The Real Danger of the Down EconomyThe Staff of the Corporate Executive Board
For many B2B sales and marketing executives, 2010 started out as the best of times and ended right back at the worst of times. Things looked pretty good through the first half, and then, 'round about June, it all slipped away.
While business is still coming in the door, every deal ends up as an absolute battle: a hard-fought, resource-intensive, unpredictable adventure with more twists and turns than a blindfolded roller-coaster ride through a dark cave. One that, more often than not, leaves you stranded somewhere along the way, wishing you'd never gotten on in the first place.
Welcome to the future of B2B sales.
In the Sales and Marketing Practice at the Corporate Executive Board, extensive research on B2B sales and marketing organizations—and more important, B2B customers—tells us that the world of sales is changing radically. Not because of the down economy but rather irrespective of the down economy.
Somewhere over the past five to 15 years, most companies have shifted to some sort of "solutions" strategy, at least for their most important customers. What's only just now becoming clear, however, is that this shift in selling strategy has led to an opposite and equal shift in buying strategy.
As suppliers seek to sell bigger, more complex, more disruptive, and yes, more expensive "solutions," B2B customers are naturally buying with greater care and reluctance than ever before, dramatically rewriting the playbook in the process. These customers are:
pushing purchase decisions ever higher in the organization (in some cases, from the chief executive all the way up to the board itself);
insisting on significantly greater consensus across their teams before committing to a deal, raising sales cycle times dramatically as well as the risk that someone along the way will say "no;"
aggressively looking for new ways to push risk back onto suppliers;
• demanding increased customization (for free);
turning to third-party consultants to identify new ways to "drive cost" out of the purchase decision, sometimes going so far as to audit prior years' contracts.
While the down economy exacerbated these trends, it didn't cause them. And when the economy turns around, these trends won't go away. Any strategy built primarily for short-term survival will leave a supplier painfully unprepared when economic recovery does nothing to reduce the extra time, money, resources, and creativity these trends require.
So what's a quick-hit answer? Put simply, there isn't one.
Extensive research indicates that the companies best prepared to win in the long run are using the down economy to reposition themselves to compete better over time.
Their weapon of choice? Insight.
Again and again, research indicates that—despite their reluctance to buy—customers eagerly look to suppliers for one thing: a better understanding of how they can compete more effectively. They want opportunities to save money or make money in ways they themselves have yet to identify.
Customers don't want to buy your solution; they want to beat their competition. And the suppliers best positioned to teach them how to do that will dramatically outperform over the long run.
To do that, however, these suppliers are completely transforming how they go to market: core value propositions, segmentation strategies, commercial messaging, ROI calculators, rep skills, and sales manager competencies. They use these means to align the commercial organization from top to bottom around one thing: the generation and delivery of commercial insight to customers in a way that teaches those customers new ways to compete more effectively while showing them how the supplier's solution is dramatically better suited than anyone else's to help the customer make good on the insight they've just taught them.
And along the way, these companies have all discovered the same thing. While "leading with insight" sounds like what they've been doing all along, in practice it's radically different.
For more information on these strategies, you can visit CEB's Executive Guidance for 2011 Resource Center.