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Why B2B Buying Decisions Are Taking Longer Than Ever

November 10, 2011 in Attitudes & Behaviours, Communication, Mindful selling, Sales Coaching, Sales Leadership, Sales Management, Sales Planning, Sales Relationships, Sales Training

Are companies taking longer to make buying decisions or does it come down to impatience on the part of the B2B sales person, in a hurry to reach their sales targets? It seems nowadays buying decisions are taking longer to make than in previous years.  This slow purchasing process isn’t just happening at the enterprise level in large scale businesses, it’s extended right across the board.

Protracted buying is dramatically slowing the sales process. The flow-on effects of such time delays are causing blow-outs in the cost of sale for many sales teams and businesses.  Delayed purchasing results in longer lead times and inconsistent pipeline predictions for sales teams. Of course, this in turn creates panic at the ‘C Suite’ when sales leaders can’t easily predict their forward orders and report on work in progress, thus leading to further indecision and so the cycle goes on….

Extended Pipelines

Extended Pipeline Length

So what’s causing this to happen?

Firstly let’s look at what isn’t the cause. We’ve all known sales people who have ‘prospects’ sitting in their pipelines for months on end going nowhere.  Their ‘prospects in waiting ’ have usually turned out to be nothing more than phantoms put there by the sales person to make up the numbers so their figures look more impressive. This “puffing up the books” is all too common and completely useless to the salesperson, the team and the business. Many sales managers have to conduct a ‘chat’ with the sales person about the validity of these so called prospects to determine their bona fides.

 

However, effective sales people are now finding that the timelines on prospects in their sales pipeline are lengthening and more work needs to be done to get deals over the line. It’s not just happening at the enterprise, large scale clients like government, semi government entities or large public companies.  Dealing with multiple stakeholders was the domain of large scale businesses involved in large scale enterprise/contract  agreements.  Now, the lengthening of the buying process is occurring across the board.

So why are buying decisions becoming protracted? Are products or deals more complicated? It doesn’t seem so.  What then, is causing these delays?

Once upon a time, you could deal with a key decision maker and an influencer or two; now you have to sell to a committee.  It appears that many buying decisions are now being made by committees. No longer content to entrust the purchasing decision to one or two people who represent the whole business or division as the buyer,  many are now roping in people from across the organisation to give their input, ideas and suggestions as well as being involved in the final decision making process.  Buying decisions by consensus results in elongated sales cycles, more people to know and understand, more complication and increased cost of sale for the business doing the selling.

Uncertainty

Uncertainty

It seems that the real culprit is ‘uncertainty’.  The current market conditions are making people reticent; more hesitant to commit and make decisions; they are looking to the opinions of others, seeing what ‘everyone’ is thinking before they make decisions. And even when they think they have made a decision something or someone else comes along and they change their mind again.  Sound familiar?  It’s not just businesses that are stuck in this loop, we see it on the political stage every day in poll driven politics.

Maybe there is some truth in this ancient Jewish prophecy which goes something like this: ‘There will be a time when leaders will act like dogs’.   What does this mean?  In short if your pet dog is at the off lead park and gets ahead of you, notice how often it will turn its head back to you to see where you are and look at what direction it needs to go in.  It takes it lead from you even though it is ahead of you and technically in the lead. That is how our political leaders are operating and perhaps this in now bleeding into our business communities where leaders are afraid to make decisions without excessive deliberation and consensus.

It is understandable that we need to be cautious as markets become less predictable and seeking people’s input to key buying decisions is important, however buying by committee is making selling and buying really challenging and we all know what can happen when a committee gets involved.  If it’s not paralysis by analysis, it’s certainly more protracted.  Here’s a five minute video that gives you some idea of the complications sales people face.  Although produced with large business deals in mind, I believe this video illustrates how this process is being replicated in smaller deals across the board.

So what does a sales person need to do to meet the challenge of protracted buying decisions?

