The reign of the economic-buyer is called Frugalnomics, where buyers require significant ROI, fast payback and superior value from each purchase. And this trend is not expected to end, even as the recovery takes hold.
As a result of Frugalnomics and other market drivers:
- 62% of B2B vendors indicated they needed more leads in order to generate the same amount of sales,
- 72% indicated an increase in buying cycle time over the past 6 month,
- The buying cycle timeframe has increased over 10% in the past 12 months.
How Do You Fight Frugalnomics?
To effectively fight Frugalnomics, improve sales success and reduce sales cycles, new sales enablement strategies and investments may be required:
1) Engage Earlier– empowered by the Internet, buyers are doing more of their own research on-line, often having set a strategy, allocated budget and selected potential solutions before sales has been invited to the first meeting. For sales to be relevant and successful, sales teams need to engage earlier in the buying cycle and higher in the organization to help executives proactively set priorities for formal budget allocations, and be in front of strategic decisions with new ideas to capture discretionary spending allocations.
Advice> Diagnostic tools such as assessments and benchmarks can provide the driver for more executive engagements earlier in the sales cycles, when key budget and solution decisions are made.
2) Make the Case for Change - Buyers are inclined to not make significant investments or changes in a time of austerity, and as a result, sales needs to be armed with the tools to “make the case for change” and prove that there is a “cost of doing nothing”. Over 90% of buyers are now economic-focused, requiring bottom-line proof points prior to making investments. And worse, with more decision makers than ever involved in the purchase process, to be successful, you often have to engage executives, finance, business leaders, purchasing, operations and technologists, and provide compelling value messages to each stakeholder.
Advice> Sales professionals need to be armed with interactive business case tools to assess the cost of doing nothing, quantify the benefits of proposed solutions for each stakeholder, and tally the return on investment (ROI).
3) Differentiate Your Value - According to analyst Scott Santucci of Forrester, “We are in the middle of a major transformation in the B2B sales model... driven by customer's "enterprise-wide strategic procurement initiatives .... to buy only what they need at the lowest possible price.” The focus on value from each investment has never been higher, and sales teams must quantify the advantages of their solution versus the competition, or stand being knocked-out in later critical buying decisions cycles.
Advice> Differentiating your competitive value is key with economic-focused buyers. Tools that prove lower cost of ownership and superior value vs. price can help reduce discounting, counter low-price providers, and drive competitive wins.
The Bottom Line
Frugalnomics dictates a fundamental change in how solutions are sold, and how sales professionals engage with buyers, drive sales and win business. Value-based sales enablement initiatives and tools are the key to arm sales professionals with the consultative insight needed to connect with stakeholders earlier in the sales cycle, prove bottom-line impact, and quantify superior competitive value.
These initiatives and tools have been proven to drive better engagements, reduce sales cycles, increase deal size / reduce discounting and drive competitive win rates.
We are conducting a webinar with James Ninivaggi from SiriusDecisions on this important topic:
Learn more about potential value-based sales tool solutions at: http://www.alinean.com/SalesEnablement.aspx
IDC Executive Tele Briefing on Sales & Marketing Strategies for 2010
Uncovering The Hidden Costs Of Sales Support, Forrester Research, Inc., April 2009