There’s been plenty of talk and insightful learning’s on selling in the B2C segment. Sadly, getting new customers in the B2B segment has largely been left out. I shall in this post, try to cover some of the key concepts in the B2B segment and how they are different from the B2C segment.
A traditional B2C selling environment, in the physical world largely deals with excelling the following principles:
M – Make an eye contact
A – As intuitive questions
G – Give feedback and suggestions
I – Inspire the customer
C – Congratulate the customer
However, a B2B environment is more complex. Thus one needs to study the B2B segment in much depth. To begin with, B2B sales can be largely classified in to the following sections.
a) Whom to pursue?
- Opportunity Analysis
- Understanding Processes
b) How to convert? – Breaking customer status-quo bias of the customer
Now, let us look at each of these sections in depth. To start with, B2B sales by its traditional definition is the conversion of a lead in to a customer. Alternatively, a sale can also be represented in the form of an equation:
Sales = Exposure X Hit Rate
Exposure = Pipeline of prospective customers, who we would like to pursue
Hit Rate = How do we convert these prospective customers in to actual customers
In any sales process, the emphasizes is on the process of selling and value add to the customer and not just the end product or service. In conclusion, it is how we sell that increases the value of what we sell. Furthermore, the sales process has transitioned over time. Firstly, during the early 1900, sales process was transactional. Consequently, in the 1970-80 it became consultative. Further, in the late 70’s outcome based selling became popular. Finally in the millennium, strategic insight based sales became popular.
Any sales process can be broadly classified to answer the following two questions:
Whom to pursue and How to convert?
a) Whom to pursue?
This section covers all the steps to help us identify and target prospective customers. The process is broken as follows:
1. Opportunity Analysis:
Opportunity analysis begins with quantifying, where the top management sets a goal for the organization. An Ansoff matrix may be used to decide the same.
|New Customer||Existing Customer|
In this stage, the management decides as to how many and what type of customers i.e. new and existing customers the sales team must pursue.
The new customers are studied on the basis of win / loss analysis. Also, we evaluate the customers on location, financial condition, funding, time frame, customer competency, driving mechanism, repeat business, potential, strategic marketing value.
Based on the analysis these customers are classified as ideal, ok or walkaway.
The existing customer, on the other hand are evaluated on the basis of best / worst analysis. Criteria’s like volume, margin and past payment records are studied to make a judgement.
Once target customers are narrowed down, self-competency evaluation is done based on parameters like solution compatibility, installed base or presence and philosophical compatibility with the customers.
1.3 Generate Demand
Demand generation can be done as follows
P – Publications (Electronic, Print)
E – Events (Conduct, Participate)
N – News items
C – Corporate citizen
I – Image
L – Lobbying
S – Sponsorship
We can extend these activities to both the physical and the digital world. This is where the concepts of marketing take effect.
Lastly a customer should be qualified based on his or her budget, authority, need and time frame.
2. Understanding Processes
At this stage, we need to focus on two very important aspects about decision making.
2.1 Decision Making Process
In this step we identify parameters like the net promoters score, risk taking appetite of customer, value proposition parameters, buy cycle and action forcing events for the customer.
2.2 Decision Making Unit
In this step, we identify the key people from among the customer who have the power, authority and money to make decisions. Sales team needs to keep a constant track of any changes in power and authority among the members of the decision-making unit.
The sales mindset is spread across the following 3 parts:
3.1 Recognition of needs – Create Value
In this phase as a sales consultant we need to work towards uncovering unmet customer needs. A world class sales organization would
- proactively seek opportunities triggered by changes over time
- work with the customer to uncover and develop the needs; i.e customer co-creation
- influence the needs of the customers, so that they closely match their solutions
A very effective tool to uncover different levels of customer needs is to use the pain chain. Following is a representation of a pain chain.
|CEO||To increase shareholders value|
|CFO||To increase operating margins|
|COO||To reduce the cycle time|
To understand the customer problems sales personnel should ask situation, problem, implication and need payoff questions to the customer.
3.2 Evaluation of options – Communicate Value
In this stage, we uncover the customer needs and; communicate them to the right audience. Key points to consider are as follows.
- identifying all the key stakeholders and the decision-making process
- conducting competitive analysis
- reinforcing criteria, we can meet
- produce a persuasive proposal based on customer needs
3.3 Recognition of concerns – Capture Value
In this stage, we address the customer concerns on the presented proposal. Key points to consider are as follows.
- identifying potential concerns early and pre-handling them
- recognizing and acknowledging concerns that do exist and helping the customer resolve them.
b) How to convert?
Breaking customer status-quo bias
Customer team members often don’t agree on the need for a change. In such situations sales engagements hit a road block. It is crucial to identifying such bias and handle them with agility.
Preference Stability: Understanding the customer’s current preferences and destabilizing them is a key activity.
Cost of Action Change: Often, the cost of staying the same is greater than the cost of a change. Thus, in such situations the customer needs to be made aware of the costs of staying same and opportunity cost.
Selection Difficulty: Create a contrast between the as is and to be process and show the same to the customer. Such a difference would help in understanding the need for a change.
Anticipate Regret / Blame: Use a before and after hero story to inspire customers. This will help customers to actively pursue changes.
Thus, with these fundamentals, one can better handle the B2B sales cycle. Industry specific studies would further help to achieve sales. In order to gain more insights, further readings can be done from the below mentioned sources, where concepts are explained in depth.
- HBR Article R1702J: The New Sales Imperative – https://hbr.org/product/hbr-s-10-must-reads-2017-the-definitive-management-ideas-of-the-year-from-harvard-business-review-with-bonus-article-what-is-disruptive-innovation/10064E-KND-ENG
- Developing sales effectiveness – Huthwaite International