When Customers Engage Sellers (It’s not when you think)

Contrary to some current misconceptions, B2B buyers are not in fact conducting much of the buying cycle unaided by sellers, evaluating solutions on their own, and only reaching out to suppliers in the late stages of their process. According to Inside the Buyer’s Mindwhich researched over 1,200 buyers and sellers, over two-thirds (67 percent) of the buyers seek input from suppliers before they begin to evaluate solutions. More strikingly, more than one-third (35 percent) work with suppliers even before a project is identified; and nearly half (48 percent) look for assistance prior to working on their business requirements.

WHEN BUYERS AND SELLERS FIRST ENGAGE

The results directly contradict an often-quoted statistic that buyers are 57 percent of the way through their buying process before engaging a supplier.[1] As evidenced by the data, buyers need sellers early. This does not mean that buyers are not more educated, or that the world has remained the same, but that today’s crazy busy buyers need sellers to help them, to create, not just communicate, value. That’s a wonderful opportunity for mutual authentic engagement between buyer and sellers, in pursuit of shared goals.

According to the McKinsey B2B Customer Decision Journey survey, customers find it helpful to speak to someone 76 percent of the time when buying a completely new product or service, and 52 percent of the time when buying a previously purchased product or service but with different specifications.

 WHEN BUYERS FIND IT HELPFUL TO SPEAK WITH SOMEONE

It is important to remember that not all sales or purchases are the same. As cost increases and the complexity (intellectual property) of products or services being transacted grows, the greater the potential impact on an organization. The Kraljic Matrix described in Digital Sales Transformation in a Customer First World adds further depth to this analysis. It usually means that buyers need help from sellers earlier.

Two other important factors that need to be considered from the buyer’s perspective are risk and frequency of purchase. As frequency of purchase increases, organizational impact tends to decrease. As risk increases with cost and complexity or IP value — for example, in the case of business infrastructure projects or a CRM system — organizational impact increases, along with the buyer’s need to engage earlier and more intensively with sellers for guidance and input.

THE BUYER’S PROBLEM

The results from Inside the Buyer’s Mind also shows that sellers who engage early have a 30 percent greater win rate. When a buyer contacts a seller earlier, the win rate increases. But sellers can‘t wait for the buyer to call. They need to add value when no one is buying. They need to devise strategies to encourage this early engagement from the buyer and make sure they are building the right relationships.

Once the problem or opportunity is understood, objectives and requirements are determined. In the past the customer might move straight to the RFP (Request for Proposal) stage. In today’s Internet centric world, customers may look to online sources, social networks, or peer recommendations to further inform their next steps. At some point, suppliers are invited to provide information in the form of an RFP or other mechanism, and the customer evaluates the different offerings. Clearly, the earlier you are involved in the cycle, the better position you are in to shape the requirements, and to influence the progression along the way.

The customer will choose the product or service that meets their requirements and negotiate contracts with the chosen supplier. The chosen product or service is then implemented. Finally, the solution is measured for return on investment (ROI) against metrics established in the Customer Decision Cycle.

CUSTOMER DECISION CYCLE

To develop better customer relationships you need to engage them at the right time. Generally speaking: earlier is better.  The appropriate engagement strategies are set out in my book: Digital Sales Transformation in a Customer First World.

[1]      CEB: The End of Solution Sales.

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