Tl;dr - We often complain that prospects can't bring themselves to make important decisions to buy our stuff. And we're often hypocritical. We suffer from the same problem. Most industrial companies refuse to change existing marketing, sales and technology conditions. By changing our own culture we can learn lessons, help buyers, and improve results.
Your Biggest Sales Barrier Is Also Holding You Back
For most B2B sales teams the biggest competitor is the status quo. Sales is about helping people recognize the imperative of change. The default is to complain but maintain.
That's true for your buyers.
It's also true for your own revenue growth function.
The very same cognitive biases and organizational dynamics which make it very difficult for your team to sell your products probably prevent you from improving how your company goes to market.
In other words, your greatest sales challenge hits you twice. Once externally with prospects and again internally.
Most companies are in the value protecting business, regardless of how strongly they protest that they're into value creating. That's often especially true of many companies that follow this blog - closely held traditional middle-market industrial manufacturers.
It's also true of your customers.
That's simply fact.
The tension between stability and change; between risk aversion and insights; between the status quo and new approaches is reflected in your customer's discussions about your products and your internal discussions about improving your sales efforts. We all have similar cognitive biases.
- Good managers want predictability and things running smoothly
- Companies say they want insights, but insights are inherently in conflict with beliefs
- Trying something new may be a mistake (wrong, poorly timed, improperly executed) and that is public and costly to egos and organizational stature....but nobody will know if you had an insight, could have tried something, and didn't. It's safer to ignore them
- Companies are focused on reducing errors. While they say they want innovation and insights, the focus is on avoiding missteps
- Insights cause change - structures, budgets, org charts, organizational capital, etc. all resist change
I suggest taking a bit of time to listen to this podcast episode for some more background. Then we'll talk about how this impacts your sales results, and your industrial sales effort.
There are also notes available on the podcast episode as well.1
Risk Aversion and the Status Quo
The fundamental question is whether what's gotten you here, will get you there.
Your prospects ask that question of themselves when they consider your overtures and quote. The "what's gotten us here" could be a competitor's product if you're selling capital equipment in a knock-out play to a long-time customer with a large installed base of competitor's machines. It could be an MRO consignment supply arrangement or payroll service.
It's the solution they have now that they know isn't perfect (because nothing is) that isn't costing them much time or aggravation at least consciously. They've got too much on their plates that must be dealt with now. Yesterday. And there's no bandwidth to think about something that they legitimately believe to not be broken. Or even not be in the priority list of their top breaks.
But it's not just your prospects that ask the question.
You, your executive management team, your board of directors and your staff ask that question of yourselves when you consider alternative approaches to revenue growth. Your "what's gotten us here" could be the current sales force that has a lot of mediocre performers who routinely miss quota. It could be a blog that doesn't drive traffic, an agency that still can't really understand your industry, an SEO or paid ads vendor that doesn't do much, but does a bit more each month than your team could. It could also be the current approach to sales training - monthly meetings with discussions of pipeline and technical features, or the annual lineup of tradeshows about which the biggest debate is booth size and location.
After all, you're selling enough. For the last couple of years you've probably sold more than you could build and ship.
So for you internally, just as for your prospects in your sales pipeline, the same challenge exists. Real-world cognitive biases including recency bias and status quo bias lead you to assume that what's worked will likely continue to work; to minimize the prevalence and significance of contrary indicators; and to magnify potential disruption of change.
Add in a bit of Dunning Kruger effect that leads us to falsely believe we have knowledge and insight in areas where we are actually quite ignorant, and the problem gets larger.
And finally, pile on loss aversion psychology which Kahneman found leads us to feel losses 1.5 to 2.5 times more accurately than gains. This exists in each of us individually and weighs on how we allocate our time and attention to priorities as well as explicit decisions. And it exists in the organization's collective mindset which seeks to minimize public mistakes which are obvious, painful, and expensive.
That's why most organizations are "value protecting", particularly those with Gen2 & 3 leadership and tight family control, or lots of mid level management jockeying for promotion, or those with very traditional cultures.
Most companies boast of a "value creation" culture. And most roll with the status quo until it's clearly untenable - a point after which damage has been done and/or significant opportunities squandered.
That's true of your prospects. It's why sales is so hard and why sales training to help uncover compelling reasons to buy is so critical.
And it's true of you and your company which is why you have chronic challenges in revenue growth including inconsistent revenue, unreliable forecasts, deals lost to no decision, lack of insight into marketing effectiveness, underperforming territories, etc.
So doesn't it make sense that if you want to improve your ability to help prospects achieve clarity and make decisive moves that will improve their business, you and your team have to build that muscle first?
Overcoming Cognitive Biases to Improve Your Buying Process
And that means improving your buying process.
