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How to strengthen sales and margins by understanding modern buying behaviour

27th March 2015

  

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By Mark Eardley

Revenues and profitability are no longer driven by traditional business-to-business (B2B) sales teams. In today’s online business environment, the influence of sales teams has been replaced by the influence of the Internet.

Behaviour in the B2B buying cycle has fundamentally changed. Prospects and customers no longer need or want extensive inputs from salespeople. They conduct their own research on the Web as they assess products, services and vendors. Their buying decisions are further informed by online user groups and specialist news sites. The Net has created business buyers that are self-informed and self-sold.

In every B2B company, the single most important task is generating profitable sales. For decades, the task has been entrusted to sales teams. Their role was to build relationships that influenced buying decisions, guiding customers through the buying cycle from the point of initial interest to signing on the dotted line.

But this long-established role is threatened. The Internet has matured into a trusted information resource and buyers are confident in using it to advise themselves. They decide what they need and where they will buy it – on their own. This means their first direct contact with a sales team may simply be to enquire about pricing and lead times.

This shift in behaviour has forced the sales function towards the end of the buying cycle. Even the most able sales teams have less and less opportunity to influence the buying decisions that generate their company’s sales and margins.

Companies can counter the Internet’s threat to sales and margins by understanding how to build customers’ confidence – often remotely – as they move through the buying cycle’s six phases.

In the first two phases, customers identify needs and set criteria to meet them. They track opportunities and threats in their markets and consider the implications of potential responses. Online and on their own, they access analyses of trends and pricing and follow respected commentators in specialist media.

Developing these insights is usually a function of executives and senior managers. Suppliers must, therefore, task their marketing teams to reach customers with relevant, credible information that builds trust and respect.

In the third phase of the cycle, customers research solutions that comply with their criteria. This function may well be delegated to operational managers, who need factual information about products, services and the vendors who might supply them. They download best practice guides, case studies, product sheets, test reports and endorsements. Once more, it is marketing’s task to engage these individuals with information that addresses their specific concerns and requirements.

Direct contact with a sales team may only happen in the cycle’s fourth phase: testing and evaluation. This is when customers request product demonstrations, proof of concepts or testimonials from existing users. The type of information required in this phase is different yet again – and so are the people who need it. It might be technical information that defines the operational requirements and performance expectations of a product trial. For a customer’s finance department, it might illustrate cost-of-ownership options.

Digitally empowered customers prefer to move through the cycle’s first three phases without speaking to a sales team. They do not welcome anyone selling to them. The result is that their perceptions and intentions become embedded as they gain confidence in the advice they give themselves.

This advice becomes most significant in the cycle’s last two phases: selecting suppliers, negotiation, contractual matters, and, hopefully, the happy ending – agreement to buy and implement.

But all too often the ending is not happy – self-advised customers can create formidable barriers to closing deals. If a supplier has not used the right channels to reach the right people with the right information in the cycle’s opening phases, customers are liable to form expectations of quality, time, service and price that are unrealistic and cannot be met.

For sales teams, altering these expectations late in the buying cycle can be plagued with difficulties. Negotiations become bogged down in reappraisals and revisions. Momentum and time are lost as customers step back and reassess. Compromise erodes the potential performance of products, services and processes. More importantly, pricing often becomes the dominate influence in buying decisions, resulting in lower margins or lost sales.

The influence of the Net also creates sales barriers for companies that are not visible, relevant and credible in the cycle’s early phases. These companies risk being ‘out of sight’ and ‘out of mind’. If their marketing – particularly online – fails to provide the information that motivates buying decisions, customers and prospects will look elsewhere. And that is where their money will go. Elsewhere.

 

Eardley assists organisations in defining and achieving B2B marketing objectives that generate sales and protect margins - mark@eardley.co.za

Edited by Creamer Media Reporter

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