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"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
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.
- Map the last 30% of the buying journey in more detail
- 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.
While B2B marketers wait for their organizations to adopt big data tools, they can leverage a range of cost-effective data sources to inform decisions that move their companies forward.
The following are some of low-cost or free data sources (little data) B2B marketers, product managers and strategists can use to evaluate market opportunities, competitors, customer needs and overall market trends.
- US Census
- Publicly available reports/articles
- Mining internal data
- Interviewing sales reps and account managers
- Deeper read of customer survey data
- Social media and job sites
- Conducting win/loss interviews
- Reference class comparisons
Hoovers/D&B (or other list sources)
Hoovers (www.hoovers.com) self-service, prospect, list-building tools can help determine the number of businesses in a segment. Once you set your parameters (e.g. Hospitals with at least 500 employees) Hoovers provides counts for the number of businesses in that segment overall and in sub-segments (e.g. hospitals with 500-1000 employees). You can refine your search, start over, etc. to get more data. You don’t pay unless you purchase a list.
US Census Bureau
The Census provides similar data to Hoovers, but has the advantage of historical data which allows you to see if a segment is growing/shrinking (www.census.gov/econ/). One downside is that the Census’ search tools are clunky.
Publicly available reports/articles (desk research)
B2B marketers need to understand the segments they serve, or plan to enter. Insights into market trends, product use, and market dynamics can be gleaned by reviewing publicly-available reports and articles. Government agencies and trade associations produce reports on broad economic trends and share data from market surveys they conduct. Each industry also has its own trade publications that discusses overall trends and challenges.
Analyst reports profile specific markets and product categories. Most analyst reports charge for full access, but there are often nuggets of information in the free synopsis. In addition, the data source is often cited in other publicly-available sources such articles and vendor marketing materials (e.g. we are in the Magic Quadrant).
Many B2B companies issue press releases when they acquire a new customer, make an acquisition, form a partnership, etc. providing insights into the direction the competitor is headed.
Having a reference librarian or researcher can make the information gathering from these sources much more effective and efficient – simply Google searches can waste a lot of time on a goose chase.
Mining internal data
Sometimes, B2B marketers don’t know what data they available because it is spread out across the organization in different systems and databases. Conducting an information audit will identify the data available for analysis. Taking it a step further, combining the disparate data into one database or spreadsheet can provide surprising insights through simple cross-tabs or pivot tables. If you have more advanced analysis/reporting tools, all the better. Some companies have staff and tools that make pulling the data together easy. In others, B2B marketers must slog through the merging, cutting and pasting data and data files.
Interviewing sales & account reps
Sales and account reps have more direct contact with customers and prospects than anyone else in your company. You can use informal one-on-one conversations, structured round-table discussions or simple online survey tools to explore the requests they receive from customers, competitors they see in the market, solutions in place, etc. Their feedback may be biased towards short-term sales, but it can still provide insights into overall market trends.
Deeper read of customer survey data
VOC and NPS surveys provide a great deal of data beyond the overall score – which often gets the attention. For example, reading through the full set of open-ended comments provides context and texture around customer needs. Combining other customer data with NPS data allows you to look at trends and differences across different type of customers (e.g. product segment, sales volume, tenure as a customer, etc.). Manually creating a spreadsheet that combines the data is cumbersome, but often faster than trying to get things combined in your ERP or CRM system.
Social media, and job sites
LinkedIn, Salesforce’s data.com, and Hoovers provide insights into a competitor’s number of employees and revenue. You can see how many staff are devoted to sales and marketing activities, where sales reps are located, etc. Each source will have a slightly different number for these metrics but by looking at more than one you will triangulate on a usable estimate.
Jobs sites such as Indeed.com and the Hiring section of a competitor’s website can indicate if the company is growing and their focus (e.g. are they hiring more marketing people than would be expected, a certain type of engineer, etc.).
A search of SlideShare can uncover sales and investor presentations and similar materials that show how a competitor is presenting itself to the market.
Conducting win/loss interviews
Conducting interviews with recent wins and losses provides insights into the market’s decision process, vendor evaluation criteria, and how you compare to competitors. Win/loss interviews are best conducted by a third-party partner. If using an external partner isn’t in the budget, the interviews should be conducted by someone not connected to the sales process.
Reference class comparisons
The goals of data-driven decisions are to predict the future and narrow uncertainty. Reference class comparisons—an analytical approach, rather than a data source—can help frame likely future outcomes. The past doesn’t necessarily predict the future, but it’s a good place to start. Future product introductions, acquisitions, entries into new markets, etc. are likely to unfold similar to previous efforts. If you predict that the new effort will be significantly different from the past it forces you to evaluate and identify the data that supports your assumptions.
