The Epidemic in B2B Sales Prospecting
Many B2B selling organizations hit a wall in their new customer acquisition and revenue growth rates. Sales pipeline quality, volume and conversion rates are both symptom and impact of this situation.
This condition is especially evident in companies that are engaged in a complex or solution sale. Sometimes this is called a system or platform sale. The analyst firm SiriusDecisions calls it a “new paradigm” or “new concept” sale. I and others use “value sale”.
Even companies with a traditional, product selling model are not immune. Companies that experience stalled revenue growth may attempt to shift from traditional product selling, to a more consultative and comprehensive solutions or platform approach. Too often they bring their traditional selling mindset, process and skillset with them.
The B2B sales prospecting epidemic is the result of a critical underlying cause most people are unaware of and do not fully appreciate even when they become aware.
Companies that have had a hot, successful product eventually hit the growth wall. Their unique situation quickly propels them to $100, $300 or even $800 million in revenue. Then they experienced the revenue plateau.
Many years ago I observed PTC, a company near me, have this experience. (At that time they were Parametric Technology Corp – NASDAQ: PTC)
PTC grew to about $800 million with a hot CAD product that ran on the “new” Microsoft NT and later classes of high-powered, low cost, desktop systems. This opened the possibility for all engineers, enterprise-wide and globally, to have their own CAD design software system, inter-connected with all other engineering systems.
PTC rode this wave expertly. They sold CAD design software to engineers. Customers were easy to identify. Their customers understood their business problem and the product category (software) needed to address that problem. They knew how to use and even optimize the use of the product. There was no “paradigm shift.” This was a straight capability enhancement and replacement sale.
Then the inevitable happened. PTC had captured a significant part of the CAD market. But to meet market growth rates expected by investors, they needed to find or develop either another super-hot product, or a higher price, more comprehensive “solution” offer.
Product Lifecycle Management (PLM) was the decision they made. This was an exponentially more expensive initial sale than their CAD sale. It addressed an enterprise need, not a department need. It was a complex “platform” sale. This meant selling required engaging many significant functions across customer organizations. Of course, it was a very long sales cycle.
More importantly, it required a fundamentally different selling model. It took many years for PTC to successfully execute this sales transformation. Many managers and reps lacked the competency and skill to conduct this kind of sale. Revenue growth stalled. The stock price plummeted.
Underlying Cause of the B2B Sales Prospecting Epidemic
In Geoffrey Moore’s technology selling model, companies that find themselves “inside the tornado” with a hot product must focus on two core activities — take orders and ship product.
This is straight product selling to active, knowledgeable buyers. It’s a rush to a land grab before competition catches on. Prospecting must be targeted, aggressive and efficient.
In this situation the prospecting mindset is, “when buyers see how compelling our products are, they will decide to buy.” This prospecting approach sounds like:
“Hi, I’m from company X. We have a breakthrough replacement product for Y. Analysts A, B and C have called this the greatest thing since …. I’ve just signed up Company A, B and C who I’m sure you know. Would you like to meet and hear more about it?”
Pretty much sounds like most of the prospecting calls I receive each week. This also reflects the mindset I hear when I talk with these sales people.
I call this “find opportunities” selling.
The problem is, there aren’t enough active buyers to meet quota and tougher revenue growth goals. Like silver bullet product features, these market conditions don’t last long. Competition catches up. Customers become smarter. Sellers have to shift from selling to knowledgeable (IT) professional buyers, to teams of inexperienced buyers from multiple functions.
The core cause of the B2B sales prospecting epidemic is an inability to create opportunities when buyers aren’t looking to buy.
The reality is 90+% of potential buyers in your market aren’t actively looking.
Most of your prospects aren’t even thinking about the problems you solve. Many may not be aware of your solution category. Despite incessant requests from sellers and management alike, awareness campaigns won’t solve this problem fast or well enough. You have to sell your way out of it with effective (prospecting) conversations.
A second reality exacerbates this situation. Professional purchasing agents have given way to teams of buyers. The 6 to 8 people on these teams typically represent multiple functional groups. Often they have never conducted a similar procurement process before.
