Buyer 2.0 and Solution Selling€¦ · • Members of the C-Suite search for information themselves • The Internet is the C-Suite’s top information resource • They use search

Buyer 2.0 and Solution Selling®

Part I of a II part series: The New Buyer Landscape

A Sales Performance International White Paper

Buyer 2.0 and Solution Selling® 1

© Sales Performance International – All Rights Reserved


Part I of a II part series...

Solution Selling® is now entering its third decade of use in major global corporations. This milestone has been a catalyst to frequent articles, blog posts, and commentary regarding its continued relevance. Most of these observations have been largely misinformed and have been based on a lack of real understanding and practical exposure to Solution Selling® – as it is taught and practiced today.

The genesis of Solution Selling® was in technology-related industries. The tech boom in the 80’s created an array of new, complex business products that made fresh demands on sales professionals - knowledge and skills beyond basic product understanding. They had to become adept at diagnosing customer business problems and helping to shape a vision of a practical solution. In essence they had to become more “consultative.”

Over the past three decades, markets have become increasingly global and competitive; the desire (and necessity) of selling high value solutions has permeated virtually all industries. As a result, we have seen customer demand for Solution Selling® expand dramatically into a broad array of industries, including manufacturing, logistics, business services, telecom, financial services, office products, and even some levels of retail. After all, who doesn’t want to be perceived as consultative by their customers?

It is vital for any sales methodology to parallel the “world of buyers” – which has undergone a radical transformation in the past 10-15 years through the emergence of the Internet. Before delving into the world of new buyer behavior, it is valuable to consider the general concept of buying phases.

How Buyers Buy – The Behavioral Process

Let’s first look at the behavioral process that buyers have traditionally gone through. In most cases, business to business (B2B) buyers would conduct strategic planning activity to:

• Identify ways to address some existing critical business issues • React to market conditions or regulations • Establish the corporate direction - usually with the goal of improving the value of their organization

Generally, the outcome of this planning activity has been a potential initiative that requires additional investigation – in terms of feasibility, potential return to the organization, etc. We categorize this planning phase as Phase 0: Strategic Planning to denote “pre-sales opportunity.” Essentially, the traditional “buying phases” begin when a pain (business issue) is identified and a sales opportunity can be initiated. [See Figure 1: Buying Phases and Shifting Concerns of the Buyer (Sales 1.0 Environment)]


Buying Phases

Phase 0:Strategic Planning

Phase I: Determine Needs

Phase II: Evaluate Alternatives

Phase III: Evaluate Risk

Risk

Cost

Needs

Solution

Marketing Sales

Time

Buying Phases and Shifting Concerns of the Buyer (Sales 1.0 Environment)

Once the buyer admits they have a business issue (pain) that they need to address, they would navigate the normal buying process to address it. That typical buying process can be characterized by three distinct phases (Determine Needs, Evaluate Alternatives, and Evaluate Risk). In Phase I, the buyer or buying committee would contact potential providers, meet with consultants and conduct internal fact-finding to determine specific needs (and estimate an initial budget). The primary focus in this buying phase is a refined understanding of needs. Once established, the buyer would then enter Phase II where they would evaluate alternatives to determine appropriate providers to help them address their needs.

In Phase II, buyers are most concerned with selecting the right solution, so they typically would meet with multiple vendors and perhaps issue requests for proposal, have the vendors conduct demonstrations, etc. As denoted in the figure above, “risk” starts to emerge in this phase while cost is of lesser importance.

The end of Phase II culminates with the buyer finding the best solution alternative(s). At this point the buyer has narrowed and likely ranked the best set of worthy providers. This ushers in the Evaluate Risk phase (Phase III), where the buying organization weighs the consequences of making a purchase decision. In this phase they may ask for referrals, look at additional forms of proof, and investigate the business case for moving forward.

The Emerging Profile of Buyer 2.0

In the Sales 1.0 environment, the seller had the advantage of information asymmetry over the buyer. In the Sales 2.0 environment, the buyer now has the advantage. There are many anecdotal findings as well as more formal research initiatives that, when looked at collectively, start to create a profile of today’s buyer – “Buyer 2.0.”

Figure 1: Buying Phases and Shifting Concerns of the Buyer (Sales 1.0 Environment)

1.0

Leve

l of C

once

rn

Identified Business

Issue (Pain)

2 Buyer 2.0 and Solution Selling®


“The Rise of the Digital C-Suite”, A whitepaper by Forbes Insights [in association with Google] presents survey findings conducted by 354 top executives across numerous U.S. companies (all over $1B USD revenue). The respondents spanned various titles and industries.

