“Don’t let a good crisis go to waste” is today applied to economic or diplomatic crises that can be exploited to advance political agendas. However, the original quote as found in the Yale Book of Modern Proverbs, can be traced back to 1976 (sorry, Churchill did not say it first), when M. F. Weiner wrote an article in the journal Medical Economics entitled “Don’t Waste a Crisis — Your Patient’s or Your Own.” Weiner meant that a medical crisis can be used to improve aspects of mental health, daily habits or lifestyle – for both parties.
This is the proper context for this post. How can the current COVID-19 crisis be used to improve the interactions and business results for both B2B Buyers and Sellers? Studying this “deceptive dance” from both sides for over 20 years in my consulting practice, I have often been frustrated by how much time, effort, and potential value is routinely squandered by both sides – resulting in very poor deals for one or both parties. Why does it have to be this way?
B2B Buying & Selling Was Already Broken
Gartner reports that 77% of B2B buyers agree that purchases have become very complex and difficult. As a result, 46% of B2B buying cycles are 7 months or longer according to CSO Insights – and both numbers are increasing. An astounding 43% of the time, official buying initiatives are either cancelled or result in “do nothing,” which is a huge impact on productivity (Forrester). This was before COVID-19! Is this successful buying?
Sellers were faring no better. Salesforce.com reported that 57% of sales reps would miss quota in 2019 (I’ve found no data on the final tally). Why? For a start, 66% of the time buyers see little to no differentiationbetween proposed supplier offerings (Aberdeen Group). Buying executives find interactions with sales reps to be valuable less than 12% of the time (Forrester). In the technology space, IT projects on average run 45 percent over budget, while delivering 56 percent less business value than promised (McKinsey). The #1 reason is an unclear focus on objectives and outcomes. Is this successful selling?
Companies need products and services they purchase from other businesses in order to advance their business strategy. Other businesses need to sell their products and services to those companies because it is their reason for existing. In short, both sides need each other! Yet, looking at the dismal results one can only conclude this system is broken. At the risk of offending everyone, I believe the blame is equally shared by both Buyers and Sellers.
Necessity & Agility Breed A Ray Of Hope
Today, both sides are responding to sudden and often dramatic shifts in business priorities and budgets due to COVID-19. And the need to act is now – even though the interactions must be conducted virtually. Encouragingly, I have seen and read about a greater focus on outcomes (value), collaboration, and transparency in many of these business dealings. Where these principles characterize the buying and selling process, critical deals are quickly closed that result in good deals for both parties.
Let’s hope the momentum in this direction and the lessons learned continue, but I am skeptical. Ingrained habits (it’s the way we’ve always done it) and unrestrained processes (with entrenched vested interests) die hard. Let’s explore why these three principles are a good place to start changing the buying and selling dynamics.
It’s The Outcomes (Value) Stupid!
No business willingly spends money unless it expects to achieve different and (hopefully) better outcomes. That’s what a business buys… period. But both sides tend to devote significantly more time on what sellers are selling (products and services) and what buyers are paying for (the same products and services) – without either side having a clear picture of the desired outcomes! What are the odds this ends well?
Buyers: If you’re not clear on the outcomes you want to achieve (What, How Much, and When), then job #1 is to get internally aligned and crystal clear with your supplier. If you’re not certain what is possible, then collaborate with the supplier. You might be pleasantly surprised what they can help you accomplish. After all, they are supposed to be the experts here. Stop beginning the “buying dance” with a list of specifications and requirements (the answer) without first determining and sharing why you are doing this and what outcomes you want to achieve (the most important questions).
Sellers: Stop leading with mountains of data on your company and your offerings. You too are walking into the interaction with the answer (your products and services, obviously) without knowing the questions (why do anything and what the customer wants to accomplish). The latest report from ringDNA indicates that sales reps who talk a lot are both annoying as well as less successful. Analyzing data from roughly 130 million conversations, they found that for top-performing sales reps, the average talk streak – defined as an uninterrupted monologue – was just 12 seconds! And that was usually to set up thoughtful questions… What if you were to make them about the customer’s outcomes?