  • Understand the nature of the business you are dealing with
  • Identify how many people need to be involved in the decision making process within the customers business and in your own business and learn how to connect and communicate with different types of people looking for common ground on which to build a case
  • Get agreement on the customer’s vision and consensus on that vision so you know what they are aiming for and where you can work with them
  • Offer to meet with the committee to ask and take questions face-to-face
  • You may have one contact in the group but you need to get to everyone to understand their needs and priorities so that you are in the best position to demonstrate what you’re about and how you can help them
  • Understand and clearly specify all stakeholders’ key priorities and build a business case that addresses them all (if you can)
  • Be explicit about why you do what you do; how you do what you do; what you do; and how you help people achieve results.  No fluff here. Provide your credentials in a professional format that is written for the client in language they understand and can relate to
  • Be prepared to engage in multiple meetings and be very clear on your purpose for each meeting or level of engagement – don’t leave loose ends
  • Account for the time involved in each stage of the sales process and factor this into your planning, forecasting and costs of sale
  • Don’t barrage your prospect with excessive phone calls or emails to try and speed up the buying process
  • Don’t assume to know the reason for their delays
  • Don’t be wishy washy or indecisive yourself as this will just fuel further indecision
  • Feel confident to ask for timeframes
  • Check if your sales cycle is costing you more than it is worth and where it may be eroding margins
  • Rethink your pricing strategies and ensure they cover your cost of sale
  • Manage expectations and be prepared to report accurately on your sales efforts and the pipeline so that Sales Leaders and the ‘C Suite’ can manage their part of the business and make informed decisions
  • Control what you can control

Whether this is temporary or here for the long term, as sales professionals we need to adapt and work with what we have in the most professional manner possible managing expectations both internally and externally.  So hang in there, be persistent and have enough deals in your pipeline so that you have options and are not caught out with all your eggs in one basket.

Remember everybody lives by selling something.

Author: Sue Barrett, MD of www.barrett.com.au

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Learning how to ride the Boom AND Bust economy

November 3, 2011 in Attitudes & Behaviours, Business Acumen, Culture, Marketing, Resilience, Sales Leadership, Sales Planning, Sales Results, Strategy

These turbulent, challenging and sometimes volatile times we find ourselves living in are making many of us rethink how we do business, how we live our lives and how we engage with the world.  Unless you are hiding under the doona,  the rest of us are witnessing and experiencing a major transition from the Industrial Revolution to a brave new world of the New Tech paradigm.

This transition is exciting and frightening at the same time because the ‘new order’ is not ordered at all.  It keeps changing at a rapid rate leaving a constant sense of unease.   Many of the old rules no longer apply and people are left feeling restless and confused.  Some are thriving, of course, because they love the excitement of so many options and so much change.  However, with too much choice how do we sort through so much information to make good decisions for ourselves, our teams, our businesses, our families and so on?

Is the 5 year strategic plan dead?  Probably.  Is the alternative not to plan at all?  Probably not.

So how do we get used to this? How do we keep our focus and still be adaptable?

boom AND bust hand in hand

boom AND bust hand in hand

Welcome to the Boom AND Bust World.

The reality is we can no  longer claim to operate in a Boom OR Bust economy, where repetitive cycles gave us some form of predictability.  We now live in a Boom AND Bust world where some businesses, communities and countries are prospering and making the most of what’s on offer and other businesses, communities and countries are going out of ‘business’ because they can’t, won’t or don’t adapt quickly enough to have the foundations in place to ensure their future viability.

So how can we learn to adapt and keep our heads while others around us may be losing theirs?

We’re now seeing and will continue to see some industries and businesses halve their sales revenues and watch the disappearance of margins  due to commoditisation, reconstitution or irrelevance of their products.  Other businesses and industries are more than doubling sales because they’re reading the signals and subsequently innovating and adapting to an ever changing world.  Couple this with the massive restructure in consumer preferences and how they like to buy.   People are now looking for connections that are real and genuine as they sort through mountains of information.  They’re looking for businesses, brands and people they can trust.