A handful of those findings serve to characterize today’s Buyer 2.0:• Members of the C-Suite search for information themselves• The Internet is the C-Suite’s top information resource• They use search engines and conduct multiple searches daily• More than half of executives under 40 use popular social media sites

daily or frequently

Another source on today’s buyer, “Breaking Out of the Funnel”, a DemandGen Report [sponsored by Genius.com], contains content from a B2B Transformation Survey conducted across 103 respondents involved in the purchase of a business solution or system during a 12-month period. Those respondents were across a variety of vertical industries (including software, technology, healthcare and financial services). The research characterized today’s B2B buyer with the following descriptions:They often start their journey by tuning into social media and peer connections to learn how other companies have handled similar business challenges. Buyer 2.0 spends time researching the websites of targeted solution providers and controls the conversation by reaching out directly or arranging to be contacted at their preferred time and format. (See additional statistics from this research in the right side bar)

When you look at these surveys and trends a profile of Buyer 2.0 starts to emerge.

Buyer 2.0 Characteristics in Sales 2.0 Environment

• Can find the information they need to better guide their buying and decision-making processes

▫Can self-diagnose their problems and symptoms ▫Can access online demos / proof, opinions, case studies to help evaluate solutions ▫Can narrow down potential solution providers before engaging with vendors

• Is impatient and wants information immediately in a clear, concise manner

• Finds risk mitigation important and will navigate accordingly • Wants to drive the process

▫ Can stop and start the buying process whenever they want • Expects engagement with a vendor to be a valuable use of their time

Buyer 2.0 Implications on the Traditional Buying Process

If we revisit our primary concepts around how buyers have traditionally evaluated and bought, we will be able to open our eyes to changes in their approach.

Today’s B2B Buyer:

◄ 59% engaged with a peer who had addressed the challenge

◄ 48% followed industry conversations on the topic

◄ 37% posted questions on social networking sites looking for suggestions/feedback

◄ 20% connected directly with potential solution providers via social networking channels

◄ 44% conducted anonymous research of a select group of vendors

◄ 41% researched papers / posting from thought leaders

◄ Expects consistent, relevant communication from both sales and marketing

Source: “Breaking Out of the Funnel”, DemandGen Report [sponsored by Genius.com]



With unprecedented access to information, buyers are not so reliant on sellers to lead them through their buying process. Buyers can identify their own business issues to address, conduct research, reach out to peers, participate in blogs and forums, and they can attempt to diagnose their own needs and formulate a list of evaluation criteria. In many cases, either the sellers is completely locked out of Phase I or are contacted somewhat informally to help validate initial findings.

As a result, in the world of Buyer 2.0, sellers are often reacting to a set of pre-conceptions, versus introducing the potential pain, and jointly shaping the “vision” of a solution. [See Figure 2: Buying Phases and Shifting Concerns of the Buyer (Sales 2.0 Environment)]

Buying Phases

Phase 0:Strategic Planning

Phase I: Determine Needs

Phase II: Evaluate Alternatives

Phase III: Evaluate Risk

Marketing Sales

Time

1.0

2.0

• 80% of buyers find you • Buyers have a “hypothesis” already forming

Summary

The abundance of information available to buyers can put even the best sales professionals on the defensive – in a position of reacting and competing on price. The ability to position and sell value effectively – with agility - is more critical now than ever. “Situationally fluent” sales professionals that can adeptly validate or challenge a customer’s vision of a solution will have a distinct edge. The new breed of informed buyers requires re-thinking both sales process and sales methodologies.

To Be Continued

In Part 2 of this white paper we will explore how sales process, methodology, and selling skills need to adapt to this new world of buyers.

Figure 2: Buying Phases and Shifting Behaviors of the Buyer (Sales 2.0 Environment)


• Sellers need to validate or challenge buyer “vision”• “Situational fluency” is more critical than ever

Marketing

Sales Performance International - Global HQ4720 Piedmont Row Drive, Suite 400Charlotte, North Carolina USA 28210Tel: +1.704.227.6500Fax: +1.704.364.8114

Sales Performance International - EuropeCorporate Village – Figueras Building Da Vincilaan 11B-1930 Zaventem, Belgium Tel: +32 2 2525004Fax: +0032 2 2525014

Sales Performance International - ChinaRoom 1106, Building C, Vantong CenterNo.6 Chao Yang Men Wai AvenueChaoyang District, Beijing 100022, ChinaTel: +86 10 5907 3285Fax: +86 10 5907 3284

[email protected]: +1.704.227.6500

www.solutionselling.comwww.spisales.com

Sales Performance International (SPI) is a global sales performance improvement firm dedicated to helping the world’s leading corporations elevate their sales relationships and drive measurable, sustainable revenue growth and operational sales performance improvement.

