories.

  1. Capabilities: The features and qualifications most directly tied to the product such as features and functionality, quality, delivery, ease of use, cost, etc.
  2. Company Traits: The behaviors, values, and traits that relate to the higher-level value a company provides, which remain true even if the specific product/service offering changes. The type of attributes in this category includes responsiveness, partnership orientation, innovation, integrity, etc.
  3. Tactical Outcomes: The outcomes the customer expects the solution to accomplish – the job to be done. Examples include reducing the steps in a process, providing sales reps with real time information, reducing waste, etc.

The degree to which each of these categories are explored varies by market. For example, it’s more important for a commodity provider to understand the company traits that provide value – they cannot differentiate themselves on product. Conversely for vendors in an emerging technology market, it is important for them to understand the outcomes the customer is trying to achieve – additional features and functionality don’t make a difference if they don’t align with the customer’s business processes and goals.

The benefit of using a framework to guide the VOC program design is to ensure non-product attributes are measured and evaluated as potential drivers of customer satisfaction and value. A framework provides a reference and brings structure to the metrics selection process. Data that represents the full customer experience is much more likely to identify the true drivers of satisfaction and provide insights that lead to competitive advantage.

Jeana McNeil

Jeana McNeil
Vice President

Make better strategic investment decisions: Reduce decision bias in M&A due diligence
02.15.2019

PE firms and corporate investors compete intensely for investments to expand their portfolio or augment their existing solutions.  In the due diligence process, decision makers face the dual pressures of accuracy in a high-stakes decision, and the need to work very quickly. Unfortunately, the time-pressure of makes these decisions vulnerable to the cognitive biases.

due diligence decision bias

The steady drumbeat of behavioral economics research in recent years highlights the prevalence of biased decisions, even among the professions we liken to Dr. Spock –the statisticians, economists, physicians, and computer programmers of the world.  M&A decision makers — Corporate Development and Private Equity investors – are also at risk. The pressure and tight timelines for M&A due diligence exacerbate the potential for biased decisions.

Investment teams use experience and sector knowledge to evaluate acquisition targets and expedite the decision process.  Experience and sector knowledge are generally assets; however, they also become liabilities.  Research shows that a high degree of experience may lead to:

  • Overconfidence bias: Experience causes the investment team to rely too much on what they think they already know, rather than carefully examining new data or the unique aspects of a particular deal.
  • Confirmation bias: Rich knowledge of a sector leads decision-makers to pay more attention to data that confirms their pre-existing view of the world, and overlook data that doesn’t support it.
  • Affect bias: Investors apply their experience to make an initial assessment of a prospective investment. If that initial assessment is positive – “I like this company”—new data is evaluated through that lens. When evaluating something we like, we minimize its risks/costs and exaggerate its benefits. When we dislike something, we do the opposite.

What can be done to mitigate against these and other decision biases in due diligence?

One answer is look to external partners: In addition to the requisite legal, technical, or analytical expertise, external partners provide an independent perspective. External partners are less vested in the decision and bring a different set of experiences than the core investment team.  While external partners aren’t immune to bias, their bias will likely be different and leads to a more robust analysis.

How do external providers improve decision quality?  Through Isurus’ work to support B2B software M&A due diligence, we’ve seen benefits from the following approaches in the context of primary market research:

1) Work from a pre-defined framework or analytical plan

The framework provides a checklist. It reduces the likelihood that important data are omitted from the analysis, and guards against too much weight placed on a particular element.  Without a pre-defined framework, stakeholders may struggle to agree on which data are needed, or brainstorm an excessive set of questions that stray from the main objective.  The framework can be modified for a particular market or scenario, when there is a strong rationale for doing so.

2) Listen to external partners’ point of view

Investment teams are skilled analysts. They dig into data, eager to form conclusions. In the case of primary market research results, the investment team should elicit more from their partner than just the data: Request their interpretation, conclusions and recommendations. External market research partners are less likely than the internal team to overlook data that contradicts a pre-existing opinion, or to weigh one piece of information too heavily in the analysis.

3) Encourage discussion of different interpretations of the data

When Isurus presents research findings, it is not uncommon that members within the investment team draw different conclusions from the same data point. Juxtaposing different interpretations often reveals useful nuances about market dynamics, growth potential, or considerations for the post-acquisition transition period. Research read-out sessions are particularly useful when the meeting is structured to encourage Q&A and discussion amongst the team.

