Posts Tagged ‘buying process’

Is your company batting .300?

Monday, February 16th, 2009

By Barbara Bix -Sports teams watch video replays to learn from experience and see how they can improve upon their game. In so doing, they examine what worked—for them and the competition—at various points in the game. They also study their performance under various playing conditions.

More than win or lose–it’s how you play the game

The goal is not so much as to see what cost the game, but to note specific behaviors that contributed to the win or loss—at crucial points in the competition. Only that way, can they reduce future vulnerabilities and replicate success.

Will deeper scrutiny increase sales?

Similarly, businesses that have Six Sigma programs fine-tune their manufacturing operations to weed out errors and reduce expense. Even health care organizations have begun to study what works and what doesn’t to isolate opportunities to save lives and delay the progression of disease. That said, relatively few companies have dedicated the same scrutiny to determining what it would take to accelerate revenues. Those that do tend to focus on sales performance—and reasons for wins and losses.

Shorter sales cycles are like base hits

In our experience, the real opportunity is shaving time off the sales cycle—rather than just improving the close ratio. It’s not uncommon for companies that sell professional services and other complex solutions to experience six to nine month sales cycles—with each extra month delaying recognition of tens of thousands of dollars of revenue. And the opportunity for delays is abundant.

Eliminate sales obstacles to speed the sale

If you look at the typical buying process: there are at least four major stages: awareness, interest, evaluation, selection. Each of these stages contains multiple hurdles as evaluators gather the information they require to minimize risk and assure themselves that sellers will deliver the promised benefits. Each of these hurdles can add weeks or months to the sales cycle. For example, with everyone’s busy schedules just checking references can postpone a sale by several weeks.

Web 2.0 reduces control over the sales process

Identifying potential delays is a major challenge. In the old days, the salesperson controlled most of the sales process and could often provide valuable insights into what worked and what didn’t—if he or she had the time to debrief managers at the home office. In today’s Web 2.0 Internet world, however, influencing the outcome—and even finding out what happened is more difficult than ever before.

Social media means sales comes late to the party

In many cases, the deal may be mostly done, before the buyer ever contacts the company. First, stakeholders may research options on the web, learn more about various products on the vendors’ websites, form their impressions of the company by postings in the blogosphere, and even contact current customers directly for references–after finding their names in press releases or company case studies. In some cases, companies can gather information about prospective buyers—and their intentions—by monitoring website activity. In other cases, buyers build their impressions based on interactions with their party sources—and sellers have no visibility into what transpired or the impact.

Deep insights drive sales

So, what’s a seller to do? Unlike at sports events, you can’t watch an instant replay. Sometimes the only option is to interview prospective buyers directly. Those that do can then find out who was involved in the buying process, how they gathered information, what impressions they formed of the company and its competition, and what caused them to move forward—at every stage of the buying process.

Actions speak louder than words

Although dialogue doesn’t offer the same fidelity as a video camera, an experienced interviewer can often find out what happened at every stage of the process. Because humans have limited awareness of their own motivations, this focus on behaviors and actions, is far more useful than buyers’ insights as to what factors affected the final outcome.

Base hits add up to runs scored

Once sellers have the play-by-play information in hand, much like the sports teams we discussed earlier, they can reduce vulnerabilities and replicate successes. And by improving their strategies, tactics, and execution at every stage in the process, they’ll almost certainly shave time off the sales process—and they may even close more deals.

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Shorten the sales cycle next year: Year end marketing planning

Monday, December 29th, 2008

What’s the financial impact of winning one more account per quarter? What would it take to do so? If you don’t know, now may be the time to find out so you can improve the top line next year.

Capitalize on success, avoid repeating mistakes

As the year ends, it can be helpful to take stock of what worked and what didn’t—so that you can capitalize on your successes and avoid repeating what turned out to be mistakes. Our clients find that one of the best ways to do this is to go straight to the horse’s mouth—the customers that bought and those that didn’t.

Make the most of your sales and marketing investments

Interestingly, despite the fact that many businesses invest a lot of time and money in getting new clients, relatively few have a structured process for going back to find out why they won when they won—and why they lost when they lost. Of those who do, many are surprised to find out that the reasons were not always what they suspected.

Forget your sales process, get into your buyer’s mind

As we’ve discussed in previous posts, your prospects’ buying process often starts months before your sales cycle. So step one is mapping their buying process so that you can later identify points where you could intervene more effectively to elevate your organization above the competition. For example, if you can find out what circumstances caused prospects to search for a solution in the first place, you may be able to source more buyers, just by looking for others in those same circumstances.

Nevertheless, the circumstances themselves may not be obvious. Although you may think that a prospect engaged one of your competitors to handle a recent acquisition, you may be surprised to learn that the prospect actually began sourcing a solution provider a year earlier when their own competitor launched a product that their own product line lacked. If that’s the case, then it may not be fruitful to focus on companies that have announced their attentions to acquire another company. Instead you may want to pursue companies whose competitors have recently made major announcements.

What do prospective buyers’ really care about?