Some industries will not make it. They’re fighting for relevance, trying to hold onto the old model.  Recently, I was amazed to see a double page advertisement in a major Australian newspaper’s weekend magazine extolling the virtues of GP Pharmaceutical Sales Representatives and how vital they are to GPs education and our wellbeing.   However, according to a recent ABC Radio National Background Briefing report the majority of GP’s don’t want to see medical sales reps; they simply don’t have the time and they can get their information from the web.  Those who do want to see medical usually hope to garner a free lunch or some other bonus unrelated to the medicine and our wellbeing.   The relevance of GP medical sales reps is dying out.   Another business model recently in the public eye is the hard copy newspaper business. What will this industry look like in five to eight years time?  Will hard copy newspapers even exist?  There’s been a dramatic and rapid drop in sales of hardcopy newspapers in Australia alone and new models are quickly stepping in to take their place..

jumping to a better place

jumping to a better place

These are two examples of high profile, powerful industries under pressure to adapt and change. Imagine the benefits of these changes.  For instance, the costs of medicines going down because we as consumers are no longer funding large and expensive field sales forces.  Well, one might dream…  Yet, instead of quickly adapting to change, it’s tempting to put your fingers in your ears or the doona over your head and pretend it isn’t happening.  Not the best strategy for survival.   Adapt or die I hear you say.

Instead of living in fear of change here are some tips to help you navigate your way on your journey and take action to stay on top, out the front or in the game:

  • Assess Risks: Identify and manage your risks. Engage your team and other key people (trusted outsiders) in a SWOT analysis and strategic review http://www.barrett.com.au/sales-consulting.html of your business . It’s a helpful exercise to do (SWOT = Strengths, Weaknesses, Opportunities and Threats) and gives you a good starting point with which to make decisions.
  • Control the Controllables: Work out what you can Control, what you can Influence and what you can not. Then define tactics and set out to do what you can to control and influence your thoughts, feelings and actions.
  • Seek out Opportunities: Look for opportunities where you can grow sales, build markets, create new products or revitalise old products.  A great way to look at where your business can grow is to look at 4 segments:  1)Current Products with Current Customers, 2) Current Products with New Customers/Markets, 3) New Products with Existing Customers, and 4) New Products to New Customers or Markets.
  • Make Decisions: Questions deliver answers. Make sure you ask yourself key questions to help you make better decisions moving forward.   For instance, decide why you are in business. Decide what you want to stand for. Decide what it is you do best and who would value and buy what you do.  Decide if your current business model is still viable or not.    Work out the decisions you need to make and then make them.  Indecision is the worst thing you can do.  Even if you make a wrong decision it is better than no decision.
  • Solve Problems: What problems do you need to solve in your business?  Ask your people for ideas and input.  Are these problems worth solving?  Are they solved via other means other than what we are used to? Sort it out and then get on out there and solve them.   No point doing a ‘BMW’ – bitch, moan and whinge.

We are indeed living and working in more challenging and unprecedented times.   I propose that BAU (business as usual) is now a redundant term.  The 21st century is all about being adaptable, innovative and quick on your feet as well as being a good listener and remaining patient and calm at the same time.  Not your normal bed fellows.

I propose we are now experiencing the paradox of ‘AND’ where we live with ambiguity and need to incorporate ideas and actions that did not go together in the past.  In order to thrive, not just survive, we need to get used to this ‘AND world’ and learn to live as comfortably as we can within the ambiguity and changes that surround us every day.

power of choice

power of choice

That said many people are not comforted by these changes or even by my suggestions, however our success lies in how we approach change.  During any time, especially turbulent times there is one constant – the power of Choice.  We are never without Choice in any situation and how we choose to respond.   So make a decision and choose what is best for you, your people, your business, your customers, your family and beyond.  Build your resilience, learn to ride the waves. Don’t sit back and simply worry because worry doesn’t fix anything, it just makes it tougher for you.

There is a wise Buddhist saying: ‘If there is a problem you can fix, why worry?  If there is a problem you cannot fix, why worry?’