 

For further reading on this topic, read “How Cognitive Bias Undermines Value Creation in Life Sciences M&A

Nobel laureate Daniel Kahneman writes in Thinking, Fast and Slow that “Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.”  When confidence in a decision is abundant, it pays to confirm that data are at the root rather than emotion or bias.

 

 

 

 

 

 

Joe Radwich

Joe Radwich
Vice President

Are customer compromises putting your product at risk?
01.03.2019

No solution is perfect. Even highly satisfied customers make compromises to use your product or service. Budget is the most obvious trade-off: your product competes against other priorities and needs for budget. Less obvious compromises include the work-arounds customers implement in order to use your product or achieve their desired outcome. For example, a customer uses an add-on reporting solution to compensate for inadequate analytics in its HR software. Or, they use a secondary distributor to acquire the product. Many customers accept—and may not even notice—these compromises until it’s brought to their attention by a competitor, new leadership, or another change in the business. At that point, the previously acceptable compromise can contribute to the loss of a seemingly “satisfied” customer.

Customer compromises can be challenging to spot. Customers themselves become blind to them. After years of using the same product or approach it feels easy, or the customer simply starts to accept the limitations of the product or service. A good example is an enterprise software solution with a cumbersome user interface. Power users know the system so well, they don’t notice that it takes four steps to do something that should take two steps. Only when an alternative comes to their attention, or a change in management spawns a review of existing processes and tools, do they start to think there might be a better way.

To be clear, work-arounds and compromises are rarely the primary drivers of switching and purchase behavior. If your product and service provide enough value, customers make the trade-offs necessary to use your solution. However, when customers see less differentiation between vendors, factors outside of core functionality influence their decisions. If they believe the same outcome can be achieved with less effort, competing solutions become appealing.

So how do you determine what types of compromises your customers make to use your product? The specifics will vary based on sector and product/service category, but examples of the types of questions worth asking include:

  • Do customers have to take extra steps to use your product or service? Do they have to order more than they need? Do they have to manually integrate or migrate data?
  • Do customers have to accept a poor user interface, customer portal, ordering process, billing process, etc.?
  • Are customers giving up secondary features or services they could get from a competitor?
  • If you serve multiple functional areas, would individual functional needs be better met by an alternative solution?
  • Do customers have to use another vendor to meet their needs across regions? Product specifications? Product mix?
  • Do competitors provide access to resources, categories of expertise, an ecosystem, etc. that would be useful to customers?

You may not have a significant problem in any of these areas today; however, an analysis of the trade-offs your customers make will help you identify blind spots and potential weaknesses that a competitor may be able to exploit. It’s better that you see the weaknesses before they do. The analysis can  also provide a holistic view of customer needs: customer satisfaction and VOC initiatives typically focus more narrowly on the specifics of the product or service.

Some of these questions are best explored with your customer advisory panel. Customers may not realize the extra steps or trade-offs they take, but you can recognize them as they describe or demonstrate their processes. Other questions may require a review of competitor products and services. Some questions may require more formal, structured market research with customers or prospects.

If you do find that customers make meaningful trade-offs, you can look for ways to address them directly or indirectly, e.g., if you don’t provide a service or product, you can explore partnerships or ways to provide the same benefit. This analysis can also be used to evaluate competitors and identify potential weaknesses to exploit. Can you address the work-arounds that your competitors’ customers make today?

The exploration and analysis of customer compromises can range from internal discussions, to exploring these topics in your VOC or NPS programs, to asking customers directly about them in a stand-alone research engagement. Regardless of the formality of the exercise, it will help to look at your customers’ needs, and how well you meet them, in a new light.

Joe Radwich

Joe Radwich
Vice President

Sporadic Customer Journeys in Low Involvement Categories
03.29.2018

Set it and forget it is the attitude in many low involvement categories – data security, business insurance, telecommunications, etc. Inertia keeps businesses from proactively evaluating alternative solutions or vendors. If the product or service is good-enough businesses don’t have the motivation to evaluate their options.