When we perform win/loss analyses for our clients, we concentrate on buyers’ perceptions in four areas: the desirability of the solutions, the reputation of the vendor, the effectiveness of the communications, and the responsiveness of the individuals leading the sales or business development effort. In each case, our goal is to learn what factors were most important to the buyer and how our client’s company performed relative to the competition.

What really worked? What needs to change?

Rather than seeking to find out whether their performance was better or worse, we look for differences in our clients’, or the competition’s, performance that may have affected the outcome of the sale. Sometimes finding out why you won can be as, or more, useful than finding out why you lost. For example, the insights you gain may cause you to reinforce a particular marketing message. Or, they may drive you to reallocate your sales and marketing resources for greater impact.

Win or lose, relationships matter

So, as you’re closing the books on this year, ask yourselves whether you know for certain what to do differently next year. If not, it’s worth it to find out. Best case, next year will be more profitable. Worst case, the prospects in whom you’ve invested so much time will see how much you care about doing your best—and may be more likely to buy from you (again) next time!

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Making the sale depends on addressing an urgent need

Monday, August 4th, 2008

This diagram describes the buying process. I contend that before anyone buys anything, they need to go through these nine steps. This is true for any purchase.

The higher the risk, the longer the sales cycle…

For low risk, inexpensive purchases like a candy bar, buyers whip through all nine steps in a matter of seconds. When it comes to major purchases, the buying process often takes months and sometimes years. For example, think back to the time it took your own business to decide to put up—or even redo—your website…

Let’s walk through the buying process to begin to understand some of the circumstances that cause sales cycles to stretch out, beginning with the first row of the chart (although in practice the second or third row may happen first).

Only those that have a need will purchase

The first box is labeled HAVE NEED. That’s because no one will buy from you unless they need what you have to offer. Nevertheless, most businesses waste resources promoting solutions to unqualified prospects–those that don’t need what they have to offer and therefore will never buy. For example, my small business sometimes gets sales calls from companies that sell products and services that only make sense for much larger companies.

But first they must recognize that the need exists

The next box is labeled RECOGNIZE NEED. How many of you know of companies that would be much better off if they purchased from you—but they’re continuing to do business in the same way they’ve always done? Chances are if they stopped to consider the real costs of inertia, they’d behave differently–but in the meantime sales cycles stretch out.

Take for example, some of the taxpayers that use the post office to submit their taxes. Many are aware that they qualify for free filing and have computers—but they continue to post their returns via US mail.

Although some subset of these individuals has well thought out concerns about filing over the Internet, most have just never stopped to really examine the pros and cons. In fact, they probably would have filed their returns electronically if they had only learned of the option when they were less busy—or realized in advance just how long they would have to wait in line on April 15 to obtain proof that they had mailed their documents in on time. Nevertheless, they didn’t; so the IRS will have to wait at least another year to consummate the sale.

Then, it generally takes a sense of urgency to generate demand

The third box is labeled READY TO BUY. Many buyers not only need a particular solution; they are aware that they should take action. Nevertheless, they delay buying because the urgent takes precedence over the important. In fact, it’s not uncommon for other initiatives to continue to take priority until the need becomes truly pressing.

To sum up, getting the sale depends on finding prospective buyer that need what you have to offer.  Nevertheless, need is a necessary but not sufficient condition.  Prospective buyers must realize what they’re missing by delaying a purchase and develop a sense of urgency about filling the gap.

Next week, we’ll proceed to row two of the buying process chart and discuss three more factors that can cause sales cycles to stretch out.

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Shortening the sales cycle starts with getting into buyers’ minds

Wednesday, July 23rd, 2008

Last week, we discussed the importance of reducing the cost of sales—which I defined as the time it takes to prospect for new clients and close new business. This week, I’d like to discuss how to get started.

Step one is recognizing that for the most part, we can’t convince anyone to buy something from us that they don’t want. When it comes to shortening the sales cycle—as with other forms of behavior change, the thing to remember is that it’s all about attraction and motivation—rather than persuasion and pursuit.

Purchasers decide what they want to buy and equally important how they prefer to buy it. All we can do is make it easy for them to buy from us.

The key to success is anticipating prospective buyers’ needs and then making sure you give them exactly what they want, when they want it, how they want it—before they ask. When we neglect to first understand how our clients prefer to buy, we run the risk of failing to make the necessary connection and causing sales cycles to stretch out. Let’s look at a few examples.

Suppose prospective buyers need a written understanding of what you will deliver, and you don’t have it. Sales cycles will stretch out while you prepare the necessary documents. If they require certain payment terms, and you can’t provide them, the sale stalls until you obtain authorization to give them what they want—or worse, you may end up losing the deal. If they depend on their trusted advisors for recommendations and these advisors aren’t familiar with your business, you’ll need to wait while they perform due diligence, or more likely, miss out on the opportunity altogether.

The better you understand prospective clients’ buying behavior, the greater is your ability to anticipate obstacles, and then take action to shorten the sales cycle. In short, upfront marketing research pays. More about that in a later post.

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