The B2B Buying Cycle and How to Influence it, pt 2
This article is the third in a series of articles on aligning marketing and sales with buying behavior and it will be of value to sales and marketing professionals who wish to adapt their process to align with buyer behavior.
The first article in the series, "A Guide to Aligning Marketing & Sales Engagement with Buying Process"
discussed buyer behavior and how it is affected by risk. Last week's article, The B2B Buying Cycle and How to Influence it, pt. 1
is an in-depth review of the formative stages in the buying process and the role of sales and marketing in early adopter engagement as well as the risks to the supplier.
Phase 4: Assessment
Congratulations, you made it through Position,
the graveyard of most opportunities. Chances are you are well on your way to a sale to an important new customer, but don't put the champagne in the fridge yet, it could be months before a formal transaction.
phase is a necessary step in a post Enron-world and the era of corporate accountability to satisfy that due diligence is carried out, compliance issues are met and risks are properly considered.
In the assessment phase the organization is weighing both the upside and the risks in implementing early stage technology. Qualitative and quantitative performance information is sought, as well as assessment of upside, risks, plus all costs. Assessment involves assembly of a project team, proof of concept or pilot to create evidence & gather data.
Role for Marketing
I asked John McTigue from Kuno Creative
to contribute the three marketing segments on this blog as they are engaged with a number of current customers on exactly these deliverables.
Marketing automation is more than sending an email to a list of buying stakeholders and tracking form submissions. It starts with aligning your sales and marketing teams so that they are on the same page with respect to:
- Understanding the sales funnel concept and how it aligns with buying-cycle stages,
- Understanding the demand generation and lead nurturing process,
- Agreeing to criteria for buy-cycle stages, including lead scoring thresholds and sales-ready events and triggers,
- Understanding and agreeing to the definition of a sales qualified lead and handoff between marketing and sales with respect to criteria and CRM integration,
- Feedback (or closed loop marketing) to the marketing automation system (and team) based on sales engagements and status updates,
Role for Sales
- Work with mentor/champion/buyer to implement a sequence of events for the assessment/evaluation,
- Support the proof of concept; where possible, seek to influence the construction of the assessment,
- Work internally within the supplier organization to support the assessment and provide technical support resources,
- Do not commence an assessment unless you know what the outcome of a successful evaluation will be.
Risks for Sales
- Pilot or proof of concept not properly specified or outcomes unclear,
- Internal adversaries influence the assessment criteria to make it hard for the supplier to succeed,
- The product doesn't work or deliver the anticipated result. (When this happens, it may be time to find another job.)
- The sales team needs to lead the client "let me share with you our process that has helped others make the transition...".
- Influence the construction of the assessment.
- Get your best minds focused on this vital task.
- An assessment takes time, effort and resources and exposes the supplier to considerable risk.
Do not start an assessment until you know what the outcome will be if your trial is successful.
Phase 5: Case
phase converts the Assessment into a project to acquire the product or solution.
The case phase involves creation of a formal business case, assignment of internal resources and budget.
- Uses the output of the Assessment phase,
- Possibly includes analysis of alternative solutions to arrive at final cost estimates and an ROI,
- Likely to use 3rd party analyst data if available and independent comparisons of vendors and costs
- In this phase, the Case is pushed back and forth between the mentor and the sponsor (champion) until the sponsor is happy all relevant business and political goals are served.
- Budget is applied and the acquisition made public to potential suppliers.
- The buyer may issue an Invitation to Tender (ITT) or Request for Proposal (RFP) to satisfy purchasing rules. At this stage the case could be passed to purchasing to formally engage suppliers in the procurement process
Role for Marketing
Marketing's role is to assist the buyer in their journey towards becoming a customer.
- It starts with buyer persona and messaging that addresses buyers directly at each stage in their personal decision process.
- Demand generation campaigns tuned to buyer needs at the beginning of the journey (top of the sales funnel) attract new leads that are pre-qualified by virtue of targeting and messaging.
- Lead nurturing campaigns keep potential buyers engaged and help them to become introduced to your products and services at their own pace.