As CEB has eloquently explained, a fundamental B2B selling problem is dysfunctional buying. (See Unpacking Challenger Customer Insights) But CEB focused on the challenges of making a successful sale once an opportunity was created. They only implied the first big challenge, getting an opportunity started in the first place.
A third reality complicates this situation. The digital trend to ubiquitous online information has produced self-educating buyers.
So, one solution was to be marketing led. Content marketing strategy employs a combination of “inbound” marketing and automated “lead nurturing.” In theory, after a ramp-up period, this should produce a constant stream of sales ready leads.
In some product-selling situations this has occurred. In the B2C world it is a core tactic. Too many B2B marketers completely miss the important differences between B2C and B2B selling. They say, “it’s all person-to-person!”
Nope, B2B is high stakes team buying. It’s a very different buying dynamic. If your marketing team isn’t clear and honest about these differences, and have a compelling strategy to address them, you’re probably in even deeper trouble than you think.
B2B Sales Prospecting Implications
The implications for direct sales reps can be staggering. Some of the questions your reps will reasonably ask must be addressed by your sales enablement program:
- Where or who do we call?
- What do we say just to get someone to talk with us?
- When we do get a conversation, and they are not active buyers, what do we say, do or show to get them engaged?
- How do we overcome the challenge that we need to get 6 or 8 others enrolled?
- How does this change our sales process, cycle times, and management expectations?
The “perfect storm” for this dilemma looks like this:
B2B sales prospecting is inherently difficult, hard on individual egos, and a skill possessed by a relatively few “hunter” style sellers. The BDR trend, although important, has further exacerbated this problem.
Most buyers aren’t actively buying. Most of those aren’t even thinking about it.
Potential individual buyers are difficult for sellers to reach. Often this is due to extensive experience with product-pushing sales people who provide little value.
Getting a complex, solution sales opportunity started isn’t as simple as convincing 1 person or “creating demand” for known products. It’s hard. And it’s statistically lower probability to get 3, 4 or 5 more people enrolled to champion what is inherently a significant change initiative.
Compelling marketing tactics aren’t solving this problem. For most companies they have not. Now it’s becoming clear why they cannot.
For complex, value sales to teams of potential buyers, marketing lacks the tools to effectively ignite non-interested buyers into opportunity status. It’s very difficult to motivate belief changes, as well as action for change, based on content alone. Too much marketing content is still oriented to promoting products, or at least a particular solution approach. It doesn’t adequately help people work through the risk and cost assessment of their status quo.
Marketing engagement methods are still heavily email oriented. Email today is an information transfer vehicle. It is not a persuasive communication method. This doesn’t bode well for emerging account-based-marketing initiatives (ABM). This means there’s a lot at stake in figuring this problem out.
Sales people aren’t trained or experienced in B2B sales prospecting. Many sales people are lulled into waiting for marketing leads to be delivered. Perhaps worse, they’ve joined the marketing party by writing their own emails and attempting email campaigns.
Over the last decade organizations have added many new, young people to their sales ranks. In general, the quality of formal sales training and coaching is low. Sales prospecting training is even lower. I’m staggered by how little sales people read or take responsibility for their continuing education.
Those who join a product selling organization might learn traditional, product pitch prospecting techniques. Or, they might be assigned to a marketing managed “business development role.” They might think this is prospecting. In fact, it’s a tactic to remain top of mind until buyers have decided to conduct a buying process.
And that brings me to the crux of the problem.
Transformation Requires Leadership
This is not a sales rep problem, per se. It is a business and sales leadership problem.
If your organization has this problem, the solution requires business and sales leadership to become aware of the reality of the underlying cause. The product, sales strategy and process, and perhaps personnel that got you to this point, will not take you to the next level. “Lead-with product” sales prospecting and marketing demand gen practices won’t cut it.
This is the root of the core cause of the epidemic. Most business and sales professionals became “successful” in a hot category of product selling. They are, to use training language, “unconsciously incompetent.” They aren’t in tune with new selling realities, new requirements to create opportunities for a complex value sale, and the impact this is having on their business.
B2B sellers must create value for customers through the way you sell. This starts with the way you create opportunities with prospective buyers who aren’t actively looking to buy what you are selling.
For this you’ll need a different mindset, approach and skillset. For many organizations, this will require an intervention.
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