This will take several parallel efforts. It is both a cultural change and a process one. You'll have to:
- set KPIs for new insights and identified opportunities for improvement, and a regular review process
- create a process to fully assess direct and indirect costs and benefits of implementing a change
- create another process to call out the internal status quo that's disguised as caution (e.g. when sales reps say they don't have time for training, to surface their hesitance and disdain, or when IT argues against marketing having direct control over marketing automation software or sales implementing a CRM that's not part of their ERP project, to drill down and expose their concern about losing control)
- change buying team criteria so that minorities of individuals with conflicting personal and departmental priorities can't block changes (this becomes much less prevalent when you call them out as above)
- use premortems to make better decisions, and AARs to review the net impact and where decisions were on or off track
- publicly celebrate examples of change - including measurable impact. Even the ones that don't deliver what you expect
- hold each other accountable - that includes senior management who hide behind excuses as well
As you're doing this you need to very publicly share that you are simultaneously pursuing two goals. First, to improve your business. Second, to avoid the inherent hypocrisy in expecting prospects to respond to you more rationally than you do internally or to your prospective vendors.
Then, in weekly sales meetings you need to include an agenda item to explore examples you've uncovered of how cognitive biases impacted your company's buying decisions and how you've worked to overcome it.
Finally, during sales and marketing working sessions you need to draw on these examples and discuss analogs in how you market and sell, and again embracing change, develop tactics and approaches to embed those lessons learned in how you go to market.
Overcoming Cognitive Biases to Improve your Marketing and Sales
I believe (OK, my own cognitive biases probably at play here) that the biggest challenges most B2B industrial companies face are in how they sell. 30 years ago it was manufacturing and operations. But best practices are so clearly understood now, and broadly implemented, that the core operational functions are much more explicitly understood and managed.
Oddly, however, that rigor hasn't generally been applied to the top line functions of strategy, marketing and sales. Revenue growth operations are run much the same way as in 1990 - with a website on top.
Therefore there are some important steps to take as you build the culture of value creation in decision making to counter the bias toward value protection. These can all be thought of in the context of the process engineering work you've done in manufacturing.
Engineer the Sales Team
As you improved operations you discovered that some valued and long-time employees weren't able to make the transition with you. With a heavy heart you parted ways and you gradually built a team with the necessary skills and mindset.
The same is true of your sales team. But you probably can't accurately identify those that will be top performers. Today's revenue isn't an accurate indicator. Often senior reps have the best accounts, biggest territories, get the fastest technical sales responses, etc.
So let's use data and science to make good decisions. Understand the strengths and weaknesses of all team members by using a sales force evaluation. Then refine your sales process, improve your sales methodology, invest in sales training, and begin to continuously recruit so that you can snag top talent to augment the team and don't hesitate to make changes because you don't have ready alternatives.
Invest in Marketing
Buyers today expect digital experiences. They expect to be able to research on their own. They seek to understand options without sales pressure.
So, while you should build content, experiences and technology to encourage direct contact in formats that support their expectations (e.g. live chat) and also give your sales team a chance to engage, ultimately you have to meet buyer expectations.
That takes more than trade shows and journal ads. It takes more than a brochure website that you update with a ponderous project every 5-7 years.
You have to invest in digital marketing and content.
That means spending more than you ever have on marketing.
The good news is that you'll be able to redirect some funds from underperforming sales and trade shows. Further you'll have data and metrics to help you quantify the return of every dollar spent. But the bad news is that every fiber of your being, bolstered by biases, knows that you've grown your company on sales and not marketing. So you're not really convinced.
And there are so many "experts" and charlatans who tell you to use their silver bullet - social media, a blog, SEO, paid ads, etc. - that you're profoundly skeptical of any recommendation.
That's why you're building a culture of value creation so that you'll make more enlightened decisions here.
Invest in Technology
But that's not enough.
You're also going to have to hold people accountable to use the tools, to log opportunities and consistently update them in the CRM, to provide appropriate reports and review them consistently to inform decisions, etc.
Modeling, Learning, Selling
Stop complaining about how buyers can't understand why they should embrace change and buy what you sell.
Start to walk the talk yourselves. Model the embrace of insights and value creation that you expect of prospects.
Learn important lessons as you proceed, codify the lessons, and deliberately incorporate them into your marketing and sales activities.
And then use those lessons learned to improve the way you sell - or rather become more effective at helping prospects buy well by benefiting from your internal culture change.
Cognitive biases impact your buyers. You know it and complain about it.
Cognitive biases impact your top line revenue growth effort every bit as much.
Improving your efforts will provide insights and improvements that you can share with prospects, providing differentiating value in their buying journey, and improve B2B industrial sales results.
1 - Podcast notes