As a business leader, there are a lot of times when you have to take a decision on pricing which results in losing a deal.
I have had to take many such decisions and the sales persons involved in the deal get really upset since they misses their target because of that decision.
See, its very easy to discount to win a deal, but if after winning the deal you’re not able to execute because it’s way out of budget then you get a terrible name. In B2B, if you fail to deliver or deliver badly, then you can be sure that you will not get business from that company again and if the manager involved in the decision , goes to some other company, she will ensure that you do not get business from there also.
I have had a couple of instances where we lost the order, then the vendor who was awarded, did not deliver and after one year of struggling, the customer called us back and gave the order without any negotiation.
And since we did a good job there, they gave us multiple more cases.
The advantage of B2B is that once you do a good job, then generally, the managers want to keep working with you. The inertia and the political situation in the organizations mean that a manager doesn’t want to try a new vendor if she can.
So even if you have to lose a deal, its okay because you will get many opportunities to win. But if you do a bad job, because you don’t have the money in the deal, then you will lose the client forever.
Till next time then.
In my earlier post on this topic I spoke of the challenge for a new vendor to enter into an organisation. But there’s a positive side of this story. Once you enter the organisation and do a good job and the customer starts trusting you, then you will stay in that organisation for a very long time. Decisions in organisations are rarely impulsive, therefore they will always prefer to go with the vendor who is an incumbent and whom they trust.
So how do you build trust & reduce the fear-
- Ideal situation is when you have enough other customers vouching for your product or service. If they are from the same industry as the prospect you are targeting, even better.
- Provide continuous education on what’s new and what they could be missing – there are three things in this sentence. First is “continuous” – you have to be reaching your prospects regularly and creating an impression in their minds, so that when the time comes and the incumbent is not in a position to provide them the service, they reach out to you. The Second item in the sentence is – “What’s new” – keep talking about the new technologies, new case studies etc. so that the customer understands that you are doing a lot of work and others are trusting you. And the last item is on “What they could be missing” – with their existing supplier – this is to create a wedge, start a cycle of dissonance with the incumbent. This could be a simple thing like talking about how at each of your other customers’ premises you provide a dedicated project manager to ensure smooth operations. Now if the incumbent is not providing this facility, then the customer will start getting a feeling of missing on a service.
- Always be upfront in what you can do very well and what you can’t do. When you first get a chance – it could be a trial or a Proof of Concept, never do anything in this phase which is not your best item. Only when the prospect gets convinced at this stage, will they decide to move forward with you.
Out of the three points above, with marketing you can systematise the second point and ensure that there is constant education happening for the prospects. This background activity will slowly result in your name becoming more familiar. With familiarity, some amount of trust starts developing. As the trust starts getting built, they may start inviting you to discuss on things which they are coming up with to see if they can accommodate you.
Till next time then……
In every relationship TRUST is a very big factor.
In a B2B situation , its an even bigger issue ,because the person who’s going to be your sponsor for whatever your product or service that you sell, cannot afford to fail.
The fear of failure in B2B environments is even bigger than when you deal with consumers. Any B2B environment whether corporate, government or semi government, all have multiple hierarchies involved.
So the person you deal with can’t afford to fail in front of her peers, in front of her boss and her boss can’t fail in front of her (the boss’) peers. The larger the organization the bigger the problem.
That’s one key reason why there’s so much inertia in making decisions in organizations. This inertia causes large organizations to fail in the long run, which is another story.
For a product manager or marketing manager or sales person, its not about how good your product or service is, its more about how much does the prospect TRUST you. Fear falls only when Trust increases.
If you can’t build the Trust, the prospect will go with the incumbent vendor or technology or partner because then at least people will not directly blame her for failure. There used to be a saying in IT circles ” No CIO got fired for choosing IBM” . IBM was the default standard at one time for information technology. They were more expensive than most, but still picked up business because they were trusted.
As a product or marketing person, your primary responsibility therefore is to figure out, how you can build trust around what you “sell”, that will ease the process of getting traction in the market. If you see some of my earlier posts, I have spoken about how education is one of the best forms of building trust.
Till next time then.
In a lot of companies there’s always a tug-of-war between sales and marketing. They are considered to be two independent functions.
My way of looking at it, is a little different. I have always considered marketing and sales as one consolidated function. Maybe this has to do with my predominant background in B2B rather than consumer.
As I look at it , the job of both the functions is to get a client for whatever you make. If that be the case, then a sales person’s job is to sell face to face and close a deal. Are you still with me. However a sales person has limited bandwidth.
Whenever you’re entering a new account, that customer will do business with you only when they trust you.
This where marketing comes in. It helps you build trust and creates the environment, so that the sales person is able to close more deals faster. So its like “canning” whatever the sales person does on a mass scale, without getting in front of the customer.
With marketing the advantage you get is that you can automate a lot of the tasks, which would not be possible with sales. This allows you to create non-linear growth for your company.
Now I am not sure, if large companies would look at it this way or consumer focused companies would look at it like this. However if you’re an emerging company in the B2B space, this kind of a model will give you both efficiency and effectiveness.
Till next time then.