Collaboration Is Not A Four-Letter Word
“What did we get for the money we spent?” is the most common question asked when reviewing current suppliers and determining which will remain above the revised budget line. Buyers will look foolish, at best, if they’re unable to answer that simple question. Sellers will risk losing their current install base (not to mention upsell and cross-sell opportunities) if they can’t help their customers answer that question. When neither side collaborated on the right business outcomes during the sale (too often that is the case), they typically default to “The product or service is performing to your specifications… or We’re happy with the supplier’s performance.” Neither response answers the real question, and both are inadequate reasons to a highly stressed CFO looking to spend money wisely.
Buyers: There is no rational argument for not collaborating with the supplier to maximize the potential business and personal outcomes you both can deliver. And then constructing the “right deal” with the right products, services, volumes, support, etc. to maximize the odds you can deliver on those outcomes. Sadly, if you can just answer that simple question above, you’ll look like a hero in your company! Stop sending out RFIs with 165 specifications (I saw one last week) or 50-page RFPs (I also saw one of those last week) that focus on what you’re paying for (products and services) without a clue as to what you actually want the supplier to help you accomplish. In other words, be transparent about what you want to accomplish.
Sellers: Your job is to make your customers successful (if you desire a long-term and profitable relationship), not to simply book any deal you can land. Collaborate with the customer to determine the desired outcomes you will be on the hook for delivering. Customers trust you because of what you know about them and what they want to achieve. Then you should “connect the dots” between those outcomes and the “right offering” to further that trust. Furthermore, you’ll also have a lot more credibility if you can reference other customers who sought to achieve similar results and clearly articulate the outcomes you delivered for them.
Transparency Facilitates Simplicity
Gartner reports that 55% of buyers encounter an overwhelming amount of information they believe is trustworthy – and 44% of B2B buyers struggle with contradictory information from various suppliers (after all, how can every supplier be #1 in their field?). The most important question buyers need to answer is “Who really understand me and what I want to accomplish?” It is impossible to Google the answer to that question. That is the job of good salespeople. Buyers need help sorting through all the “noise” to get to the “signal” of what is truly important so that they can make a timely and well-informed buying decision.
Buyers: Why hesitate sharing What you want to accomplish, How Much and by When with suppliers? I can understand not sharing it, if you don’t know it, but then why not be transparent about that and collaborate with suppliers to find out what is possible? Then you both can determine the critical success factors to a complex solution. Getting the critical success factors right will dramatically increase your odds of success. Also, stop demanding a POC where you do not share the success criteria of the POC with the suppliers. Odds are your success criteria aren’t clearly linked to the desired outcomes, you’ll be wasting everyone’s time, and you’ll likely make a “low value and high regret” buying decision.
Sellers: If you can’t deliver on all the outcomes a customer wants to achieve, then let them know. Over-promising and under-delivering are unfortunately expected from most suppliers. Be transparent on what you can deliver and therefore increase the odds you’ll at least get that business and be able to deliver on those outcomes. Adopt strict prerequisites before participating in, and devoting precious resources to, any requested POC: 1) Collaborate and agree to the outcomes the customer wants to achieve; 2) Agree the POC success criteria align to those outcomes; and 3) Ask for the buying steps to close a deal if you are successful in meeting the success criteria. If a customer balks at any of these, then you’re either talking to the wrong person; this POC is a “check box” exercise prior to selecting another supplier; or this thing is simply “tire kicking,” not real and not worth your time.
As we prepare to come out of COVID-19, I believe how companies buy and sell will become the key to agility and properly allocating limited resources. With these three principles, companies, whether buying or selling, will close better deals, and deliver better business results. Companies that are outcome focused with collaboration and transparency can help “cure” the broken buying and selling processes by eliminating much of the “friction” that characterizes B2B interactions. Friction plays a big role in the 43% win rate of “do nothing,” because humans are wired to seek out the path of least resistance. Too often that means the status quo.
Encouraging news is that platforms and technologies exist today (and are being upgraded and enhanced as we speak) that virtually “share” a complex buying and selling interaction and provide a single point of truth for both parties. Thus, making it easier to collaborate virtually while providing transparency to both buyer and seller – before (identifying the right outcomes), during (developing the right deal) and after the sale (delivering on the outcomes and value). This is the real opportunity created by this crisis that we cannot afford to waste!
Good Buying and Selling!