We work to find a customer with a need to change. They have a problem that we solve, they express a strong need to change. We qualify them.
They assemble a buying team, over the years, for complex sales the size of this team has grown. We work with them, identifying their needs and requirements, helping them think about the issues, presenting our solutions/capabilities, demonstrating that we are the best choice. We work on moving them as aggressively as possible to making a decision and choosing us.
In the background, our managers are pressuring us. They are conducting deal reviews. They are asking when we can commit the opportunity to the forecast. As quarter end, the pressure increases, “Can you book this deal by the end of the quarter?”
We’ve been here before. We dig into our “bag of techniques,” to find ways to get the customer to buy. Perhaps there are ways to “sweeten the deal,” we add some things, usually unimportant to the customer, to the offer. Perhaps some services, perhaps some optional features. Alternatively, we try to increase their sense of urgency, “If you don’t order by….” And then, there’s the king of all techniques, the discount. “If you order by this date, we will drop the price significantly!”
Sometimes it works. In those cases, the customer is probably experienced and knows they can get concessions. They’ve reached a decision, they are just trying to get the best deal possible and they know what sales people always do.
Most of the time, it doesn’t work. The customer doesn’t order. Even if they thought they might have a decision in the quarter, it slips, and slips…..
The problem is the difficulties customers have in making buying decisions has little to do with choosing a solution. Yet all our work focuses on “choose us!!!”
There are four key factors impacting customer buying decisions:
- 28.2% of “committed” customer buying efforts end in no decision made because, in the end, they were not committed to the change. In the end, the consequence of doing nothing became acceptable.
- 31.8% of “committed” customer buying efforts end in no decision made because of “indecision.” In this case, the indecision is not on solution selection, but more on factors internal to the customer, “are we doing the right thing?” “What if we mess up?”
So 60% of the opportunities of the opportunities that we qualify and work diligently to close end up in no decision made!
So, we and our competitors are left to deal with the remaining 40%. And there are problems with those.
- The majority of complex decisions made ended up being “high regret decisions.” These are customers who believe expectations have not been met, or they settled for something less than they originally intended.
- And for those decisions, buying cycles are getting longer! On average they are getting 7-10 months longer! And why is this happening? Customers say the team members had, “different and conflicting objectives” in making a choice.
We see some commonality across both the buying efforts that ended in no decision made and those that were made, with high regret. And the commonality has little to do with solution choice! But that’s what we always focus on.
The challenges our customers face is really about consensus!
How do they agree, from the very beginning, on what they are trying to achieve, why it’s important, consequences of inaction. How do they maintain that agreement as they progress through their buying effort? How do they build their confidence about whether they are addressing the right issues, identifying and managing the risks, doing the right thing? How, in the end, do they have confidence that they have chosen well?
Helping our customers buy is more than helping them choose! It’s helping them gain consensus at the very beginning of their buying process. It’s about building and maintaining the consensus and collective confidence through their entire buying process. And it’s fulfilling that, once they choose and are implementing.
And the interesting effect of doing this, is when create great value in helping our customers buy, we are also having a great, value based impact on who they choose.
Afterword: The data on the no decision made comes from the great work done by Matt Dixon and Ted McKenna in The Jolt Effect. Make sure you buy it when it comes available in the Fall!
Afterword: The data on buying cycles and buying regret comes from Hank Barne’s outstanding research on Enterprise Buying. Make sure you study his posts on this!