As any long-in-the-tooth B2B sales rep will tell you, their job has become harder in the past decade. Sales teams have faced pressure from business customers to reduce the range of options and services they offer and to often compete with other firms purely on the price they charge.
Although this may sound like free-market economics at work, complex B2B products can often help customers more than they realize and, if they come with a set idea of the “solution” they want or, worse, aren’t able to agree among themselves on what they need from a particular supplier, it is likely they will end up with the most conservative option at the lowest cost.
And this often means that any “return” they see on their spending with a vendor will not be nearly as useful as if they took some time to engage with a supplier and learn from them what will solve a particular business problem, be it anything from improved information security to a more effective just-in-time supply chain.
These types of problems stem far less from suppliers’ inability to sell effectively and far more from customers’ inability to buy effectively. Their buying problem is based on five important trends.
All should make B2B reps feel a little better about why their jobs have got so much harder recently and, crucially, how they can make-up some of that lost ground.
Today’s purchases are made by large groups of disparate colleagues with diverse goals and interests: The average B2B decision-making group includes 5.4 buyers. The challenge of this is not just the greater number of stakeholders, but also the increased diversity of stakeholders – often multiple departments, geographies, and varying levels of seniority are involved.
Diverse stakeholders representing different areas of the business have their own agendas, beliefs, and assumptions (sometimes conflicting ones) that makes it hard for the buying group to reach consensus and progress through the purchase.
Customers engage suppliers relatively late in the purchase process: The average purchase decision is 57% complete, and more than 10 information sources have been consulted, by the time customers engage with suppliers. Alarmingly, the higher the purchase complexity, the later customers engage suppliers.
Buying cycles take far longer than customers expect: An overabundance of information, people, and options have a direct impact on sales cycle length. 84% of respondents on a CEB customer panel reported that their buying cycle was longer than expected relative to their initial estimates.
On average, the actual purchase length took 97% longer than they initially expected. In fact, by the time they were making their first contact with suppliers, many customers had expected the entire purchase process to already be over.
Overwhelmed with too much information and too many options, customers often regret their purchase decision (and punish the supplier): Too much information paralyzes decision making, too many stakeholders cause the buying group to settle for a “good enough” solution, and too many options raise the opportunity cost of solutions.
The result is an overwhelming purchase experience for customers, which dramatically increases the likelihood of purchase regret. In turn, this regret harms both customer loyalty and advocacy, with customers being 14% less loyal and 53% more likely to advocate against the supplier they’ve just chosen.
Customers want to be made smarter in their sales interactions. CEB research showed that 53% of customer loyalty is driven by a salesperson’s ability to deliver unique insight to the customer.
Ultimately, customers reward reps who can teach them something new and unique about their business.
This problem with buying presents a good opportunity for suppliers to simplify the customer’s experience, and at the same time close the deal. In fact, CEB analysis shows that organizations that succeed at making buying easier realize a 62% higher likelihood of converting a high-quality, sale that will boost the seller’s margins.
For more on this work, see “How to Motivate Buyers to Win Group Purchases”.