Wednesday, November 30, 2011

How will the Economy Affect the Buyer’s Decision Process in 2012?

Anyone who has driven a corporate purchase decision knows that it can be a frustrating and long process, one which many buyers wish they could streamline. However, continued economic uncertainty will make this desire hard to fulfill.

Frugalnomics is in full effect, leaving few resources to evaluate opportunities and the organization risk adverse to change, giving more control to finance and requiring more economic justification on each proposal. Serious budget constraints make even high ROI projects hard to get approved.

Solution providers that can help facilitate this ever more difficult process will have an advantage in 2012. So let’s review each stage of the process, how the current conditions are making the journey more difficult, and how B2B solution providers can optimize their content and engagement practices to help facilitate and shorten cycles.

Optimizing Content to Facilitate the Economy-Focused Buyer’s Journey
The Buyer’s Journey represents a set of steps an organization needs to go through in order to make a purchase. The steps may vary based on the organization and purchase, but a typical process includes a set of phases, especially Discovery, Consideration and Decision.


You can think of the journey as a complex change management process that can be difficult, frustrating and time consuming for the buyer, therefore, the more facilitation provided by the solution provider to streamline and remove friction from the process, the better.

Discovery
In the first part of the buyer’s journey, decision makers need to be convinced that the status-quo should change, and the buyer must convince not just themselves, but many other stakeholders that the change is beneficial and worthy.

In today’s do-more-with-less environment, most organizations are doing all they can to keep the lights on, much less consider new projects. In such a stressed environment, buyer’s might be feeling pain, but not have the resources to address, and in many instances are not self-aware of what ails them.  For those that are aware of issues, convincing the multitude of stakeholders in the organization and finance to make the necessary and precious investments can be a challenge.  After all, for most organizations it is easier and less risky to do nothing, than to change from the status quo.

At this critical stage, defining the vision for the project, most buyers are researching options on their own, and not involving sales in the process. However, it is during this early phase that buyer’s indicate establishing strong provider preferences, with Forrester indicating that 65% of vendors who create the buying vision during these early phases of the journey getting the deal. For many solution providers, lack of engagement means a “failure to launch”.

Solution providers can help facilitate the decision making process during Discovery in a number of ways, including:

·         Guiding understanding and prioritizing of issues – helping the buyer to confirm that the pain they are feeling is real and should be a priority, and helping illuminate issues of which they might not have been aware. This can be done best via research and case studies, helping the buyer realize that others are experiencing similar pains, that these issues are a priority, and that solutions exist to meet the challenges. Diagnostic assessments are even more provocative, surveying the buyer on spending, goals and priorities issues, capability and maturity to understand where they are currently, benchmarking them to best practice leaders and peers to identify and prioritize issues, and prescribing specific solutions to remedy the highest priority opportunities.

·         Quantifying the cost-of-doing-nothing – many organizations won’t change unless they understand that maintaining the status-quo has a cost that exceeds the investment / risks of change, and the cost-of-doing-nothing is high enough to make the project a priority.  Research papers and case studies can be used to help convince buyers that not changing has significant cost, TCO calculators can be used to quantify the current costs in comparison to costs post change, and benefit estimators can be used to quantify the savings and incremental value available, but not being realized.
Consideration
Once a buyer has committed to change and prioritized the project, the decision makers need to research possible solution approaches and create a short-list of specific providers. During this phase it is difficult for buyers to wade through the copious amounts of research and marketing materials to understand the various advantages and benefits that each solution approach might provide.

Solution providers can help facilitate the Consideration phase, providing content and engagement tools to help:

·         Quantify the incremental benefits and TCO of various solution options – to help buyers understand the differences amongst various solution approaches, solution providers should provide research, case studies and analysis tools to help buyers understand the various competitive options and advantages of different approaches, quantify the total cost of ownership (TCO) differences, and illuminate the incremental benefits of the solution compared to other solution alternatives.

·         Provide Solution Demos and Trials – spoiled by consumer “try-before-you-buy” options, prove the capabilities of your solution versus others with demos and trials.
Decision
In the final stage of the buyer’s journey, the procurement team must reach consensus on a particular proposal, and gain selection approval from the many stakeholders involved in the decision making process. Finance in particular has become more involved in economic justification and the final vendor selection process, providing more price pressure and financial diligence.

In the final Decision best-value bake-off phase, Forrester indicates that 35% of vendor selection decisions are made, making it more important to get connected and engaged in earlier phases. However, many deals get stalled by a failure to overcome objections and drive consensus during this phase, making it vital to effectively address.

To make it easier for stakeholders to grant approval, risk must be mitigated and justified, with the solution provider providing content and engagements to:  

·         Provide financial justification – providing the research, case studies and ROI tools to help quantify the required investment, benefits, ROI, payback and other key metrics that financial executives need to make the case for change;

·         Quantify price / value trade off – delivering comparisons that prove competitive advantages of the selected product / service, especially quantifying the total cost of ownership (TCO) advantages, incremental benefits, and lower risks.
The Bottom-Line
Buyers continue to be challenged by the economy in 2012, making it more difficult to make investments and drive change.  Buyers are looking for solution providers who can help facilitate the buyer’s journey, helping uncover and prioritize opportunities for improvement, recommend solution options and justify decisions.

Solution providers have a unique opportunity to help facilitate this ever more difficult buyer’s journey with content and engagement practices to help facilitate and shorten cycles. Throughout the journey, marketing and sales engagements can provide content to help facilitate change and the decision making process, especially research insights, case studies, diagnostic assessments, benefit estimators, demos and trials, ROI business case and TCO comparison tools.

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