I am a sucker for revenue growth.
On (most) occasions, revenue expectations do leave me with a bad taste. Some situations are vivid. Last Thanksgiving, a seller was on the verge of closing a deal successfully. And guess what happened? - ‘Closed Lost.’
It was crushing. The sales rep was devastated, understandably.
He had been working on a large enterprise deal for almost a year. It must have been one call every week across demos, technical evaluations, and checklists. The buying process had progressed through thick and thin. We were in the final stages of product evaluation with another competing Product B. Since our Product A was far better in terms of addressing buyer requirements, we had placed our chances of winning the deal at 90%. The deal was won surprisingly by Product C. Don’t ask me why? Our buyer champion confided in us that the Founder of Product C was their CEO’s golf buddy. Guess what? We are now talking to the buyer champion again and looking at a go-live within the next 2 months.
This is just one transaction. There must be many in which we may not have gotten this lucky. I am sure you would have enough examples of deals that ‘Closed Lost’ for no good reason. All this was happening after investments of dollars and man-hours into sales CRM, sales enablement, sales systems, and sales ops. What a waste of time, energy, and money!
I kept thinking. If only we had engaged the executive buyer earlier in the conversation. If only we had given them competition comparison cheat sheets when they needed it. If only we had a better picture of the internal buying steps. If only we had co-created the value proposition along with the buyer champion!
I am sure you have heard the buzzword ‘collaboration’. Co-creation goes beyond collaboration. It calls on teams with differing agendas (sometimes opposite) to align. Co-creation could transform how buyers and sellers come together to co-create value. It is indispensable in sales. Because in sales, unlike other functions, value or outcome itself starts off loosely defined, and so is the process. This makes most sellers and buyers nervous. Perhaps that is why 40% of B2B deals end up in no-decision. Good sellers know how to challenge their customers to uncover value. They also know how to be a coach. They know how to make a bunch of people work for them even though no one reports to them - sales management (internal) and customers (external). The following examples offer some inspiration.
In 2004, Late Professor C.K. Prahlad and Professor Venkat Ramaswamy published their transformative book on co-creation, The Future of Competition: Co-Creating Unique Value with Customers. It encouraged businesses to think very differently about business strategy, especially with the continued explosive growth of the internet. The book propounded “co-creation” in the new economy, where businesses and customers would come together to design and deliver products and services based on individual preferences plus the need for better experiences.
The work of the two professors centered around value creation. The professors argued that the unilateral approach to value creation by the producers would not hold. The intimate involvement of the firm and its customers is fundamental to creating the end customer experience, which is the measure of value creation. The professors propose the DART framework as the minimum to make co-creation a success.
It is not difficult to see how the buyer-seller B2B process could also benefit from the DART framework of co-creation.
The professors also highlighted the importance of business strategy in sustaining any co-creation initiative. For example, measuring customer experiences in a systematic and structured manner through competent teams would ensure continuous improvement towards co-creation objectives and goals. The book rightly points out the dilemma when dealing with customers who may prioritize appropriating value versus collaborating to create it.
Let's talk a bit about bank relationship managers. And how co-creation has existed in the space of wealth management. Relationship managers with a savvy approach to wealth management would conduct a financial planning exercise consisting of the following.
The relationship manager and the client collaborate to co-create a financial plan that attempts to achieve the client’s financial goals. In turn, the relationship manager hits quota to earn commissions from the financial products that the client subscribes to.
The above examples show two different parties coming together to create and maximize value.
Perhaps, sellers could achieve more by doing less of what they have been doing to date. Persistent calls and aggressive follow-ups are giving way to meaningful, timely dialogues catalyzed by a desire to add value to the buyer. It is time to shift focus from contract to contracting. Additionally, sellers should continue following the best practices and success principles in sales - prospecting, quick lead response, leveraging sales enablement, and following internal sales processes. To further co-creation, sellers should prepare to change on the following counts.
The buyer’s journey continues to be a concept. It has traveled to a few places. There is the awareness, consideration, and decision stages model. The AIDA (Attention, Interest, Desire, and Action) model has four stages associated with the journey a prospect takes to become a customer. The entire internet and the analysts (Gartner, Mckinsey, BCG) have all written at length about the confusing and evolving nature of the buyer journey. A clear consensus has been reached on not what the buyer journey actually is, but what it is not. Almost everyone agrees that the B2B buying journey is NOT a linear, sequential, step-by-step process. Gartner has correctly called the buyer journey “looping”, where buyers visit and revisit various steps that constitute the buyer journey.
