Bechtel Consulting Group

Vol. 8, Issue 3
                                                                                                                                    June, 2018 

The Competitive Edge

Strategies for Success in Today's Markets 

 

 
   I'm pleased to bring you the June, 2018 issue of " The Competitive Edge," a monthly newsletter geared to helping you boost your strategic, organi-zational and marketing performance. 
   My aim is to stimulate your own thinking, perhaps causing you to see things in a different light. If you do find the content helpful, please feel free to  you think will also benefit.
   I always welcome a two-way dialog because I stand to learn as much as I share. So please feel free to share your reactions, ideas or suggestions. You can email me at rick@bechtelconsulting.net or call 206-351-8604.  
 
The Widening Gap Between  
B2B Buyer and Seller  
What the Latest Survey Reveals
  
 
      I just obtained a copy of the report from CSO Insights outlining the results of their 2018 Buyer Preferences Study. As one who has provided sales training for many years, I found the results provocative, and thought they were worth sharing.
     The survey went out to 500 B2B buyers from mid- to large-sized companies, from 25 different industries and 21 countries. 50% of them were from North America. The report's overarching conclusion: Buyers are changing faster and to a greater degree than sales organizations, and sellers are rapidly losing ground.  
 
Among the findings:
 
     Based on responses to the survey, only a little over half (53%) of sales reps are meeting expectations. This is the fifth straight year of decline (down from 65% in 2011). The report noted that, since buyers are consumers first, their consumer experiences influence their B2B buying behavior. They've come to expect personalization, transparency & immediate fulfillment. And, their comfort level with online ordering and other transactional approaches that cut out the middle man is rising.
     Over 65% of those surveyed did report that they found value in their discussions with sales reps. However, another 32% - a third - said they have mixed feelings. On another question, twice as many buyers indicated that salespeople meet their expectations, as exceed them. This suggests a fair amount of propensity to switch providers, as well as a receptivity on the part of buyers to utilize technology in place of sales reps.
     Reinforcing this, when asked to choose those resources they prefer to turn to in solving a problem, "vendor salespeople" came in 9th - next to last. To put it another way, fewer than 25% of respondents included "vendor salespeople" among their top three choices. The top choice was "subject matter experts from the industry or third parties."  
 
It goes further.  
 
     When asked at what decision point they prefer to engage the seller, over 70% cited the point where they already have a clear understanding of their needs. This tends to undermine the efficacy of much sales training, which urges sellers to build a rapport early so as to participate in evaluating and shaping needs with the buyer. As the researchers noted, "Engaged later in the process, a seller is left to ask questions to understand what the customer has already learned. That creates a lot less value for a buyer."
     Worse yet, nearly half of respondents said that, beyond identifying needs, they waited until they had identified the solution before engaging the seller. This, in many respects, reduces selling to a price-and-features war. As the researchers put it, under such circumstances "all sellers start to look alike in the eyes of the buyer." And, in fact, nearly 60% of respondents saw little difference among sellers. 
     In response to such trends, sales organizations have been slow to change. They tend to be risk-averse, no doubt reflecting that that the sales function typically has the greatest short-term impact on revenue. As a result, most sales change initiatives tend to be incremental, rather than transformational.
     The report goes on to suggest that companies like Amazon and Alibaba see opportunity in this, to continue leveraging their AI based technologies and advance the self-service selling mode - the ultimate goal being to exclude sellers altogether.  
 
So, where do opportunities exist for sales organizations?  
 
     Despite the statistics reported above, the great majority of respondents said they were open to engaging earlier with salespeople. This suggests that too many salespeople are not putting their training into action. They aren't actively employing strategies to gain audiences with buyers ahead of time - to develop a productive rapport and establish themselves as valuable resources in the decision-making process. Against this backdrop, for those who choose to embrace this wisdom, the opportunities are substantial. (The report contains valuable detail on how these circumstances vary by buyer type.)
     According to respondents, an average 6.4 buyers are involved in making a decision over a period of five months or more. This precludes an easy approach to buying online, but it does favor the value of a sales rep who goes the extra mile to get to know all of those involved, understand their needs & criteria, etc.
     What buyers look for in a good sales rep is not new: Taking time to understand their business ahead of time, spending more time listening and less time talking, staying involved after the sale to assure things go well, demonstrated commitment to the long-term success of the client, etc. 
     Yet, while these have all been hallmark focuses of sales organizations for a long time, the survey results seem to suggest that not much progress has been made in raising buyer satisfaction. To wit, the study revealed that 78% of respondents feel their relationships with sales reps fall short of what they would term "trusted partner" or "strategic contributor" status.
     The study concluded that solutions to closing the growing bap between sellers and buyers need to be systemic in nature. Organizations, they say, need to consider holistic changes involving "sales process, management execution, technology stacks, hiring profiles and more." They go on to conclude, "...in the context of continually damaging declines in performance, sales organizations will have to consider more aggressive ways to significantly shape their work."  
  
