It’s the most frustrating of experiences: you found a potential customer, the customer’s issues align well with your solution, your deal desk has worked on the RFP, you know their management committee just met, and then nothing. You didn’t lose, exactly, they just decided the timing wasn’t right.
“It’s not you…It’s me.” A phrase painful to hear in all aspects of life. Your customer sounds almost as upset as you when delivering the bad news. They clearly regret the time and credibility spent on trying to make this purchase happen.
In this blog, we explore the flip-side of our research on drivers of customer purchase. In essence: what stops the buying group from completing the journey? What makes ‘no deal’ the better option?
Sadly, ‘no deal’ happens quite frequently. Our recent study of buyer preferences found that a full 38% of purchase attempts end in ‘no deal’. The buyer abandoned the purchase and decided to live with the pain.
WHAT STOPS CUSTOMERS FROM SIGNING THE DEAL?
How do these ‘no deal’ decision come about? We asked customers who recently reached ‘no deal’ to assign percentages to the following reasons for their decision:
- The likely disruption a purchase might cause to the broader business
- The lack of a sufficient budget
- The inability of stakeholders to come to an agreement
- A push by purchasing or another stakeholder to defer the purchase
- Uncertainty around the ROI of the purchase
In terms of percentages, lack of budget is the single largest driver, at 25.7%.
That’s useful, but we also wondered if patterns existed within the data that would link these reasons into profiles. For example, if something was perceived to be disruptive, then it would stand to reason that this might also stop stakeholders coming to agreement around it.
FOUR REASONS FOR NO-DEAL
Sure enough, when we looked deeper, we found four types of no-deal decisions with one of the following four reasons being cited as the most important single reason.
- They don’t think the value (or ROI) is there
- Stakeholders couldn’t come to an agreement
- The purchase was perceived to be too disruptive to the broader business
- They couldn’t find the budget
The distribution of these four reasons came as a surprise. Our expectation was that most ‘no deal’ decisions would be about budget. Instead, we found the following:
A full 58% of ‘no-deal’ scenarios are based on an inability of stakeholders to come to an agreement. Lack of budget, is the second-most important reason. Uncertainty around ROI, and worries about disrupting the broader business come third and fourth, respectively.
This is a classic good news, bad news scenario. The good news is that budget might be much less of an issue than is typically assumed when it comes to B2B sales. Lack of budget can be painful, but it’s not as frequently a deal killer as many assume.
The bad news is that sellers are not effectively managing different stakeholder interests and bringing the buying group to a collective ‘yes’. Worse, objections from buying group members aren’t being surfaced until too late which leaves sellers unable to address them within the window of opportunity.
THE DEAL BEGINS AND ENDS WITH THE SELLER
Sellers need to be more proactive in terms of surfacing customer needs and prescriptive in solving them. This goes back to our previous blog. If sellers don’t engage early, they risk encountering a buying group with an incorrect, but deeply entrenched, understanding of their problem.
If started wrong, the buying journey will be very hard to steer right and ‘no deal’ is a strong possibility. It’s far better to build buyer group consensus from the outset (problem identification), then point and guide them together toward your solution.