Welcome to the World of Boom AND Bust and enjoy the ride.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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What are the 3 Sales Essentials that make for effective selling?

March 24, 2011 in Communication, Prospecting, Sales Planning, Sales Skills, Sales Training

When we meet with leaders to discuss their sales challenges in achieving sales effectiveness we find that the source of their problems often stem from three key areas: sales planning, sales prospecting and effective sales communication with clients.

Whatever our vocation, we all need to make contact with and communicate effectively to secure the ongoing custom of members, supporters, sponsors or clients to make a living.  Yet too many people still leave selling to chance.  They do not have a robust sales process in place that works for them or their business, product or service.

Because this optimal process is not internally articulated, Sales Managers are often left unable to teach and transfer the necessary thinking, skills, knowledge and frameworks needed for effective and sustained sales performance.  These processes have not been mapped in a logical and easy to follow process.  Instead, they often rely on experienced and successful sales people who sell by intuition and cannot explain what they do that makes them good at what they do.

For 16 years we have been putting Selling under the microscope and have been mapping the knowledge, skills and insights needed for successful selling into three essential processes that set the foundations of much of the work we do with clients:

  1. A Sales Planning process – to create an actionable Go-to-market sales plan
  2. A Sales Prospecting process – to prospect successfully
  3. A Sales Communication process – to have productive dialogues with clients and prospects

When sales people and their managers are provided with these documented processes and taught how to use them competently and confidently, we find a dramatic shift in sales capability and sales performance.  These three essential sales processes are the foundations to an effective sales team. They are not everything a sales team must know to be effective but without these three sales essentials in place sales success is left to chance.  Delivered to sales teams in an interactive way where they can learn the processes whilst applying them to their business is the best way to get traction.  Then reinforcing these processes with follow up sessions and targeted coaching means that these sales essentials have a chance of becoming a ‘way of life’ rather than a fad.

At the very least your sales people should be able to:

  • Develop a Go-to-market sales action plan that tells you:
    • Who you need to be in front of
    • How you need to get in front of them
    • How often you need to do it to make it all worthwhile
  • Know how to make an effective prospecting call and prospect on a daily basis. It’s the first thing that has to happen if you want to make a sale.
  • Communicate effectively by asking people about their priorities, problems and objectives before you talk about yourself and what you have to offer.

When you give people what they need they start to get traction and grow.  Do yourself a favour and make sure you and your sales people are well equipped with the three sales essentials.

Remember everybody lives by selling something.
Author: Sue Barrett, MD of barrett.com.au a Sales Training firm.

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Setting the sales agenda

February 17, 2011 in Prospecting, Sales Planning

If you or anyone in your team is struggling to open a client meeting effectively or if you feel awkward and lost for words, and your client or prospect is shifting in their seat, then you need an agenda.

One of the best ways you can kick off a client meeting is with an agenda.  An agenda guides you, keeps you and your client on track and lets everyone know what the client meeting is about.  Does this mean you stick to the agenda all the way?  Well, probably not, because with any agenda things can change.

However, beginning with a clear agenda is a good place to start.

So how do you go about setting up an agenda with a client or prospect?

It all begins with the telephone call you make to your client or prospect about your intention to arrange an appointment with them in the first place.  What is your reason for calling them?  Is it to arrange an account review, or is it a new prospect call to meet and introduce yourself as a potential business partner, or is it something else?

How clear you are about why you are making contact with a prospect or client is critical to getting off on the right foot.  Having a Valid Business Reason to call a client or prospect gives you the support you need when prospecting and positioning yourself to get a meeting.  This initial contact will then determine your meeting agenda.  So, assuming you have a meeting booked with your client or prospect and assuming that you stated clearly why you wanted to meet them and assuming they have agreed to meet with you and could see something in it for them, you are now in a position to create an agenda.

What should you put in the agenda?