The purchase journey for these products and services consists of long stretches of inertia, interspersed with periodic spikes in interest in alternatives. During the inertia phase businesses pay little attention to the category: They don’t think about how things could be better or keep tabs on vendors or trends in the category. They remain happy with the status quo.

Product/service failures and significant price increases jolt business out of their comfort zone. They reach out to peers and advisors, conduct online searches, read online reviews, reach out to vendors, take sales calls, etc. Once they make their decision to switch vendors, or maintain the status quo, their inertia returns. They stop paying attention to the category and their awareness of vendors and options rapidly dissipates.

This buying journey cycle is a significant challenge for vendors that operate in these categories. If your product or service is a low-involvement one, convincing prospects that it’s worth their time to look around outside of their sporadic spikes in interest may require more sales and marketing resources than you have available.

It might make more sense to take steps to ensure you can take advantage of the opportunities when they do arise.

Be where they look

Although their need may be urgent, most prospects look into only a handful of vendors: Those they’ve used before, are familiar with, find in a simple online search, know their peers use or are recommended by their trusted advisors. To improve your likelihood of being in this initial consideration set:

  • Keep track of, and contact with, individual customers and prospects when they move to new employers
  • Attend industry events as a sponsor or attendee
  • Identify the trusted advisor channels you can feasibly influence
  • Invest in optimizing search results
  • Advertise to maintain brand awareness (this varies in importance by market)

Understand the Failures

The purchase trigger in low-involvement categories tends to be a failure, or cost increase, rather than a proactive desire to improve the status quo. Prospects will be interested in the potential benefits of a new solution, but their first priority is to ensure they don’t get burned again.

When you understand the what, where, why, who and how of the typical failures that motivate prospects to switch vendors, your sales and marketing processes and communications can speak directly to these concerns. Convincing a prospect that the failures they experienced will not happen with you will be as compelling as the additional benefits your company provides. If a prospect feels at risk of the same type of failure with a new vendor, they have little motivation to switch.

Recognize the Price Shoppers

Some switching in low-involvement categories is merely price shopping. If you are the low-cost vendor in your category this works to your advantage. If you aren’t, don’t count on these customers for the long-term if you happen to win them. While some may come to understand the value your product/services provide, many will eventually leave for a better price.

Learn from new customers and recent losses

Your new customers are a great place to start to understand the types of failures that prompted them to switch, and how your company made it into their consideration set. Losses can provide similar insights – they may not have selected you, but something motivated them to evaluate options.

We recommend conducting interviews with the customers and losses themselves, rather than relying solely on the opinion of the sales team. Sales reps tend to focus on the benefits of your product/service that resonated with the prospect, not the failures that got them motivated them to evaluate their options in the first place.

Joe Radwich

Joe Radwich
Vice President

B2B Customers Are Not Logos
02.28.2018

People don’t want to be a number. B2B customers don’t want to be a logo.

An increasing number of companies refer to existing and potential customers as logos, e.g. Our goal is to add 20 more logos this year. It’s gone so far that a search on LinkedIn will produce individuals with titles like VP of New Logo Acquisition. We think referring to customers this way is a mistake. Beyond being jargon, it sends the wrong message to employees. Customers and prospects are better terms. A customer is a person or organization your company has a relationship with. A logo is a stamp.

This may seem like an exercise in semantics. But Language matters. How you describe customers and prospects in internal documents and conversations sends a message to employees. It subtly turns customers into a score, rather than a relationship.

Many organizations are sensitive to this issue when referring to employees. Employees are partners, associates, leaders, representatives, etc. These labels elevate the relationship the employee has with the organization. Even firms that don’t use aspirational terms for employees don’t call them cogs, underlings or wage-workers.

The use of the term “logos” to refer to customers appears to have originated in the financial services sector where banks and private equity firms display the companies the invest in using PowerPoint presentations. In this situation a logo represents an abstract connection. An investment.

But customers don’t want to be logos. They are organizations full of people with goals and challenges. Customers want to believe that their vendors have their best interests in mind and want to help them succeed. Your employees will be more motivated to help a customer or a person that your organization views as a relationship, then they will to help a logo that is keeping score in a PowerPoint deck. At least we think so.

Joe Radwich

Joe Radwich
Vice President

Are you hard to work with? It matters.
08.08.2017

Do your internal processes pull customers and prospects closer to you or do they push them away?