All this “looping” undoubtedly is driving sellers crazy. Instead of driving sales stages, sellers have to now contend in helping buyers accomplish their “buying jobs.” It is a trade-off. Sellers have to manage not just quota but also questions from buyers. Instead of driving their agenda, sellers have to align with the buyer’s agenda. Surprisingly, this alignment could come with quota achievements. A May 2020 article in the HBR quoted a 2019 study by Xactly that hinted at gains from such an alignment. The Xactly study reported 86% of women achieved quota, compared to 78% of men in B2B sales. The research backed by ZS indicated that high-performing women sales leaders were more likely to connect, collaborate and shape solutions, overdriving outcomes, unlike their men counterparts. Another validation of the need for co-creation.
The best salespeople know the customer's business more than the customer and can connect the dots between their solution and the customer's pain points with ease. Most have transitioned to playing consultants. They are not just pushing content but are also constantly educating the buyer with new ways of doing things. Buyers are quick and smart to recognize the ones that desire to truly add value.
Early this year, Mckinsey published research covering 3,755 B2B decision-makers across the world. The research looked at how B2B is going omnichannel, for good. 83 percent of the B2B leaders say that omnichannel is far more effective than traditional methods. At the start of the pandemic, this number stood at 54 percent. 31 percent were comfortable signing up for deals above $ 500,000 remotely, without any in-person contact.
Omnichannel is becoming core to B2B sales, and understandably so. The primary reason has been the pandemic. Overnight, B2B sales were thrown into a remote-only digital mode of interaction. An in-person meeting was not even a consideration anymore. Both B2B buyers and sellers flexed to newer digital ways of doing business remotely. New paradigms emerged as B2B buyers extended their B2C self-serve digital behavior to B2B sales transactions. Then as lockdown restrictions were lifted, in-person meetings made it back to the calendar. B2B decision leaders also discovered that omnichannel was a better way of doing business than the traditional “face-to-face” approach, which was costly and unproductive.
With buyers going omnichannel, the pressure to change is on the sellers. Going forward, sellers need to be ‘hybrid’ sellers. ‘Hybrid’ sellers are expected to be available for in-person meetings (occasionally), remote video calls, and all possible customer touchpoints - chat, email, and apps. And it is just getting started. 85 percent of the B2B leaders surveyed said that they expect hybrid sellers to become the most common sales roles in their organizations over the next 3 years.
Omnichannel and the corresponding ‘hybrid’ seller disposition naturally create and enable opportunities for buyer-seller co-creation. Let's take the buyer’s perspective first. Externally, the pandemic has created market uncertainties. Internally, there is pressure on the buyer to take C-Suite purchase decisions. This ambiguity has encouraged buyers to solicit one-on-one advice in addition to the overwhelming internet research. From a seller’s point of view, this is good news. It throws the buyer right into the seller’s territory. A well-prepared seller can now demonstrate leadership to drive value via co-creation.
In B2B, you will soon come across this statement, “Selling is easy; buying is hard.” True, but what about the sellers? Sellers are really taking it on the chin. Conflicting demands in balancing quota and overzealous buying groups are making selling teams desperate for help. Co-creation via buyer enablement could help selling teams address this dilemma.
Gartner is rightly credited for the term ‘buyer enablement.’ Gartner has written extensively about how hard B2B buying is. 77% of the 250 B2Bs Gartner surveyed rated their buying experience as extremely complex or difficult. Buyers are also willing to spend three times more with less regret if they perceive the received information as helpful. All the steps sellers take to ease the pain of buying constitute ‘buyer enablement.’ Large enterprises have been doing it for years, with the buyers and sellers working closely to co-create value. Value in the automotive industry was created with this approach. Mid-market companies and startups are now seeing the merit in it. Ironically, the new learning from the old.
But, not everything is figured out yet. Co-creation with buyer enablement will evolve. It will also need a mindset change. After all, the idea of buyers and sellers working together is anathema, still. Thus, buyer enablement could take a while before it hits the greens, eventually.
3 Types of Buyer-Seller Relationships
Transactional (distant) relationship.
Value–added (continuing) relationship.
Partnering / Collaborative (close) relationship.
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