 
The Critical Role of  
Customer Engagement  
Gallup's Take


     An article from the Gallup Business Journal entitled "Creating Impact In B2B Relationships" offers some thoughts on how to create and foster customer engagement.
     The article defines customer engagement as "an emotional connection based on confidence, integrity, pride and passion." It is fundamental to customer impact because it "establishes an element of partnership, which requires a genuine connection between your organization and its customers."
     The authors contend that to move beyond price wars, you need to rethink your mission and strategy. Success requires more than delivering a product or service; it requires helping customers succeed by improving  their performance. The better you do this, the stronger your partnership becomes.
     The question becomes, how engaged are your customers now? The article lays out four categories:

   Fully engaged:
Customers are strongly emotionally attached and loyal. They go out of their way to locate your product or service, and won't accept substitutes.
   Engaged:
Emotionally attached, but not strongly loyal. They like your product or service but can be tempted away.
   Not engaged:
Customers have a "take-it-or-leave-it" posture. They're disconnected emotionally, and are attitudinally neutral toward your brand.
   Actively
   disengaged

Completely detached from your company and its products or services; will readily switch. If switching is difficult, they may become antagonistic toward your company or brand.

     The notion of customer engagement may seem elementary, but the authors content that few companies have mastered it despite the obvious tremendous value. Fully engaged customers "deliver a 23% premium over average customers in share of wallet, profitability, revenue and relation- ship growth." 
     By way of example, the article contents that the typical B2B business has an optimal relationship with fewer than one in seven of its customers. Gallup's multitude of interviews with B2B customers in recent years found that only 13% of them are fully engaged. 
     Of those accounts with high engagement scores (at or above 4 on a 5-point scale), Gallup found that 21% grew by 20% or more the next year, while 34% declined by 20% or more. However, of those accounts with low engagement scores, only 15% grew by 20% or more, while a whopping   60% dropped by 20% or more. 
     The article concludes that companies need a process to regularly moni-tor customer relationships, else they may not discover they have a prob- lem until it's too late. 

 

The Competitive Edge is a monthly newsletter published by the Bechtel Consulting Group for the interest and enlightenment of our clients, colleagues and friends.  You can reach us at 6505 NE 182nd St, Suite 101, Kenmore, WA 98028; by calling (206) 351-8604, or by emailing rick@bechtelconsulting.net.  For more information about the Bechtel Consulting Group, visit our website, www.bechtelconsulting.net

 

We welcome your thoughts & feedback.


 

The Bechtel Consulting Group is committed to respecting your privacy.  If you believe that you received this newsletter in error and/or do not wish to receive it in the future, please send an email to rick@bechtelconsulting.net.

 

Thank you for your support,
 

 

 

 

 

 

 

 

 

 

 

 

Signature

 

In This Issue
An unsettling new study suggests that sales organizations are losing ground.   
     

Plus, Gallup's take on the role of customer engagement. 

  

 

If you find the content of our newsletter useful, please feel free to forward it to colleagues who might also benefit.

 

Did You Know....
 
The Marketing Executive Roundtable is comprised of the senior-most marketing executives from leading organizations in the greater Seattle area. The group meets monthly to exchange ideas and seek one another's counsel on the important issues facing marketing leaders today. It has proven an invaluable resource for marketing leaders to stay abreast of best practices in today's turbulent waters. If you or someone you know fits these qualifications and is interested in learning more, please visit www.merseattle.orgWe would be happy to have you or them join us as our guest at an upcoming session.


FOOD FOR THOUGHT:    

"By 2020, customers will manage 85% of their relationship with the enterprise without interacting with a human." 
 
from Gartner, Inc.  
   
 
If a colleague forwarded this to you, and you liked it, why not become a subscriber? Just click here.

You've received this newsletter because you requested it,  we're acquainted, or someone recommended it to you. Please confirm your

continued interest.  

 

You may unsubscribe here if you no longer wish to receive The Competitive Edge.

 

Bechtel Consulting Group

6505 NE 182nd St

Suite 101

Kenmore, WA 98028

Phone:(206) 351-8604

Email: rbechtel@bechtelconsulting.net 

View my profile on LinkedIn