Research shows that companies and individuals that find a vendor easy to work with demonstrate higher levels of loyalty and likelihood to recommend. They use the vendor more fully, e.g. buy more products, use more features. They will even use technically inferior products and services when a vendor makes their lives easier.

This point sounds obvious. But as vendors develop internal processes to improve efficiency and management effectiveness they can accidentally lose sight of how these processes impact customer experience, loyalty and even their brand image. For example: A sales process designed to provide consistency across a diverse sales team may force prospects through a protocol that makes them feel that the sales rep isn’t listening to their needs; or an invoicing protocol that is ideal for a vendor’s internal accounting needs may be confusing or maddening to customers.

So how do you identify the unintended consequences of your processes on the customer experience? You have several options.  Start with a common-sense review of your processes. A more systematic approach is to create a customer journey map for each process. And, if you want to be cutting edge, apply neuroscience to see what’s going on in your customer’s brain.

1 Common-sense, Self-examination

An easy first step is to engage in a bit of common-sense, self-examination of any given process (sales protocol, ordering, internal hand-offs, etc.). First outline the process’ broad steps and parameters; and then ask yourself two questions:

  • Who receives the primary benefit from how the process is structured and executed?
  • If you personally had to go through the same process with one of your vendors how would you feel?

If the benefits of the process primarily accrue to your organization or if you would personally find annoying or troublesome, chances are it has a negative impact on prospect/customer experience and perceptions.

This basic evaluation can highlight easy fixes. It can also help your department/organization start to think in terms of customer experience, rather than internal operations. A critical aspect of this is to consider is the emotional component a customer’s experience.  Negative emotions like frustration, mistrust, or anger stick with a customer much longer than the specific details of the experience.  These emotions become embedded in the brand’s perception, and are difficult to dislodge.

A simple way to formalize the investigation is to add a question to your customer experience surveys: How easy was it for you to… (place an order, get an answer to your question, etc.)? Alternatively, combing through the open-ended responses in your NPS survey may identify trouble spots.

2 Customer Journey Mapping

Customer journey mapping systematically captures the broad steps customers go through in their overall relationship with your firm. The technique can also drill down on the steps associated with a specific process (e.g. sales interactions, customer support). Simply defining each of the steps a customer/prospect must go through can identify trouble spots that hide in plain sight. Perhaps there is a lack of official transition from being a new customer to an established customer. Perhaps in-person training is only available in major metro areas. Etc.

Defining the steps in a process may identify intuitive problems such as those above. However, it will not necessarily identify all of the areas customers find confusing or hard to deal with – something that seems obvious and simple to you may feel complicated and opaque to customers. Primary research with customers and prospects can bring the market’s perspective into your customer journey maps and ensure they reflect how the market feels, not what you think.

3 Neuroscience

Advances in neuroscience now enable you to literally see what is going on in your customer’s brain. Tasks and activities that are hard to navigate put a greater cognitive load on the customer’s brain. Neuroscience applications measure cognitive load in real-time to identify the specific points in a process where individuals struggle most. As promising as this technology is, the field is new; the viable applications of the approach are limited; and, the tools available are mixed. Buyer Brain’s Effort Assessment Score© is a good one to investigate to get a better understanding of how neuroscience is being used today.

Conclusion

Regardless of how sophisticated your approach, it’s worth putting some efforts toward evaluating how easy it is for your customers to do business with you. All of their experiences with you—not just your product/service—influence their perceptions of your brand, their loyalty and likelihood to recommend you to others.

Joe Radwich

Joe Radwich
Vice President

Uncertainty: The hidden barrier in B2B markets
07.17.2017

Many B2B purchases are delayed or abandoned due to the uncertain outcome of the decision. Prospects compare the certainty of the status quo (good or bad) to the potential (but uncertain) benefits of a new solution and opt for the “devil they know”.  The implication: B2B Marketing and Sales can help prospects reach a purchase decision by reducing uncertainty for the new solution, and increasing uncertainty of the status quo.

Favoring certainty

A recent study by Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business shows that individuals favor certainty of outcome over potential benefits – they choose a certain loss of $100 over a chance to flip a coin with the chance to pay $0 or $200. Complexity exacerbates the problem. With more moving parts in the equation, people find it increasingly difficult to envision how the future will play out.