Founded in 1988, SPI has been the leader in helping global companies successfully transition from selling products to marketing and selling high-value solutions.

With extensive sales performance expertise, deep industry knowledge, global resources and a proven track record, SPI collaborates with clients to deliver strategic, operational and tactical solutions.

SPI has assisted more than 1,000,000 sales and management professionals in more than 50 countries and 14 languages achieve higher levels of performance.

About SPI

Co-sponsorship Partner: VENDETIUM BVBA Leireken 89, 1785 Merchtem Tel: +32 471 64 08 30

www.salesoutsourcing.be/nl


Part II of a II part series: Adapting to the New Paradigm

A Sales Performance International White Paper



The B2B Buyer/Seller FrameworkPart II of a II part series...

In part one of this white paper, we closed with an illustration that depicted the diminished involvement of the salesperson in the in the early and middle stages of today’s buying process. Before delving into how sales organizations need to adapt to Buyer 2.0, it is useful now to consider an integrated “buyer/seller framework” that has a general application for typical B2B scenarios.

While there is no “universal” sales process for B2B, some combination of marketing and sales resources typically navigate a sequence similar to the one illustrated here:

The variations in this framework are typically driven by the following: • Role variations – some roles may be involved in a subset of these steps [for example, a telesales group might

only focus on the first two steps and pass off leads to sales for additional qualification and development] • Solution complexity – simpler offerings may require much less elapsed time between steps and less activity

within each step • Customer status – existing customers may require less early stage activity because your organization is a

proven entity

But the important aspect of this illustration is in the Buyer 2.0 World, these steps are still navigated – but the way this occurs is becoming very different than in the past. As a result, sales (and marketing) organizations need to adapt how they navigate the overall sales process in a number of ways.

Buyer CycleNeeds Awareness Evaluate Alternatives Evaluate Risk

◄ Buyer becomes aware of potential problem or need

◄ Awareness may occur through marketing and/or sales activity

◄ Buyer investigates possible options to solve problem or meet perceived need

◄ Buyer may do their own research and/or have dialogue with sales

◄ Buyer concludes that the need will be met (problem solved)

◄ Buyer concludes there is justification to make a financial commitment

Sales Cycle

Plan Create Qualify Develop Prove Close

Determine who to sell to (the target) and best methods to approach them (can be marketing or sales)

An opportunity has to be created through a combination of marketing and sales activity

When interest is expressed, both the buyer and seller need to decide if the opportunity merits additional investment in time

The buyer and/or seller need to arrive at a definition of a solution to solve the problem or meet the need

The proposed solution needs to demonstrate that it meets the criteria for solving the problem (through various forms of proof)

A mutually agreeable financial commitment is secured


Adapting to the Buyer 2.0 Paradigm

For companies that strive to market and sell high value solutions, there are many potential ramifications of the new buyer paradigm. In addition, the “Sales 2.0” phenomenon has produced an avalanche of new ideas, techniques, and technologies that purportedly will drive success in this new selling environment. As a result, many organizations are in reactive mode, with highly fragmented approaches for dealing with new types of selling (and marketing) challenges.

To simplify and organize our thinking, there are three key factors of the new buyer paradigm that, if thoughtfully considered, can help your organization successfully evolve:

1. Marketing and sales are becoming more blurred than ever2. B2B buyers are becoming highly informed “comparison shoppers”3. Risk aversion is the “new normal”

Each of these factors relate closely to distinct stages in the “buyer cycle.” In the paragraphs below we will discuss each of these, and ultimately tie them to an updated buyer/seller framework that can serve as a model for effectively selling solutions in today’s marketplace.

Marketing and Sales Blur

The tenets of business development (“stimulating interest”) within traditional Solution Selling® are still very relevant for marketing and sales - don’t lead with product, focus on critical business issues, focus on how you’ve helped others and be concise! The dilemma for salespeople today is that they are to some extent being forced out of the early, “interest stimulation” aspects of selling. The downside of this scenario is that win/loss ratios typically favor sellers that are involved earlier in the buying cycle, as opposed to reacting to an active need.

In addition, marketing has far less control of the perception of your company in the marketplace. With the emergence of blogging, discussion boards, improved search engine optimization, third party information aggregation services, and social networks with communities (think groups on LinkedIn, etc.), there are more conversations, opinions, experiences and information about you, your company and your products and services in cyberspace than ever.

