Information Asymmetry…..

Information Asymmetry has been a powerful tool in buying/selling almost from when Eve convinced Adam to take a bite of an apple. Centuries ago, Francis Bacon said, “Knowledge is power.” We’ve always tended to wield that knowledge as a weapon, creating advantage to us.

Information asymmetry occurs where one party has a disproportionate informational or material knowledge advantage over the other party.

When I first started selling, simply giving my customer data sheets/specs, case studies, brochures about products drove my ability to engage them in conversations about their business. The customer needed in formation about potential solutions, and the easiest way to get it was through a salesperson. We had the power of managing the information about solutions they might want to consider.

That advantage is long gone! Our customers have more information about our and our competitors solutions than they know what to deal with. In many cases, they have more information than we do.

But, for reasons I don’t understand, we pretend the asymmetry still exists. We continue to focus on pitching our products, going through our decks talking about the features and functions, and our superiority to the alternatives. Not surprisingly, customers don’t care.  They already know as much or more than us about our products and the alternatives.  There is no asymmetry, as a result, the customer doesn’t need us.

See the issue with information asymmetry is when one party knows what the other party doesn’t, but needs to know.  It’s that asymmetry that creates the desire/need for the party needing the information to engage with the party that has the information.

So what does this mean in today’s world of engaging buyers?

In complex B2B buyers are doing something they have never done before, or may not have done in a very long time.  Some things our customers struggle with:

• Recognizing they may have a problem, or there may be an opportunity for them to grow and change.  They may be blind to the issues, simply through lack of knowledge of what might be possible.
• Knowing how to define the problem, and define approaches for understanding the problem/it’s impact, who should be involved, what they should be looking at.  If they have never faced this before, how do they know how to address it?
• Developing and executing a plan to define the issues, get support from the organization and management, assess alternative solutions, and reach consensus on solving the problem.
• And for considering the solutions to their problem, if they have little experience in doing this, they don’t know how to buy.  What alternatives should they consider, what are things most important in their decision, how do they evaluate the alternatives?
• Building the business case, implementation plan, gaining approval and support within the organization.
• Building their own confidence they are doing the right thing.  Despite all the facts, figures, and data, 60% of committed buying efforts end in no decision made.  And the biggest factor in that is Fear Of Messing Up and decision confidence.
• …. and others…

As we look a these, we quickly recognize a huge information asymmetry!

The customer has never/seldom gone through this before!  They struggle with this, and most often they fail!

Yet we have deep experience in working with 100s and 1000s of customers facing similar issues.  We see where they have succeeded and failed.  This is the information asymmetry that exists today, and the opportunity for us to leverage that in creating value with our customers!

This asymmetry has little to do with our products, there is no asymmetry there.  But it is in the problem solving, change management, and confidence building process. 

Imagine, if we started providing the help that our customers need! 

Afterword, I’m leveraging an AI tool that discusses the article.  Enjoy!