It turns out it’s not Go with the devil you know. It’s Go with the devil you know over anything else – unless you are absolutely sure about the other option.

Companies and B2B markets tend to follow the same pattern: The more conservative the company or market, the more dramatic the effect. The preference for the known plays itself out daily across markets and organizations.

  • As prospects go through their evaluation process they ask for more information, details, case studies, etc. in an effort to bring certainty in their decision. In a recent post Make it easy for prospects to buy we explored how providing all the information prospects request doesn’t help get prospects over the hump and to the buy decision – it bogs them down further.
  • Flip through a B2B trade publication and you’ll see that many of the ads look the same and don’t change much over time. Behind the scenes, B2B marketers ask their creative agencies to help their brand stand out in the marketplace. However, most B2B brands stick with the original creative strategy because its performance is more certain.
  • Research reports that present the data as %’s often get more attention than qualitative insights because a number feels more certain than a description – whether it is or not.
  • It took almost a decade for most markets to become comfortable with cloud software solutions. They knew the cloud offered significant benefits over their on-premise solutions, but most companies didn’t want to move until they saw that the cloud was here to stay and that everyone else was doing it too.

Pain points trump benefits

Perhaps the most basic, yet important, manifestation of this trend is that solving pain-points represents a more effective sales and marketing strategy than selling benefits. Here’s why…

  • Pains are certain. Concrete. They are something specific the prospect knows it needs to address. Once a pain gets significant enough the desire to find a solution outweighs the uncertainties that come with new approaches and vendors.
  • Benefits are hypothetical. If a prospect does x, y, and z, they should receive the benefits. Benefits raise questions: What if a key assumption turns out to be false. Benefits come with more professional risks. Unrealized benefits lack the certainty of the status quo.

The insights from Pfeffer’s research and the day-to-day experience of B2B sales and marketers leads to one conclusion: B2B sales reps and marketers need to change the uncertainty equation.

  1. Increase the certainty of new solutions
  2. Decrease the certainty of the status quo

Increase the certainty of new solutions

Recognize and acknowledge the uncertainty

Left to their own devices individuals and businesses can easily overestimate the things that can go wrong with a new approach or soluiton. By acknowledging the risks that exist, vendors can set the parameters of what the risks and uncertainties actually are. This can include letting prospects know where other individuals/companies run into trouble, what needs to be in place for the solution to be a success, etc. Acknowledging uncertainty not only frames the issue, it increases the knowns associated with the new solution.

Create specific certainties

Reducing the number of unknowns (even minor ones) makes options look more appealing. This phenomenon is known as zero risk bias which is the tendency to prefer options that completely eliminates some risk factors in a decision but leaves other untouched, over options that may produce a greater overall reduction in risk, but do not eliminate any individual risk factor. The preference for options that completely eliminate some risks likely stems from the reduction in complexity – it reduces the factors that have to be considered in the decision.

Examples of certainties that B2B vendors can create include:

  • Concrete implementation processes and milestones
  • Metrics of how other customers use the solution, e.g. 75% of customers select this approach
  • Definitive outcomes, e.g. the ads will stand out from competitors (which is different than saying they will be effective)
  • Customer satisfaction scores
  • Guarantees / Shared risk models

Raise the uncertainty of the status quo

While the status quo feels stable to individuals and organizations, it’s not. Sales and B2B marketers can point out this false sense of security by asking questions or providing data that highlight the actual uncertainty associated with prospects sticking with the status quo: Your market appears to be changing in this way, how will that effect you? These new entrants have entered the marketplace, what does it mean for your market? etc. etc.

There is no single approach or silver bullet for changing the certainty equation. Prospect perceptions of, and preference for security are rooted deep. We suggest a few starting points:

  • Examine the customer journey to ensure you understand their status quo and pain points.
  • Identify the benefits of your solution that are most believable to the market, and therefore have greater certainty.
  • Analyze the Marketing and Sales Process. To what extent does your approach (advertising, collateral, sales process, etc.) reduce or increase certainty for the buyer?

These steps will help sales reps and B2B marketers look more certain in an uncertain world.

