Author: Chris Rodowicz | Reading Time: 6-7 minutes
The accepted truth in the world of sales and selling is that understanding why customers buy is the most important aspect of any B2B sales engagement. But there is another dimension just as important to understand and that is HOW customers buy.
Stopping at the “why” part of the journey can have unexpected outcomes. Sales cycles can appear random in length. Your marketing efforts get little traction. You are losing sales you should be winning and / or your strong sales team deliver inconsistent results. If any of these sound familiar then read on to begin to figure out how to fix these problems.
This article introduces you to the simple but immensely powerful concept of customer Buying Styles.
Fly Fishing as it relates to sales
In summary, the majority of fly fishing is about preparation with a deep understanding of what the fish wants, why they want it and HOW they are going to bite it before you ever cast a line. Ian asserts that spending valuable time and resources with the wrong offering, tools or the wrong approach just frustrates your customers. You need to be like the canny fly fisher and start by knowing your customer better then they know themselves.
What does this mean to your business?
The goal is first to understand your customers as well as the most successful fly fisher folk know their fish. Then you can get really good at delivering exactly what they want when they need it. As Ian would put it, before you go off and deploy 10 people along the riverbank with all the latest fancy gear, if they have no idea HOW those fish are going to bite, you won’t catch any more fish.
How do I make this work for us?
The answer is that although your customers may appear different in that they sell different products, they’re different sizes or they may sell into different geographies, in two extremely important ways they are not as different as they might appear.
Firstly, the way the people in the company will act when they engage to buy. And secondly, the process the company will go through in order to buy. This means that how they act can be understood, regardless of how different they may be as companies.
And if you can understand how the company is going to act, you can then prepare in exactly in the same way as the successful fly fisherman. How you engage and provide them with information is now driven by and aligned with how they behave.
What’s the impact on my performance?
If you can do that you’ll improve profitability and grow your revenues. Importantly you’ll also improve your customer’s experience because it will seem to them as though you are acting just how they want you to act, almost before they’re aware of it, so you’ll win both ways.
If you categorise your customers’ buying behaviour into what we call a “Buying Style” you can begin to understand how they buy and then start to align yourself with them and sell more.
How the customer perceives the value you bring to their business is what drives how they buy. For simplicity sake we will say that value to the customer is either increasing their revenue or decreasing costs or some combination of both.
The Buying Style is all about how the entire customer organisation defines, creates, adds and delivers value to itself and its customers and how it engages with sellers like you to help it do that. The buying process is a subset of this and also needs to be understood. This will be covered in a follow up article.
Determining the Buying Style for your customer
Here’s 2 simple steps to help you with this.
- Ask yourself this question before you engage with your customers
“does the customer understand their problem or opportunity?”
The answer can only be yes, or no. The answer helps you determine what Buying Style this customer is exhibiting.
- Now determine your value, as measured in the customer’s frame of reference. It needs to be something you can readily identify and relate your proposition to. Remember it will be one of two things; increased revenue/profits or reduced operating cost.
What are the 3 different Buying Styles?
Let’s take a look at the three Buying Styles, explain what they are and how they relate to the answer from that question “does the customer understand the problem or opportunity?”.
When the answer is yes, the customer understands the problem or opportunity.
There are 2 possible Buying Styles out of the 3 that arise from this answer. The Buying Style that you see depends on the degree to which the problem is understood by the customer.
The first one comes about when they don’t need to work out what the solution is – they already know what they want. They almost certainly know who supplies the solution and may well have a list of “approved” suppliers. They will probably have a standard specification for the item/system/service to be acquired, an expectation of what it costs and know when they want it. Most of the engagement, therefore, is through the procurement function as they have done it all before.
1. This is “Value Offered” (VO)
Vendors who work with this type of customer often have a list of fairly standard products available on a website or catalogue, they may hold stock and can deliver quickly. If your product meets the spec and the customer can get a good price as well as the quantity when he needs it, you will be considered. You “offer” your product to the market which is well established and understood.