- Calls to action at each step in the lead nurturing chain enable buyers to move forward when they are ready.
- Marketing is responsible for creating the content that maps to each buyer persona and decision stage and for developing marketing automation workflows for demand generation and lead nurturing campaigns.
- Ideally, sales and marketing work together to define lead scoring criteria for buyer behavior and to develop workflows for managing leads and handing them off to sales reps when they are ripe for purchase via CRM.
Role for Sales
- Set the agenda for the RFP/ITT or expectations/outcomes in a Term-Sheet, or Memorandum of Understanding (MOU) if the transaction is informal.
- Working through the needs analysis with the client and understanding the issues, goals and concerns of each constituent in the buying group.
- Generate business support for the Case by demonstrating (if appropriate), that your product can help them achieve goals and overcome these issues.
- Providing assistance with cost/Return On Investment (ROI) models.
- Provide relevant examples and proof points via case studies and where appropriate, through reference calls with satisfied customers.
- Use briefing books, white-papers, Webinars and presentations to circulate ideas
- Insufficient executive sponsorship (salespeople have only one key player on their team and their champion leaves).
- A late-coming competitor engages internally though their champion and cleverly changes the ground rules at the executive level.
- You receive an inbound inquiry asking for information on your products, and pricing. There is a sense of urgency and the buyer is not sharing with you all of their issues.
- Meeting key stakeholders involved in the decision is mandatory,
- Fight the battle on your terrain, fight to influence the assessment and the outcome of a successful business case,
- Beware of the Inbound Inquiry with a short time to respond; you may be invited to compete to make up the numbers in a deal where your competition has been working for months to set the agenda and you are being invited along for the ride.
Phase 6: Transaction
The transaction phase confirms project details to all internal and external stakeholders. Procurement may become involved for a formal acquisition.
This could require competitive tendering, a short-listing of possible vendors, demonstrations and selection committees, the conclusion of which will be the award of the contract to the successful supplier.
Role for Marketing
In the final stages of the buy cycle, marketing also plays an important role in providing Sales with the lead intelligence and content they need to overcome objections and close the sale.
Bottom funnel content such as case studies and video testimonials can help to sway buyers on the fence, and lead behavior monitoring can signal their intentions to the sales team so that they can prepare the most effective approach to closing.
Once the sale is finalized, feedback from buyers as well as sales reps arms the Marketing team with valuable information for reaching new leads and nurturing them throughout the buyer cycle.
Role for Sales
- Close the sale at the best possible price. If the answers to the following two questions are not yes and yes, do not begin to negotiate price.
1. Are we the chosen vendor?
2. Is price the only remaining obstacle to doing business?
(Customer Centric Selling, Bosworth and Holland)
- Execute a Sequence of Events where the outcome is an order on completion of a successful assessment and business case.
- Salespeople should strive to time the order outcome other than at the end of quarter.
- Insufficient Stakeholder coverage results in your offering being marginalized by vendors aligned with more powerful executive team members,
- You get outflanked by a competitor who has blind-sided you and cleverly changed the ground-rules of the evaluation,
- Your champion or executive sponsor leaves or is transferred,
- A late-coming competitor drops their price through the floor and the client uses this as a lever to get big discounts,
- The buyer delays the transaction until the end of quarter and engages the purchasing team who are trained in negotiating pricing concessions and compensated on reducing vendor margins,
- There is an announcement that the company is making a strategic acquisition or is being sold or merged. (Not much you can do about this one - usually means a minimum of 6 months before the opportunity will be revisited - if ever; - back to the drawing board.)
- Use a project plan or sequence of events which is timed to conclude in an order, other than at the end of quarter,
- Ensuring you have met with, understand and to the extent possible, satisfy the needs of key stakeholders,
- Keep your mentors and champions involved in the machinery of the purchasing process; this is particularly important if you have proven a business case, established ROI and the purchasing team is being very aggressive in their negotiation stance,
- Be prepared to stand your ground against professional purchasing teams; call in your champion,
- Be prepared to walk if you cannot close the transaction on acceptable terms.