Joe Radwich

Joe Radwich
Vice President

Make it Easy for B2B Prospects to Buy (address the last mile problem)
05.05.2017

Do some prospects slip away at the last stages of their buying journey, even though it seems your sales and marketing teams have done everything right? You may inadvertently be making it difficult for some prospects to make a decision. The following illustrates how this situation arises, and how to avoid it (names have been masked to protect the guilty).

Yellow Manufacturing seemed ready to buy Acme Tech’s CRM solution. It had conducted research about the solutions available prior to reaching out to vendors set a preliminary budget, etc. prior to reaching out to vendors. Acme provided extensive information about its CRM suite, outlined the different options available, demonstrated everything the solution could do and answered every question Yellow raised. But after months of back-and-forth Yellow put the initiative on hold.

What happened? Acme made it difficult for Yellow to make a final decision by providing too much information. In short, Yellow wasn’t ready to process the amount of information Acme provided and ended up with analysis-paralysis.

The tendency to overestimate readiness to buy stems from a misinterpretation of the new buyer journey. Many articles from the past few years talk about how prospects are 70% (or some comparably high %) or more through their buying journey before they reach out to vendors. These data suggest that when the prospect calls a vendor, they have objectively worked through their needs, know what they want and are at the stage of collecting the specific information necessary for vendor selection.

In reality, for many prospects the first 70% of the purchase journey focuses on the rudimentary elements of the buying decision. Yellow identified the problem that needed to be solved, the type of solution that might be able to help them, and some vendors that provide that type of solution. Their knowledge was still broad and thin when they reached out to Acme and competitors. Yellow may have been through 70% of their journey, but as with many situations in business and in life, it’s the last mile where the real learning, thinking and challenges take place.

When Yellow reached out to Acme CRM, it still needed to determine whether to invest in a solution at all. By providing stacks of information about its products, Acme increased the dimensions Yellow needed to consider, raised questions Yellow hadn’t thought of before, and made the solution and decision feel too big. Collectively this slowed down the decision process and eventually knocked Yellow out of the sales funnel.

This confusion about Yellow’s readiness to purchase isn’t entirely Acme’s fault. Prospects like Yellow can contribute to the impression that they are an informed buyer. Consciously or note, Yellow worried about being taken advantage of by Acme’s sales team and process, and presented themselves as knowing more than they did. Yellow knew the buzzwords, and had specific questions—they talked a good game. In addition, when faced with complex questions, people often substitute a smaller, easier to understand questions in place of the hard ones. Many B2B technology solutions raise big picture considerations about business processes, integration, how ROI will be measured, etc. The list of specific questions Yellow asked Acme CRM reflected a need to get their head around the solution, rather than an indication that they just needed a few more details to finalize their selection of vendor.

Improving the last mile.

Vendors can implement two related strategies to improve their effectiveness and win-rates during the last phases of the prospect buying process.

  1. Map the last 30% of the buying journey in more detail
  2. Use a prescriptive sales approach

Mapping the last 30% of the buying journey

When B2B marketers map the buying journey, many tend to focus on the steps in building awareness and consideration, which happens to be where marketing has the most responsibility. However, by paying as much attention to mapping what happens after a prospect engages with the sales team can enable their company to close more deals. Some of the key aspects to explore include:

  • How knowledgeable and informed is the typical prospect when they begin to interact with the sales team. This helps marketers and the sales team set a baseline for creating materials and processes that speak to prospects in a way, and at a level, they can understand.
  • Identify the 2-3 core drivers of the buyers purchase motivation—even when buying the most complex product, most prospects are focused on improving a handful of key activities. This will provide a framework for marketers and sales team to speak to the benefits that prospects care most about – instead of a range of things that are interesting but unlikely to influence their purchase decision.
  • Determine the internal barriers your internal champion is likely to encounter and provide data and recommendations for how they can overcome them. Once your champion is sold, the deal can still be derailed if they cannot sell it internally.

Use a prescriptive selling approach

When prospects reach out to vendors most are still trying to understand what solutions would be the best fit for them and whether to should invest at all. Many ask for different options because they don’t really know what they need and hope that one of the options presented will stand out as the right choice for them. Instead too many options can confuse the issue. Research conducted by CEB shows that vendors that take a prescriptive approach—provide a recommendation with a clear rationale instead a series of options—close significantly more deals.

