Connecting with and understanding customers’ business problems and personal implications is more important today than ever. But in this fast-paced world, bombardment of digital messages, priorities shifting on a dime and never enough time, it’s not easy. However, when you don’t fully understand your customer, you are at great risk.
One of CI Squared’s clients, a large software company, discovered the consequences of not taking the time to truly understand their customer. After an initial demo/presentation to this long-standing customer, CI Squared’s client received negative feedback that they were losing. They were given another chance and came back 8 months later with a renewed presentation. The 12 members of the team devoted their time and effort to the new presentation during these 8 months, but they were again rejected by the customer. What happened?
CI Squared’s lost deal analysis revealed that at the crux of why they lost this sale was a lack of understanding. No one on the deal team connected with the operational team or key leaders. They were not able to uncover the real implications of their customer’s business problem and the time frame needed to solve it successfully. Without these insights, they were proposing a perceived solution they thought would fill their customer’s needs. However, from the customer’s viewpoint it did not hit the mark and would take too long. By contrast, the competition had built strong connections with workers and executives, they understood the business problem, motivations of the individuals, and the sense of urgency needed. The customer’s team felt that the competitor “got them” and could deliver a better, timelier solution.
The damages were huge: time, resources, and opportunity cost. They could directly measure that they lost a 3-year, $1.5 million deal in an existing account, $4.5M. How about the investment in people and time or the opportunity cost? How much did it affect their standing with the customer and confidence?
CI Squared believes that better discovery which leads to understanding the customer, both business and personal, is critical in today’s world. How do you help your customer uncover their real problems and deliver insights when they don’t have time? Better human interaction through empathic communication can help you gather the Customer’s whole story and is at the heart of winning today. Customers want to be understood and want to buy from sales teams that give them insights and confidence. But we often rush to talking about our product or service vs staying in the moment and saying, “Tell me more.”
The world has changed and Buyer 2.0 with it. They do not want the same old sales teams who just pitch their products. They have seen that movie before. Your old sales techniques are not enough today to give you the ability to make a strong human connection and listen well enough to get their complete Story with empathy. However, most salespeople have not been exposed to new and innovative ideas and tools. Why not? Some don’t realize the magnitude of this problem on their performance. Some are complacent because change is hard. Some just won’t invest in their people to fill these GAPS. And some think they do it well already which the research debunks.
You can challenge yourself to see how big of a GAP this is individually or organizationally. Benchmark your win rate % against industry averages. Sirius Decisions statistics show that if you count every deal you work on, best in class B2B sales organizations win 40%, lose 30%, and the final 30% just do not buy. We believe that if you calculate this accurately, you will want to do something now. We can help you dramatically shift these ratios.
B2B Sales is more challenging than ever. Are you following the old herd or leading the new pack?
Customers’ buying habits are changing. The fast pace of technology only accelerates this change with an overwhelming amount of messages and shifting priorities clamoring for people’s undivided attention.
There’s also an intergenerational shift in the workforce as boomers retire and millennials take over which creates a multitude of buyers with different needs. Every one of those individual buyers demands specific valuable insights; something they don’t know, for improved performance from sales teams.
Research from Gartner/CEB states in the shifting B2B executive landscape, alignment of critical stakeholders before any major purchase is highly important. So more people hop on the buying cycle and key people-not as far along in their Buyer’s Journey because of shifting priorities-come in late. Multiple buyers like this in the process result in delays due to repeated activities, frustrating sales teams. Drawn out sales cycles negatively affect everyone involved in your sales campaigns, sales, presales, services and your executives, sapping productivity.
Our research shows the sales teams who struggle the most with the Buyer 2.0 exhibit these “old behaviors”:
- They don’t understand and connect with customers personally: People want human connection as well as business results. 90% of all purchasing decisions are made subconsciously(crowdspring) so having the ability to emotionally connect with people in their harried world is more important than ever
- They don’t understand the customer’s business problems deep enough to provide insight: Because “customers are coming into the sale armed with better product knowledge than ever before. The average customer is more than halfway through the decision-making process by the time they talk with a sales rep, according to some estimates,” (Agile CRM) oftentimes they don’t have the time or energy to provide the finer points of their business problems. But without understanding the business problem it’s hard to offer insights and differentiation, so talk turns to a well-known subject: the product.
- They rush to demo features and functions: It’s not unusual. According to Gartner, 73% Sales reps focus too much on product. We observe that many sales teams rush to demo the features of the product because this is their wheelhouse, but jumping right to knowledge of the product will not cause them to win the deal. If anything, rushing to demo without digging in deep to the problems elongate the sales cycle, confuses the customer, halts progress, and many times causes you to miss the opportunity for understanding. But we all train on, know, and love our product.
Which behaviors are you most guilty of? Are you or sales and marketing guilty of using the same old process and methodology or are you adapting to the new buyer? Quickly adapting to align with shifting customer wants and needs is imperative. How will you leave the herd mentality, set yourself apart, and lead the pack?
“It’s not whether you win or lose, it’s how you play the game,” according to the losers and their parents
You win deals, you lose deals, and some deals are left hanging. You can’t win every one right? Or can you? You can get closer. First, get to know the standard at which to gauge your win rates. In our 3 years of significant research we found the 40/30/30 model, a metric used at end of sales pipelines which represents the average win rate for high performing companies. Most companies who claim to have higher win rates do not measure every deal a real sales person touches. If you have 10 deals in the pipeline you’ll win 40% of them, lose 30% and 30% will be left with no decision. Look at your company’s own win rates then analyze:
1. What’s happening in the good deals? What’s happening in the bad deals?
2. Why do you lose?
3. How much time did sales reps spend on lost deals?
4. Did you understand the customer?
Conducting a lost sale analysis was just the tip of the iceberg for one of our customers realizing why and how they lost a significant deal. This customer, a large software company, brought in their sales team to sell to a customer, yet they did not understand what the customer wanted and when they wanted it. Consequently, their boss had 12 members of the team charge ahead for 12 months on a product for future integration only to bring it back to their customer and have it solidly rejected. The timeline for this product was way too long and the CFO, justifiably, chose a company who could provide correct software quicker. Our customer realized lack of understanding was the crux of the problem. They were proposing a perceived solution that they thought would fill their customer’s needs when in reality, for the customer the benefits were too far out on the timeline compared to the competition.
Time wasted. People wasted. Customer good will squandered. How much do you really lose by competing for a piece of business for this long with no apparent customer solution? They didn’t “lose fast” and move on. They didn’t know to walk away because they did not gather the customer’s story well, understanding them and their struggles. The best of the best know where to focus their time, energy and resources to increase probabilities of winning deals. Lose fast and convert the no decisions.
Helping your customer uncover their real struggles is key. Then analyze the implications of those struggles to their business. Who’s affected and why? Is this tipping point enough for them to take action? What needs to shift? Can your company play a key role in solving their problem?
Communication and gathering the whole story and struggles are at the heart of a successful interaction whether you win, lose or somewhere in between. Understanding the customer and their struggles leads to you knowing exactly what they want and what you can offer to solve it. You’ll now know where you can’t win and gain courage to lose fast. Value your time and move on to win the next deal. What would happen to your performance in you changed 40/30/30 into 50/25/ 25?
Nudge: Be curious – Ask open ended questions and LISTEN to gain better insight of your customer’s real struggles. Want to become a better listener and get the whole story? Contact CI Squared to learn more firstname.lastname@example.org.