Learning Nugget 23 - 5 Buyer Myths
Myths, fairy tales, wives tales, urban myths, superstitions……..there are alive and well in the world of professional selling.
Here are the top 5 common myths that the Enterprise Technology Sales Profession continues to perpetuate;
#1 – Customers buy on price
Study after study shows this to be a blatant fallacy. One of particular note is from the Chally Group who identified that price is actually the 4th consideration (see diagram at right from their research). Go one step further…ask yourself are you the cheapest in the market place ? If the answer is no, then how and why do you continue to secure and win customers at a significant increasing rate. The myth is perceived as a lot of the sales activity and time is spent with people in IT and Procurement who focus on sharpening the price pencil. Thus the feeling, the perception, is price is the most important factor. It’s not !
#2 – We Can’t Go Around IT
The CIO, Chief Irrelevant Officer, is our primary client today. Yet "Shadow IT”, and the increasingly common studies that show CMO’s now have over half the discretionary IT spend, indicate that transformational initiatives are being driven by executives other than IT. IT will remain important, but for operational “keep the lights on” infrastructure and tactical expansion opportunities. This myth exists as we believe that all purchase are made by IT. This is simply not true.
Transformational initiatives are in fact business initiatives with an IT component. Net new opportunities that are larger and offer greater margins, will be these complex business and digital transformation initiatives, not IT technology projects. The only way to be involved is outside of IT. IT don’t get involved in these until late in the buying cycle. IT have the same challenge we as professional sellers do. Being relevant to the business. If you are outcome based, and not selfishly pushing product, IT will desperately want you to go with them to the business. The business desperately wants help to see what they can’t see.
#3 – Creating Demand with the business takes too long and is too hard
How long is your average opportunity “sales cycle” today ? If 9 months or more it’s easy to demonstrate demand creation activity being less than that. With the pace of change at an all time high, are senior business executives taking over 9 months to make decisions ? Operational decisions take a long time, as they compete for shrinking budgets and seek efficiency and cost savings outcomes. They come under significant scrutiny as they are operational in nature and offer only small / lower benefits. So with low returns, or in some cases no returns (but necessary investment) decisions are extended as there are many many many competing operational budget needs. Transformational initiatives and ideas have a very very different decision making process.
Instead of getting bogged down in analysis paralysis, competing for budget and de-risking the act of “doing it”, transformational initiatives quickly reach a Go / No Go decision. Boards and Senior Executives assess ideas using different risk and value profiles, they assess ideas in weeks, not months. If they idea is viable and offers significant value with a belief of high probability of success they will act quickly. In short creating demand is about ideas competing for attention and time. The best ideas, are quickly explored and acted upon. As the upside is significant. Opportunities can progress in under 60 days.
#4 – The primary value customers seek is cost savings
Ask any CEO what is their primary focus, concern, time invested in and they will say risk. We believe there are three primary outcome or goal categories that executives consider – Risk, Revenue and Cost. Every executive considers all three, but in a very different order.
Boards and CEO’s care primarily about risk. Business Risk. Then revenue or growth and finally cost, productivity and efficiency
Senior management focus primarily on revenue, typically followed by cost savings and productivity and finally with operational risk
Middle to lower management focus primarily on cost savings and productivity, followed by operational risk and finally revenue
While these are board categorisations, some departmental groups, such as sales, will have a slight variation the above. But for the most part the above represents goal and outcome focus on various executive types.
We believe customers primarily seek cost savings benefits as that is the primary focus of IT executives who are most middle management, occasionally senior management. So he myth is true if we only meet with and engage with IT executives. When engagement is expanded beyond these executives the primary outcomes shift dramatically to revenue and risk related goals
#5 – Buyers think and act in a simple gated step by step process (just like we really want them to)
Have you ever witnessed a company or government entity break their own procurement and probity rules and buy without an RFP ? Of course you have, we all have. Have you had a customer just ring to place an order. No RFP, no EBC, no reference site visit or complex proposal ? Have you had a customer that has made you jump through every hoop, multiple multiple meetings, all really positive, contracts debated and negotiated, teams ready to deploy and at the last minute, they pulled the pin and decided to drop the project ?
Customers don’t follow our ideal structured step by step process, they all think and act differently.
In many cases they don’t even have a defined buying process. There may be some common activities, understanding your offering, evaluating it, seeking a proposal and contract negotiation, but these can be done in any order and at any pace.
Successful sales professionals actually help customers move through a buying journey quickly and easily, it’s a process that is unique to their situation, not generic to a tool or system. An outcome based approach focuses the journey not just on the path to a PO, but rather the path to impact on outcome. The purchasing decision is merely an early stage activity that is a fait accompli