That said, it is important for your recommendation to be in line with the core drivers of the prospects purchase motivation. Prospects tend to reject solutions they view as too broad in scope relative to what started them down their purchase journey. Put another way, presenting your entire suite of products can knock you out of the running if the prospect is focused on a single module.

Making it easy for prospects to buy

The vendor that makes it easy for Yellow to make a decision by presenting information they can understand, addressing Yellow’s core needs, and presenting a recommendation instead of options, is most likely to win Yellow’s business.

Jeana McNeil

Jeana McNeil
Vice President

Know thy enemy: How to overcome barriers in B2B technology sales
03.29.2017

The Art of War advises that we can outsmart opponents and avoid battle when we “know thy enemy”.  While marketers typically define direct competitors as the enemy, internal barriers within prospect organizations pose equal peril.

Isurus has seen many innovative ideas in 20 years of B2B market research for technology companies.  Some ideas meet great success out of the gate, others languish for years before taking off, and some recede and disappear altogether.  Through this experience, we’ve identified four major reasons that prevent prospects from adopting new technologies.

Satisficing:  Inertia poses a strong barrier for products that improve on an existing process or system.  Decision makers start with a mindset of “if it’s not broken, don’t fix it”.  This is especially true with complex systems, where change leads to significant disruption.  Unless the status quo is broken and painful, the new product needs to show large improvements in cost savings, productivity, competitive advantage, and the like, to overcome the inertia.  Satisficing also occurs when decision-makers or end users lack a point of comparison for their existing system: The current system seems okay until they step back and compare it to what’s possible.

Competing priorities:  Purchase decisions are made in the broader context of organizational priorities.  A new product competes with all the other technology projects, even if they address a completely different need.  For example, a new supply chain management application competes with a virtual network automation project.  A new investment must prove why it is better than the status quo, and why it deserves resources that could be allocated to something else.

Pain of transition:  Gone (mostly) are the old days of giant ERP implementations that were years and millions over-budget, and earned the permanent scorn of end-users.  Still, some level of process change and learning is inherent in a new system implementation.  The benefits of the new system may depend entirely on successful adoption by end users. For example, if Sales doesn’t enter information into the new SFA system, it can’t deliver the intended benefits.  The decision to buy a new system will take all this into account: What is the level of change required for the customer to realize the benefits of the new solution?  How realistic is it that the customer organization can achieve that change, and what will be required to do so?  When is the right time to embark on that journey?  The benefits of the new solution have to outweigh the pain of transition, or minimize the pain altogether.

Ecosystem dependencies Some new products depend on other processes, technologies and systems to succeed.  These dependencies occur at a macro level and within individual organizations.  Subscription pricing for software is a good example of macro level dependencies.  Fifteen years ago, software providers experimented with the ASP model that enabled customers to license major business applications on a yearly basis instead of making a large up-front investment.  The subscription model failed to gain traction until virtualization and cloud technologies evolved to make software-as-a-service reliable and cost-effective.  At a micro level, an individual prospect needs to have the ecosystem in place to support a new product.  For example, a mobile device management solution will resonate much more with companies that allow Bring Your Own Device (BYOD).

It’s worth stepping back to consider how these four patterns apply for your product or market.  Start by determining which barriers are relevant and most important in your market.  While they are all present to a degree, typically one or two will rise to the top and pose a bigger challenge to your success. Source the data from internal expertise and experience, insights from Sales, or formal market research.

Then decide where the challenge is most effectively solved:  Is it a product problem? For example, is it just too complicated for users to adopt?  Is it a Marketing problem–are we targeting the right prospects with the right message?  Is it a Sales problem–does Sales need to engage stakeholders to address change management concerns?

Approaches to mitigate each barrier include:

  • If satisficing is a top barrier, Marketing and Sales need to highlight hidden pain points that the market doesn’t yet recognize. This can include identifying new stakeholders who are most likely to be unsatisfied, or to have the most to gain from disrupting the status quo.
  • The pain of transition may require that the implementation process be a focal point in the sales process, to show a clear and successful methodology for achieving the goals for the new system.
  • To compete against other priorities, Sales needs to understand IT’s broader plans and goals. This knowledge equips Sales to make the case for your solution. It may also provide a reality-check on the likelihood of a sale, and timing of the decision.
  • Mapping ecosystem dependencies at a macro level informs the market opportunity analysis and business case for a new product. If critical elements of the ecosystem are missing, adoption will be slower, take longer, and require more evangelizing.  At a more micro level, knowledge of the ecosystem dependencies can be implemented to improve lead generation and qualification.