While you can’t control the message, you can monitor, listen to, and participate in it as well as help to shape it. Messaging and credibility-building is no longer just the role of “formal” marketing. Many marketing organizations simply don’t have the bandwidth to operate at levels this granular. To get back to the “front” of the sales cycle, the sales professional must now extensively engage in “informal” marketing. So salespeople need to participate actively in industry or community discussion groups to demonstrate thought-leadership and credibility. They need to regularly engage in discussions that are talking place in relevant communities. To accomplish this, sellers need to become “social media literate” – they need to become power users of new tools and technologies that allow them efficiently engage when buyers are forming their initial ideas about a potential problem or need (more on this later). Marketing and sales need to be better connected than ever before… selling is shifting into traditionally pre-funnel activities and marketing is shifting in-funnel.

The B2B “Comparison Shopper”

Armed with an abundance of information resources, the new buyer is empowered to conduct extensive research and fact finding when they suspect they have a problem or need. More often than not, by the time an actual sales conversation takes place, the new buyer usually has a premise that is already forming about the nature of their problem and how to solve it. This doesn’t mean they are fully aware of the scope of their problems, the underlying reasons for them, or the financial impact to their business. It also doesn’t mean they are objectively informed; but, their perspective has already been shaped and influenced by a variety of resources and mediums.


◄ Key Sales Takeaway: Sellers must become highly effective “micro-marketers.” They must become capable users of new social media tools and technologies to get back to the “front” of the sales cycle. “Micro marketing” is about building relationships, credibility, providing value but not about overtly selling.


This means that a different level of sales conversation needs to occur – one that is somewhat of a hybrid between traditional “vision creation” and “vision reengineering” consultative conversations. The seller needs to quickly ascertain where the buyer is in the buying process (phase I, II or III), what the buyer knows about the selling organization and its offerings, what they know about competitive offerings, and diagnose the overall state of the buyers “premise.” The ramifications here are clear; the seller must be highly “situationally fluent” with respect the buyers industry, issues, competitive alternatives – as well as be able to objectively validate or challenge the perception of the buyer.

In addition, buyers may already have formed an opinion of the value a seller will bring to them if and when (and whether) they decide to engage them. They may have searched for you on LinkedIn, Facebook, etc. to formulate an opinion of you. Not only should that search put you in a favorable light if your information and content is appropriate, but the search needs to foster “social credibility” – participation in thought leadership conversations, authorship of white papers, associations that suggest professionalism in your job, etc. Buyers are looking for relevant mutual connections that they can reach out to. Likewise, you can explore the same avenues to build up a better understanding of the buyer once you are aware of them. In essence, buyers are “comparison shopping” not only solutions but the people behind them.

Risk Aversion as the New Normal

Recent industry research indicates that nearly 50% of forecasted opportunities fail to close. It isn’t that companies fail to perceive problems they need to solve, or opportunities they can capitalize on. It’s that for some combination of reasons, taking action and making financial commitment just doesn’t happen on half of “qualified” sales opportunities. There are a number of potential factors that contribute to this “failure to close.”

The overall economic climate has undergone multiple forms of trauma in the past decade. The Internet bubble was closely followed by events of 9/11, and more recently the instability of the global financial system has suppressed corporations’ willingness to invest. A by-product of this environment has been the emergence of increasingly sophisticated purchasing functions in corporations. These organizations have typically undergone extensive training in effective procurement and negotiation practices, and create a new layer of “sponsorship” for sellers to navigate successfully.

So the Buyer 2.0 environment is not just a more informed consumer, it also involves an increasingly more risk averse and sophisticated purchasing function. As a result, salespeople will need to elevate their abilities in multiple areas to drive more acceptable close rates. Sales professionals in the Buyer 2.0 world will need to be exceptional in their abilities to position, articulate, and defend the value of their offerings. Purchasing organizations are also arming themselves with formidable negotiating capabilities. In many In addition to increased levels of business acumen, sellers need to be well versed in principles of effective negotiation.

These higher levels of proficiency will require investment in both education and tools that integrate business acumen and value-based execution through the entire sales process (we call this the “value cycle”). The sales professional must be insightful and effective at legitimately helping the buyer rationalize the need to take action – in a manner that is mutually beneficial to both buying and selling parties.


◄ Key Sales Takeaway: Sellers must become “consultative experts” They must be “situationally fluent” consultants who can quickly and objectively validate or re-frame a buyers existing premise.