Tying it together
The secret sauce of big data is that it combines disparate data to form a conclusion based on the relationships that exist. Big data uses algorithms, models, and machine learning to create an outcome that is greater than the sum of its parts. B2B marketers do this daily using little data, basic tools and their experience and judgement – the original big data machine.
Collecting and combining the data sources is time consuming and tedious. It also doesn’t answer all the questions – every decision is based on incomplete data. However, it’s worth the effort: It provides insights that will help B2B marketers evaluate market opportunities, competitors, customer needs and overall market trends.
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.
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.
Despite the best sales and marketing efforts, inertia keeps most prospects from changing vendors or trying new solutions, even when they display initial interest. Speaking to pain-points is often a more effective strategy than emphasizing aspirational benefits for overcoming the inertia that exists at the end of the B2B purchase decision journey.
B2B marketers naturally focus on the aspirational benefits of their solutions. The big interesting ideas behind their solutions provide much of their brand’s identity. The product management team spends its time enhancing solutions and gives Marketing more paradigm-shifting features to talk about.
These aspirational benefits, especially for new solutions, create excitement, generate buzz in trade publications, foot traffic at trade shows, and initial sales calls. But the level of sales generated often falls short of the expectations built on the positive reactions.
The problem with relying solely on aspirational benefits is that it:
- Assumes that customers are unhappy with where they are at now.
- Underestimates the market’s tolerance for good-enough
- Underestimates the hassle and challenges of switching vendors or changing processes.
- Lacks customer focus – aspirational benefits talks about what the product can do, not what the prospect needs.
Volumes of research into purchase decisions shows that people and organizations typically only invest when they face a pain-point and feel a pressure to act. For decades, sales training organization have made “selling to pain” a pillar of their approach.
Selling to pain is not the same as selling directly to fear, nor is it a negative message. It involves speaking to the areas where prospects are falling short of their goals and objectives and how your solution will help overcome the barriers they face. It focuses on the mundane, nut-and-bolts challenges they face.
Pain surfaces when customers are under pressure to adjust to market changes such as new regulations, loss of market share to competitors, or a general shift in the market’s expectations. It can also come from internal pressures such as slowing growth and top-down directives.
Psychology drives the bias towards pain over aspirational fulfillment in B2B markets. Businesses are made up of decision-makers and decision makers are human. Pains and pressures trigger our loss aversion tendencies and are easier to conceptualize for most people.
- Loss aversion: We feel the loss of something much greater than we do a corresponding gain. Negative feelings about losing $100 are stronger than the positive feelings brought on by winning that same $100. Businesses and B2B decision makers feel pressure when they are afraid of losing something such as market share, profitability, a promotion, or even their job.
- More concrete: Most decision-makers know the problems they face and can conceptualize how a new solution will address their problems: This supplier has a lower price so my overall costs are lower, this CRM system eliminates the duplicate data and work my staff has to deal with, etc. The aspirational benefits (profitability, efficiency, security, etc.) can be ambiguous, especially to a company that feels they are doing an ok job today and that their solutions are good enough.
Corporate vs. Product Marketing
Aspirational benefits still play a critical role in the sales process – they get prospects into the top of the funnel. They garner attention and can position firms as thought leaders. They are core to a vendor’s brand identity. As such, corporate marketing and branding should focus on the big picture aspirational benefits a vendor and its solutions provide.
As prospects move through the decision journey, product marketing, sales collateral, sales processes should begin to emphasize pain-points and pressures, the question of “What is the prospect struggling with today?”.
Identifying the pain
B2B markers have multiple means of identifying the pains and pressures that motivate purchase decisions in their markets.
- Sales team – As part of their process, good sales reps will seek out where prospects have pain. They can provide insights into the broad trends they see across prospects.
- Implementation teams /account managers – Functions that touch customers on a regular basis can provide insights into how customers are using solutions in the real world – what are the using the solution to address.
- Industry news – The key issues business struggle with will surface in what users (not vendors) talk about in trade journals, conferences, user groups, etc.
- Primary research – In-depth interviews and surveys can directly explore pain-points and pressures within customer and prospect markets.
Communicating the big-picture, aspirational benefits of your solution is key to generating interest in B2B markets. However, once you have the prospect’s attention, start speaking to their pain points or they may slip away into the morass of inertia.
Speaking to Trust in B2B messaging
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.
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 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.