In summary

Successful adoption of innovative products (at an individual customer or for the market as a whole) depends on many factors.  Incorporate this analysis into your strategy to effectively allocate resources against the barriers present in your market.

 

Joe Radwich

Joe Radwich
Vice President

Speaking to Trust in B2B messaging
03.10.2017

Communicating trust in B2B sales and marketing messages requires showing, not telling. Here’s one way to do it.

In many B2B sectors, Trust, or Trustworthiness, sits near the top of market’s vendor evaluation matrix. Given that trust is earned over time presents a barrier to prospects switching to vendors that they don’t have experience with. When vendors say Trust me, at best the market views it as marketing-speak, at worst it conjures up images of unsavory car salesmen.

At a high level trust equates to delivering what’s promised. This promise consists of a mix of discrete rational and emotional elements (e.g., ability to understand the customer’s need, expertise to provide the right solution, on-time delivery, confidentiality, financial stability, makes me feel valued, has my best interests in mind, etc.). The emotional dimensions need to be experienced to be credible. However, using the rational elements in value propositions and messages begins to build trust in the marketplace – it shows that the vendor understands what is important to customers and prospects.

Finding the right elements to emphasize becomes the challenge. Primary research offers different approaches that help marketers understand how to build trust with prospects. Quantitative research uses statistical analysis to measure the impact of specific attributes in cultivating trust. Qualitative research explores the personal dimensions of trust in B2B relationships. The following provides a high-level overview of how primary research can help identify the core drivers of trust.

Quantitative research

Statistical approaches such as regression analysis can measure the strength of the relationship between trust and specific service/product attributes, e.g. to what degree does billing clarity drive trust and how does its influence compare to other factors such as on-time delivery, or security.

The first step in regression analysis is to generate a list of attributes that likely contribute to trust; the more specific the attributes are, the better. Most B2B marketers start their lists with the intuitive ones such on-time delivery, product quality, no hidden fees, etc. But it is important to include factors along the customer journey that may seem small, but can have a big impact on trust such as accurate billing, things work the way they were described in the sales process, consistent account reps, does not go over my head to win business, etc. Some B2B marketers can generate diverse and comprehensive lists based on the team’s collective knowledge about the market, others find conducting a small set of customer interviews helpful.

The next step is to conduct a survey with customers/prospects to measure how the company performs across the discrete elements related to trust and overall trustworthiness. A regression analysis of the data will identify the strength of the correlations. A key benefit of regression is that it derives predictors of trust by exploring how customers view their vendors and relationships, rather than through importance ratings (what customers say is important and what drives their perceptions in the real world may be different). Once the core drivers of trust are identified they can be leveraged in sales and marketing communications.

Even if a B2B marketing team does not have the budget to conduct survey research with customers and prospects, going through the process of systematically identifying the possible drivers of trust can help the organization. It provides a framework for the team to conduct an internal assessment of how the organization performs across these dimensions and identify any critical gaps that should be addressed.

Qualitative research

Qualitative research approaches such as open-ended, in-depth interviews (IDIs) with customers and prospects can provide fodder for the personal narratives around trust. IDIs are a good methodology to understand how individuals develop opinions and to explore the emotional side of business decisions. In IDIs, individuals are asked to talk about experiences such as: When a vendor exceeded their expectations, let them down, provided peace-of-mind in a crisis, how these things affected them personally, etc. Their responses provide insights into the characteristics of vendors that customers deem trustworthy and their emotional connection to those traits. B2B marketers can use these themes, tonality, and vocabulary to develop value propositions and messages that resonate with the market and speak to them in their own words.

You can trust us because…

At the end of the day real trust is earned through repeated successful customer interactions. However, B2B vendors can credibly position themselves as trustworthy, by demonstrating that they understand what it takes to earn a potential customer’s trust.