◄ Key Sales Takeaway: Sellers must become effective “risk managers.” They must be able to skillfully position and demonstrate defensible value to increasingly sophisticated buyer organizations.


Adapting Sales Process and Methodology to Buyer 2.0

As we re-visit the integrated buyer/seller model and consider the ramifications of Buyer 2.0 on the marketplace, we can begin to form a clearer, more structured picture of necessary changes with respect to sales process and methodologies. The demands of this new environment suggest three distinct “sub-roles” for sales professionals.

• The “micro-marketer”• The “consultative expert”• The “risk manager”

These sub-roles align with closely with the buyer cycle, and the illustration below depicts an updated buyer/seller framework.

Summary

While this model is neither universal nor exhaustive, it provides a framework and direction for the types of skills, activities, and tools that are becoming new essentials for effective sales execution. This updated thinking is a significant driver for new sales learning and development programs.

In 2012, Sales Performance International will release Solution Selling 2.0. This major update to the proven, results-driven methodology and training curriculum will directly address the Buyer 2.0 impact to sales process, methodology, and the sales training approach.


Buyer CycleNeeds Awareness Evaluate Alternatives Evaluate Risk

Sales Cycle

Plan Create Qualify Develop Prove Close

New Roles

Seller as “Micro-Marketer” Seller as “Consultative Expert” Seller as “Risk Manager”

New Activities

▪ Proactive territory/account planning ▪ Monitor / react to business triggers ▪ Monitor / participate in social

conversations ▪ Monitor relevant web “content” and

route to prospects ▪ Influence your perception as SME

(forums, blogging, etc.) ▪ Network and leverage industry

connections

▪ Establish credibility quickly ▪ Quickly validate or challenge buyer

premise (“situationally fluent”) ▪ Industry knowledge ▪ Capability knowledge ▪ Solution knowledge ▪ Competitive “knockouts” ▪ Agile with research and alternatives ▪ Value based on differentiation

▪ Clearly define differentiated value ▪ Provide quick, effective forms of proof ▪ Clearly define solution evaluation

approach ▪ Negotiate effectively ▪ Access to capital

New Tools and Resources

▪ Marketing automation (participation) ▪ Campaign & Lead tracking ▪ Nurture marketing ▪ Open business directories (Jigsaw,

ZoomInfo) ▪ Social media (LinkedIn, Twitter,

Facebook)) ▪ Business intelligence tools (InsideView)

▪ Social media (Twitter, LinkedIn, Facebook, industry blogs/forums)

▪ Business Intelligence Tools (InsideView) ▪ Easily accessible sales tools ▪ Diagnostic models ▪ Problem/solution maps ▪ Competitive comparisons ▪ Case studies

▪ Web presentation tools (WebEx, GoToMeeting)

▪ Value (ROI) calculators ▪ Collaborative tools (wikis, etc.) ▪ Online proof of concept demonstrations

Sales Performance International - Global HQ4720 Piedmont Row Drive, Suite 400Charlotte, North Carolina USA 28210Tel: +1.704.227.6500Fax: +1.704.364.8114

Sales Performance International - EuropeCorporate Village – Figueras Building Da Vincilaan 11B-1930 Zaventem, Belgium Tel: +32 2 2525004Fax: +0032 2 2525014

Sales Performance International - ChinaRoom 1106, Building C, Vantong CenterNo.6 Chao Yang Men Wai AvenueChaoyang District, Beijing 100022, ChinaTel: +86 10 5907 3285Fax: +86 10 5907 3284

[email protected]: +1.704.227.6500

www.solutionselling.comwww.spisales.com

Sales Performance International (SPI) is a global sales performance improvement firm dedicated to helping the world’s leading corporations elevate their sales relationships and drive measurable, sustainable revenue growth and operational sales performance improvement.

Founded in 1988, SPI has been the leader in helping global companies successfully transition from selling products to marketing and selling high-value solutions.

With extensive sales performance expertise, deep industry knowledge, global resources and a proven track record, SPI collaborates with clients to deliver strategic, operational and tactical solutions.

SPI has assisted more than 1,000,000 sales and management professionals in more than 50 countries and 14 languages achieve higher levels of performance.

About SPI

Co-sponsorship Partner: VENDETIUM BVBA Leireken 89, 1785 Merchtem Tel: +32 471 64 08 30

www.salesoutsourcing.be/nl

Documents

Buyer 2.0 and Solution Selling€¦ · • Members of the C-Suite search for information themselves • The Internet is the C-Suite’s top information resource • They use search