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