Author: Ian Meharg | Reading Time: 5-6 minutes
In 2 previous articles my colleague Chris Rodowicz explored customer Buying Styles and the customer Buying Process IMPACT. Those articles are a great introduction to this article because they reveal why B2B customers do what they do when you are trying to ‘sell’ to them.
Innovation has changed
Many companies have realised that to keep ahead of their competitors they need to tap into the vast resource of experience and knowledge that lies within their employee base. At first, a vague sort of lip service was paid to this with the ubiquitous “suggestion box scheme” which usually consisted of a box for postcards in the staff canteen. Which were then discarded with only the occasional nugget being considered.
Today, the entire concept of turning ideas into business value has been turned on its head by forward-thinking organisations. It is now a well-managed process and seen as essential to their future success and prosperity.
Ideation – the modern day approach
Some Americans coined the phrase “Ideation” to describe this internal funnel where all kinds of proposals, from anyone in the company, were fed into the ideas “hopper” – which usually was a software tool designed for the task. These were then assessed against a well-defined set of criteria and then progressed to a point where those that had the greatest business impact or return on investment (ROI) could be turned into reality.
There are 3 significant differences between this modern approach and the old ways. Firstly, it is transparent. You get feedback if your idea proceeds and also if it doesn’t. You feel part of it so you’re more likely to participate. Secondly, there are often rewards for the successful ones – and not just a bottle of cheap fizz.
However, the biggest difference is in the way the Ideation process is managed and who supports it. The concepts and technologies that are widely employed to manage large project portfolios (PPM) have now been extended to the pre-selection stages where embryonic ideas start to take shape. And the process is supported and often driven by the CEO and their inner circle team.
Some organisations have even extended this concept beyond their own doors and out to their customers. Starbucks, for example, collects customer input as to what drinks they prefer at certain times of the year, and then offers them right down to the specific location. Some car manufacturers also reach out to customers to help them determine what features should be in new models. Audi even captures input from the social media used by people who respond to adverts.
How does this apply to B2B sales?
This is best illustrated by the diagram below which illustrates a typical “Ideation” process. It shows the various sources of ideas coming into the “funnel” on the left. They then progress through the different stages of assessment until they produce a business outcome with a measurable ROI on the right. When they become no longer relevant they are retired but the value created is captured throughout the lifetime of the idea.
So why is this relevant and indeed vital to your B2B sales pipeline?
B2B Buying Styles
We talk about business customers exhibiting different ‘Buying Styles’ when they are procuring any product or service from the market. Depending on how well they understand their problem AND how well they understand the solutions available to them determines what Buying Style they exhibit.
The very existence of such processes and approaches inside businesses usually comes as a surprise to the majority of salespeople. Typically, salespeople tend to become engaged only when the need reaches the develop stage – in other words, the customer is now seeking a solution to a problem which a B2B seller might be able to provide.
This equates to the “Value Added” buying style and the “C” stage of what we call the IMPACT buying process below. The customer understands the problem or opportunity and they understand there are solutions out there for them but they differ to certain degrees in areas where it is important to them, their ‘value spot’ if I can call it that.
But when the customer doesn’t have that understanding and has not yet reached the point at which they are developing a solution, say before the Business gate in the Ideation funnel diagram above and maybe even the Idea gate, how can you as a supplier tap into it if you don’t know about it?
It was a former US Secretary for Defence who spoke of known unknowns. In other words the things you know you don’t know. Any salesperson worth his paygrade should be aware that businesses make investment decisions in predictable, measured and consistent ways. You might not know precisely how but you know they do it. Your first step is to find out.
The Ideation funnel diagram above will help you because you can start to see the different steps in action when you look in the right places. And if you don’t know where to look there is a great technique in the sales kitbag that will help you to, ASK!! And if the diagram doesn’t click with you, then the IMPACT process should.
This acronym describes the stages of investment decision making within a customer business as they relate to a B2B sales team. We’ve referred to IMPACT before as the “Buying Process” and the point at which you engage with it depends on the customer’s Buying Style. You can determine the Buying Style from the answer to the question “does the customer really understand their problem or opportunity?”. In the case where the answer is “no,” we explain that this is because they are still working through the parts of the decision-making process that are INTERNAL – in other words, the ones that sit before the business gate in the Ideation funnel.
When translated into the buying process IMPACT these are defined as:
- I = Identify, the problem or the Idea for an opportunity
- M = Mentor, the person who will take initial ownership of the problem or idea to progress it but not publicly
- P = Position, where the Mentor positions the problem or opportunity to a project sponsor, someone who can find resources and funding to execute the project
- A = Assess, which is done more formally against various criteria to determine if it is truly viable with a solid return on investment (ROI)
- C = Case, where the business case is made to take the idea or problem to the outside world in order to find solutions
- T = Transaction, which is the procurement of the solution or the means to implement the idea
Many of these stages directly align with the Ideation process and so it should be reasonable to deduce that if you understand how your prospect is managing their innovation process, you will be very close to the buying process too and the chance to be part of that at a much earlier stage than ever before. For more explanation about IMPACT, the customer Buying Process, you can go here.
Turning this into cash
Sounds wonderful, doesn’t it? But you have to do some work to get there! The final link in the chain is engaging further up in the funnel where you have a greater chance to influence the outcome of any decision in your favour. After all nothing is set in stone at this point, they are just mulling over ideas that either solve a problem or may present an opportunity.
The name we give to the Buying Style in this particular set of circumstances is “Value Created”. This simply means that YOU are now an integral part of the value chain for the customer. You may even find yourself driving it. But you must align your Sales Style to the customer Buying Style. You won’t be able to sell a “product” at this point as the customer still doesn’t really know what he needs or even if he needs anything. Especially from a product supplier so you have to behave not like a salesperson but like a trusted advisor, business partner or collaborator.
Why? Because at the very earliest stages it is not clear what the value is either from fixing the problem or exploiting the opportunity. Consequently, your entire approach from the language you use to the level of people you engage with will be very different compared to the more common situation where you only start to deal with the customer once the business case has been created. This approach does not really fit within the role of a typical salesperson.
How hard can it be?
There is a degree of difficulty in applying this Value Created Sales Style compared to the more common and better understood “Value Added” style we have described elsewhere. Value Created requires a very different mindset and skill set. But it’s also clear that once you are part of their value creation process you will be identified as bringing value to the prospect in many different ways that others who engage late simply cannot do.
This method takes longer but the rewards are greater because you are less likely to fail when the value you can bring is so significant to the customer. In fact when done well your win ratio will be getting close to 100% on these deals. And you are much less likely to encounter competition because their solution will be built around YOU.
One thing to be aware of though is that you must begin qualifying these deals early on and keep qualifying at each stage or gate to be sure that what you offer is indeed appropriate to the situation. You won’t be successful if the problem only costs the prospect $10,000 a year but your solution will cost them $100,000, so you need to be very good and disciplined at qualifying out of engagements that are not a good fit for you and doubling down on those that are right for you.
Rationalising the supply chain
Many corporations are actively seeking to reduce the number of suppliers they have to deal with. They are starting to bypass supplier salespeople who only talk about product and deals. In the very near future if not today those who will succeed are the ones who can work in close collaboration with the customer. They will, over time, become trusted and valued contributors to the decision making and secure a greater and greater share of the spoils.