How buying patterns have changed
Sunday, April 12, 2015/
Salespeople everywhere are faced with demands to meet increasingly high quotas in the face of growing market complexity and relentless financial pressure. There is also more competition from ‘Me2’ products – just as good as brand names – and an increased pressure on margins with buyers reluctant to make early commitments. Salespeople are facing demands like they never had before.
Current research from the Behaviour & Economic Research team at NAB states that forward orders (in 2014) were very patchy for both big businesses and SMEs, making it very hard to forecast sales and manage pipelines. This only confirms the reticence of buyers to commit to purchase, which is felt by sales teams all around.
Buying patterns have indeed changed, making getting and winning sales that much harder. Just ask the salespeople out there. They will tell you things aren’t like they used to be. As salespeople, we have to work smarter and harder. I can personally attest to that with over 30 years selling experience under my belt.
Buyers also can have the negotiating upper-hand, especially when comparing products and prices. If the salesperson can’t sell in real value and is only left with product and price, the buyers can usually get what they want, often at the supplier’s expense. And there’s also the buyers who don’t care about value, and are just after the lowest price possible.
If a supplier decides not to meet their demands, buyers are able to quickly and easily switch.
Once face to face with the prospect or client, the salesperson encounters a (potential) buyer who has more information than ever before; whether they are well-informed or ill-informed is another matter (see points 2 and 3 below). Buyers have become more demanding about ongoing relationships with suppliers who they may pressure for added attention, incremental service and support whether they deserve this attention or not.
After the purchase, buyers become reviewers of service delivery and can make, break or dent a company or salesperson’s reputation by online reviews and the digital word-of-mouth.
These findings are backed up by a recent McKinsey & Company report, called Do you really understand how your business customers buy?
The report highlighted:
The consumerization of business buying… Marketers have long drawn a bright line between consumer shoppers and business purchasers. Consumers, after all, care deeply about brands and are more readily influenced by advertising, media messages, special deals, and coupons. In addition, they often turn to friends and family for advice on what they are buying, are susceptible to impulse shopping, and can switch from one brand to the next with little cost. Business purchasers, by contrast, do a lot of research, look carefully at specifications, follow a formal buying or procurement process, can experience high switching costs, and usually worry most about functionality.
Yet an explosion of communication vehicles and interaction channels has ratcheted up the expectations of business purchasers. Many more influencers and decision makers are now involved in the purchasing process, and business buyers too have been shaped by their consumer shopping experience. As a result, their behavior has become more consumer-like. There is no longer such a thing as a simple cold call: customers expect a sales rep to be extremely knowledgeable about their business and perhaps even their own individual profile—at least if the purchaser is a millennial who has grown up sharing his or her life online. In other respects, as well, the purchasing process is becoming more fluid.
With all these changes in buying patterns going on, it is surprising to find many organisations ignoring them and going to market with old approaches and strategies. What is also surprising is that many salespeople – even though they are aware of these changes and their managers have access to terabytes of data about buyer behaviour – still fail to assess just what influences their customers and prospects today.
Interestingly, the few companies that have recognised these changes have adapted their sales strategies to accommodate them and as a consequence are making market share and margin gains – well in excess of their rivals in the same sales segments.
So what do we need to do?
Focus on how customers and prospects have changed their buying habits
NB: the last time we spoke about the issue of sales and social media we focused on companies whose clients and prospects are not necessarily internet users, or at least not for all intents and purposes. The information below focuses on buyers in markets highly influenced by digital media.
The digital revolution and the explosion of social media have profoundly changed what influences many customers. Here are some interesting facts:
- Approximately 78% of B2C and 75% of B2B buyers use the internet and social media to research suppliers.
- When considering a purchase now, buyers (with easy access to literally hundreds of alternative sources of supply) tend to read online reviews and compare suppliers and price. In fact, consumers engage on average with 11.4 pieces of content prior to making a purchase.
- One study by Sirius Decisions (a global B2B research and advisory firm) indicates that 67% of the buyer’s journey is done digitally.
- Consumers are five times more dependent on content than five years ago.
- The B2B buying process is taking around 20% longer to close because of multiple stakeholder decision-making – management by committee. In fact, LinkedIn has reported that on average 5.4 people are involved in the B2B buying decision-making process.
Those sales and business leaders that have a strategy to proactively monitor buyer behaviour and build responsiveness into sales activities that work with buyers are finding that by replacing traditional above-the-line advertising with internet-based social interactions and deploying salespeople to help buyers integrate solutions rather than simply push their products and services are generating more business, at better margins.
Remember, everybody lives by selling something.