To be successful when the customer operates in a VO style means you have to get very good at it because it is normally a low margin, high volume market. Think of office products or engineering consumables where a few percentage points is all that separates one supplier from another. In addition to being razor-sharp in your pricing and delivery, you also have to make the buying experience as easy and friction free as possible.
For the second possible style, the customer can describe the symptoms of the problem or opportunity and may have some idea as to how to approach either. They might have also done some research to identify potential providers of an as yet to be defined solution.
2. This is “Valued Added” (VA)
This is a common one for B2B sales but unlike the VO customer, they can’t just buy a shrink-wrapped box off the shelf from any one of five providers and slot it into their operations without even thinking about it. They need to engage with the suppliers. This time the starting point is not procurement; it tends to be with the business people who actually have the problem.
Your job is now to really understand that problem/opportunity, what the value to them of fixing it really is, and very importantly, who in the customer’s organisation cares enough about the solution to push it through.
This is more complex than the VO situation. There are more stakeholders and issues to grapple with. There are more resources within your own company that need to align, collaborate and co-operate with each other and with the relevant people in the customer’s organisation.
When the answer is No, the customer does NOT understand the problem or opportunity.
For this situation, the customer doesn’t even know there is a problem or opportunity yet! You have to firstly identify a hidden problem or opportunity the customer has not yet seen (but may be feeling).
3. Welcome to the world of “Value Created” (VC)
Adapting your business to a VC customer requires a very different approach, very different skills and a very different outcome from either VO or VA. Because the customer doesn’t yet see a problem or opportunity, they can’t quantify any value. You have to help them create it. At this stage, they will not be thinking about a solution or a product that you might have so you can’t “sell” them one.
The discussion you have is about their business, not your product or solution. That discussion takes place with their senior executives as they are the ones who determine the direction of the business and who would have to approve any investment that impacts it.
To be successful in the VC style you need people who can engage with authority and credibility at a senior executive level. People who speak the language of business and the boardroom, not product features and benefits. A VC customer is not going to decide overnight as any investment they might eventually agree to is not even budgeted for. So, you need to think longer term. But also think orders of magnitude larger in terms of revenue.
It is not an incremental difference your solution makes, it is a major step-change, maybe even a move into a completely new market or a top to bottom reorganisation that gives them an exponential improvement in performance, revenue or market share.
VC is challenging and not for the faint-hearted or the under-prepared.
But get it right, and you will reap large rewards by creating value for your customers they can only dream of.
Buying Styles apply to many scenarios
The concept of Buying Styles is not a “one-approach-fits-all” magic bullet. You have to consider what Buying Style you are dealing with across different markets, different products and even sometimes within the same customer then adjust your approach to suit. The common thread here is the way businesses make decisions.
These businesses are run by people acting collectively to drive the business forward. People in the same market are likely to have similar experiences and understanding in terms of problems, opportunities, issues, products, services, solutions. Therefore they are likely to have a similar perspective on different products and so exhibit similar Buying Styles.
However, even a one-product company selling into different markets will realise that each market may have a different level of maturity and understanding with regard to their product. This means each market’s Buying Style will be different and therefore you have to adjust your strategy accordingly.
The old product-centric selling style does not allow for this which is why companies selling across different markets, even with the same product, need to adapt their approach to align with how the customers buy in that market.
The key outcome here is that whilst a change in your strategy to aligning to customer Buying Styles is vitally important, you need to remain flexible and agile enough to adapt to different Buying Styles in markets that are at different levels of maturity in relation to what you are selling.
What does this all mean for you?
The obvious implication is you have to change the way you sell if it does not align to the way your customers buy.
Here are some benefits of getting it right.
- Customer experience will improve greatly
- Your sales process will be much more efficient
- Create more opportunities at higher revenue
- Reduce friction for both you and your customer
- Reduce risk as you will stop chasing poor quality deals
- Make much better investment decisions (such as building your new sales style)
- Growth will improve and become more consistent
- You will be able to more effectively develop new markets
If you want to understand how to apply the key steps then please follow this link to download our eBook titled “Accelerate your sales cycles by understanding HOW your customers buy” which explains step by step what you can start doing today to align your business with your customers’ so you can win more business easier.