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THE TABER REPORT |
 unsubscribe TaberConsultingsubscribepast issuesFebruary
2005
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Although every company has a different product situation, there's a common thread running through IT vendors: many "sales cycles" never really get started. The prospect might take a meeting and watch a demo, but interest falls off dramatically after that. Ironically, prospects seldom invest enough time to really know whether they are interested or not. They just move on and do nothing. In 2003, I offered a prospect over $100 K in software and services for free -- and they didn't have time to even evaluate the offer, let alone get value from it. What's
going on here? Give me a few moments to interpret recent history, and then
I'll develop a model you can use to change the way you start - and finish - sales cycles.
How do you buy? In
the factory, we make hypo-allergenic pigments. In the stores, we
sell hope. You probably buy in a way that seems very rational to you. But it's been pretty well documented that emotion rules the roost of purchase decisions. 80% of important decisions are made on an emotional basis -- the higher the risk, the greater the influence of feelings like trust, pride, fear, trepidation, or embarrassment. Real deals happen not because of product advantages, but because of feelings of need and pain. Customers' most complex, bureaucratic buying processes are usually ways to rationalize a buying decision that has been made based on "gut" or "business instinct" or ... a deep emotional impulse. What actually clinches the deal is how the customer believes he will feel after he has purchased the product or service. All the feature/benefit/advantage statements in the world will not motivate anyone to seriously evaluate and buy. This is just as true for IT products as it is for cosmetics. You just have to tune in to the emotional wavelength of the decision-makers -- whether they're housewives or geeks or CIOs. One of the best things any rep can do is really listen and match the emotional and vocal tenor of prospects. Right now, go to the ATM, take out some money, go to the store and buy yourself some empathy. What
happens if we look at the sales cycle entirely through the lens of the
customer's emotional drivers, rather than the standard rational/intellectual
perspective?What motivates them to take a meeting, let alone buy? What was going on in the 90's Remember when prospects were willing to take sales calls? What were they thinking -- why were the even answering the phone? Why would they be willing to take time out of their day? What emotional need did a sales call -- of all things -- fulfill? At that time, many parts of IT were strategically broken. Y2K was scheduled to break all of the old applications. The web was threatening to invalidate business models and change every part of company operations -- from sourcing to procurement to promotion to fulfillment. In the late 90's, there was a huge risk of not acting. There were huge strategic pot-holes. Any sane person would want to know what their competitors were up to, what their peers were working on, and what the latest technology was capable of. It was a career-limiting move to not be up to speed. It was even more important to know who the hot vendors were, in case you were looking for a new job. Who wouldn't be willing to put a bit of time in to make sure s/he wasn't missing out on something important? Because
there were plenty of motivated listeners, it was easier to start a sales cycle. Even
the smallest vendor could get things going. What happened on March 20, 2000 The Y2K rollover was an astonishment, because basically nothing happened. The Euro conversion was completed ahead of schedule in some countries. In early 2000, the VCs started making public noises about pulling back on internet investing. The NASDAQ market peak of 5048 on March 20, 2000 was a public symbol that the web was shifting gears: the tide had turned against IT vendors.
Looking at this from an emotional context, the world was put on notice that IT
was no longer in strategic crisis. There was nothing to be really afraid
of, so customers could
move into IT-conservation mode. What's been going on since What this meant was that prospects had no reason to put much time into learning from their vendor's sales calls. They could go into IT subsistence mode, buying only what they needed right now. Waves of layoffs and budget cuts in IT departments meant that nobody needed the Next Big Thing. As the vendor reps got more and more desperate, trying to meet their targets with withering demand, prospects became harassed by sales reps. Even listening to a voice mail from a vendor rep would make you cringe. The
only things of deep emotional concern over the last few years have been security
and downsizing/offshoring/ outsourcing. Any other topic could be put on hold because there
wasn't a driving business or career need. In other words, there were no
emotions to motivate the start of a sales cycle. New Horizons: Leveraging Customer Emotion Drivers (CED) So let's look at a what can get things moving: a customer's emotion drivers. What are the things that will motivate them? What are the customer's real reasons for making a commitment to buy? What do they believe is in it for them, personally? I'm going to leave "consumer" (B2C) CEDs to other authors: lots of stuff is available about getting housewives, adolescent males, "tweens," and other demographics to move.
For business (B2B) situations, three large classes of emotions dominate the employees' minds, and I've put them in priority order.* Each of these can swing positively ("I want this") or negatively ("I need to avoid this") for the people involved:
The higher you go in an organization, the more powerful each of these drivers will be. But even at low levels, people know what's good for them and their superiors. Generally
speaking, the hottest "horizontal" area in IT for CEDs
right now is in security products. Many thought that Sarbanes-Oxley compliance would be generally
hot, but I have yet to see real evidence of this. The good news is that customers vary a lot
by industry, so almost any product area may emotionally sensitive in some vertical. How, What, When... You can't just come to a prospect with a bunch of direct emotional appeals. They will not be credible or trusted. You must find the right emotionally-charged business issue. This means not just getting into the head of your prospects, this means getting into their heart. Research their business enough to know what they are afraid of, what they aspire to, what they'd "kill for." You need to know what's more important to them: losing an existing customer or losing a shot at a new one? Time to market or revenue per customer? Being a design leader or a volume leader? What this means is doing a lot more research and intelligence gathering before you talk to the prospect. Think you can't afford to spend the kind of time involved? Can you really afford the lengthy sales cycles you've got now?
Customers hate to be sold to, but they love to shop,
haggle, and buy. Obviously,
you can't have reps spending all their time educating customers and
earning trust. This early stage of CED discovery cultivation is what your marketing
department is supposed to do for you. The web site, on-line forums,
newsletters, published articles, speaking engagements and other techniques build
your credibility before you even make contact. Be excellent at this or be
prepared for long sales cycles. References are more important than technology Because of the current emotional state of customers, the decisions are made more on the basis of references and reputation than they are on technology or particular feature advantages. It's been pretty well established that assumptions trump facts, and beliefs trump assumptions. So find out what the customer assumes and believes about your sales force, your company, and your product. The good news is that the web has made "word of mouth" something that's actually measurable. By monitoring blogs, forums, newslists, Google rankings, and other web resources, you can measure where you are in the customers' mind, and what the buzz is about you. Once your sales team starts with a prospect, make sure they don't fixate on their need to sell. The whole point is to focus the needs and pains (emotions) in the prospect's mind. Ironically, the issue is not pitching the perfect value proposition: it's creating the perfect match between the prospect's pain and the value you expose. Avoid trying to close until the pain of the current situation -- and the feelings of value about your solution -- are fixed in the customer's mind. Only then is it time to facilitate the transaction. ________________ Monetizing Open Source -- coming in March
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Does
your sales team complain that they can't make their numbers because their
solution is a "nice to have" rather than a "must have?" Do
prospects not seem to have a compelling reason to buy?
Personal
Results -- bonus, raise, stock,
vacation, stature, respect/recognition, incentives, prizes, perception as a
"key player", freedom from overtime, and freedom from hassle
To
pierce the prospect's defense mechanisms (and let's face it, the walls have
grown pretty thick lately), your sales rep must build the basis of
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