Major sporting competitions all have their qualifying stages. Watching the finalists compete, it can be easy to miss how much work even losing competitors had to put in simply gunning for a spot at a major tournament. In golf, for example, some of the best players in the world may not stay for the weekend.
A similar qualifying round in sales is where I’d like to focus my attention with this Insight. Looking at the number of sellers invited to compete on a deal has some profound implications for the sales process, and provides visibility into the purchase processes, and forecasting done against these processes.
There’s a good chance that most companies spend too much effort on the visible aspects of a sale (that final presentation) and not enough effort on the early qualifying stages. Perhaps they treat these as throwaway events where you play the odds, hoping few who are better prepared show up and you compete by default.
How much competition are sellers up against?
The data for this finding comes from Challenger’s recently conducted B2B purchasing study which takes a new look at purchasing from the buyer’s perspective. We will be gradually releasing our findings across the next few weeks, leading up to the culmination with a webinar on August 20.
In the meantime, this notion that B2B selling is like participating in a major sporting event comes from asking buyers how many vendors they seriously considered when they were engaged in a competitive purchase:
At first glance this distribution might seem as expected (the mode is the typical 3 bids) but think about the dynamics: in most instances sellers are going up against only one or two other companies when there are many who could be involved. It will be rare that a buyer actively considers even a fraction of possible contenders.
Behaviorally speaking, that makes a lot of sense. Humans naturally find a large number of choices paralyzing and it’s sensible to constrain choice in an effort to avoid that paralysis That is doubly true when a large number of people are involved in the decision making around a purchase.
The competition begins at the start
For B2B, however, the implication is that success is heavily dependent on the very beginning of the customer’s buying journey – when they first decide who to invite to the dance. Sellers may miss out when their focus is too much on the final showdown and not on making the first cut.
We have to treat every FSI (First Sales Interaction) with the importance it deserves. The very best message, delivered powerfully to the right audience of stakeholders helps to make the strongest possible first impression. The interaction should be coupled with engaging marketing-delivered content that reinforces the insight from sales.
A healthy sales pipeline, that can be accurately forecasted, is part advancement and close rate of opportunities in play (where sellers are competing for the win), but part conversion into opportunity (where sellers are invited to compete in the first place). If we look closely, we may find ourselves sitting out of the final showdown much more than we should be. Let’s instead play to make the cut first and play for the win once we’re there.