Think about the following questions and they will give you the answers you seek:

  • What do we (client and ourselves) want to get out of the client meeting?
  • How long will the meeting take?
  • Who needs to be in attendance?
  • Who will be in attendance?
  • What will be discussed in principle?
  • What type of client meeting is it?
    • New prospect meeting/initial meeting
    • Presentation of a proposal or tender
    • Account review
    • Win back meeting for a lapsed or lost account
  • What are the desired outcomes for both parties?

Sending an email with bullet points outlining your agenda two days before the scheduled meeting is usually good business protocol especially for a straight forward client/prospect meeting.  However, you may like to type up a document for more complex meetings and send it out sooner so they have time to read over it and consider any items before you meet; it all depends on what you want to achieve.

Excellence in your work, at any level, comes from purposeful action.  What is your intention, your purpose or your goal?  An agenda is about establishing an intention, a purpose. It’s about making it clear for all concerned.  Winston Churchill once said “if you don’t know where you are going, then every road will lead you nowhere”.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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Are your sales people at risk of leaving?

January 5, 2011 in Recruitment, Sales Planning, Strategy

How many of your sales people are thinking about a career move right now?

How many of them have come back from their holiday break wondering if they are in the right role or company?

Sales people are one of the highest “at risk” groups in terms of turnover (average of 26% compared to the national average of 14%).  Some industries have sales staff turnover up into the 70-80% range i.e. high churn call centres.

Some of the reasons sales people give in their notice is because:

  • they have not had the success they had hoped to achieve and have not attained their financial goals,
  • their capabilities did not match the job,
  • they are not getting adequate support by way of clear goals and direction, adequate product training and/or sales management support,
  • they feel discontented, and what was promised by the company was not the reality they came to know,
  • they are burnout through not having enough holidays (especially true for high performers),
  • poor leadership and poorly executed strategy have left them feeling disengaged and frustrated, or
  • they do not feel suited to a sales career.

High sales staff turnover is a costly problem.  Having sales staff on a company conveyor belt can lead to poor customer perceptions, poor service and the erosion of your brand.  This can further impair your recruitment of good staff and make it even more difficult to find good sales people.  Therefore, it makes good sense to manage this risk, maximise alignment and legitimise and protect an investment in sales performance improvement.

So how do we reduce high sales staff turnover?

One significant way is to improve Job Match.  Job Match is about clearly understanding what the job requires and what type of person best matches that job, then matching the job and the person as accurately and closely as possible.  This means not putting ‘just anyone’ into the job.  However, many people do so out of desperation but that desperation has costly consequences as you will see.

A significant study reported by Harvard Business Review showed how Job Match significantly affects staff turnover in sales teams.  The study looked at traditional ‘high turnover’ industries as well as traditional ‘low turnover’ industries. They compared sales staff turnover when Job Match was used and when it was not used.

Here are the findings:

HIGH Turnover Industry – Sample Size: 13,102

People with Job Match:
- % who quit or were fired after 6 months = 24%
- % who quit or were fired after 14 months = 28%

People without Job Match:
- % who quit or were fired after 6 months = 46%
- % who quit or were fired after 14 months = 57%

LOW Turnover Industry – Sample Size: 5,941

People with Job Match:
- % who quit or were fired after 6 months = 5%
- % who quit or were fired after 14 months = 8%

People without Job Match:
- % who quit or were fired after 6 months = 25%
- % who quit or were fired after 14 months = 34%

You can see quite clearly that using Job Match has a significant impact on sales staff turnover.  Job Match also affects job satisfaction and engagement.  For instance, job satisfaction and engagement (i.e. workforce alignment) can account for up to 23% difference in productivity.

Besides Job Match, what else can you do to ensure healthy sales staff retention?

Sales is a particularly challenging career.  In practically, in no other profession are mistakes or a lack of aptitude punished so mercilessly as in sales.  A deal is either concluded or not – there is no such thing as partial success.

In short, select wisely and help your people lead healthy sales careers.  This way you may reduce unnecessary sales staff turnover, have a healthier sales business and much happier sales people.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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