My recent post, Why Customers and Suppliers Collide was received very positively.  One re-tweeter called it “THE most important thing anyone in sales can read” (thanks @Davidabrock). Over the many years I’ve observed the interaction between sales people and their customers, I’ve often thought that a lot of progress could be made more easily if the sales person really truly considered the emotional journey that a customer takes when making an important buying decision.

To consider the practical implications of that emotional journey I’ve tracked it through the different stages of a sale, what I call the Four Phases of the Buying Cycle.  I hope you find this valuable.

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The Four Phases of the Buying Cycle

All though the professional buying cycle, customers are concerned about risk and the price of your offering. They seek evidence that you are the best supplier, and need to be assured that you can meet their needs. However, the customer’s primary emphasis changes throughout the buying cycle and they focus on different concerns at different times. It is important to know where you are in the cycle and to understand what’s occupying the customer’s mind at that time.

In a potential departure from traditional wisdom, I have segmented the buying cycle itself into four segments, to include Post-Sale activity for the sales professional. More than ever, a sales person’s key asset is his customer, and it is my belief that he needs to be involved after the deal has been consummated, to maintain the relationship. In the graphic, I chart the relative importance of each concern through the process (a full circle represents high importance).

The stages in the buying cycle are:

1. Early in the procurement cycle, the customer will briefly check on price to make sure your offering is in the general area of his expected budget. At this point, it’s all about his needs, his wants and his process. Getting past the first checkpoint requires that you pass the first features test. Can your offering meet the needs of the customer? If not, the price doesn’t matter. So far the customer has little risk, as no major irrevocable decisions are being made. This is the Requirements phase of the buying cycle. Your opportunity to shape the customer’s requirements is strongest in this phase of the buying cycle.
2. Leaving the Requirements phase behind and entering the Evidence phase, the customer now requires very specific data from you to substantiate your claims that you can meet the needs that he outlined. You must prove to him that your solution is all it’s cracked up to be. As he invests more time, his risk is increasing but his focus remains pinpointed on your evidence. This will probably include detailed examination of your offering, reference calls to other customers, future support, product vision and more specific price discussions. Likely as not, the customer will reduce his list of potential suppliers at this time. It’s still like buying a car or a house. You’re down to a choice of two or three, all of which meet your needs, each with sufficient evidence to assuage your concerns about whether you’re getting everything you expect – but now you’re getting a little nervous.
3. As the customer is making the final choice and is getting ready to sign on the dotted line, the purchase is at its most vulnerable, and the customer is more nervous than at any other time in the cycle. Up to now, there is always a way out – but once the decision is made, it’s done, over, complete. Better not screw up now. This is where the professional sales person understands the need for positive reinforcement and a restatement for the customer of the rationale for the buying decision, which hopefully has been arrived at jointly. In this, the Acquisition stage, all the work done up to now can be for naught if the customer get butterflies and isn’t comfortable to proceed. Risk is uppermost in his mind, and price rears its head again. “So if I’m going do this, you need to give me a deal.” Sometimes the customer needs something extra, or a price concession, to make him feel good about making the decision and to help him over the line. This is particularly true when one person will carry the responsibility for making the decision.
4. Risk fades as a factor in the customer’s mind after the purchase is made, only to be replaced by anxiety. As they say, the proof of the pudding is in the eating, and until the new product or service has been fully implemented and bedded in, the customer will still feel vulnerable. You must address that concern if you want to maintain a long-term relationship. Post-Sale, the customer no longer cares about price. Real evidence is needed to prove to him that he made the right decision. Work hard at it, and reward his trust.

Knowing the customer’s perspective at each stage in the buying cycle, you can be extra conscious of the issues that will be to the forefront of his mind. You now have an opportunity to fully align your activities to the specific context of the particular buying phase.

I was recently interviewed by John Golden, CEO of Huthwaite, for his Business Insight podcast series.  We talked about Social Networks and Social CRM in the context of sales effectiveness, and I spoke a little about Dealmaker Pulse, our recent offering in this area. John’s questions were insightful, and I thought that perhaps there might be something of interest to you in the discussion. Here’s a transcript of the interview (edited for brevity and clarity).

John Golden: There has been a lot of talk recently about the concepts of unlocking tribal knowledge and the notion of the Social CRM, so can you talk a little today about why they are increasingly seen as strategically important to sales organizations?

Donal Daly: Tribal knowledge is really just today’s label for information that you get from your networks, but because technology has enabled increased velocity of information gathering, the power of tribal knowledge has really grown dramatically. Online Communities is one of the fastest growing areas on the internet. There is now more information flowing through online communities than through email. It’s all part of the growth of networks.

Social CRM is a phrase that has lots of different definitions, but I think that it needs to be both a philosophy and a business strategy; but one that is supported by technology designed to inform and engage both the customer and the sales person in a collaborative conversation. Social CRM needs to be a recognition that the customer increasingly owns the conversation, and if you want to be a participant in that conversation then you need to ‘hang out’ online where your customers are so that you listen to what’s going on and engage in the conversation.

If you pull those two things together: the tribal knowledge and the CRM, then hopefully Social CRM gets implemented in a more customer centric, business centric paradigm than we have seen with CRM in the past.

JG: From a sales perspective, what challenges are they creating for traditional selling models and traditional ways of engaging with prospects and customers ?

DD: Our research would show that sales cycles are in fact getting shorter, but yet, anecdotal evidence would suggest that it’s getting harder to make a sale. Social is playing an important role here, and it’s quite simple. Buyers are inviting sales people into the conversation – or into the buying cycle – at a later stage in the cycle because they are using social networks, social media, online communities and their peer networks to evaluate options, and shortlist solutions, before the sales person even knows that a sales opportunity exists.

The whole social universe is helping to educate a much more informed buyer who is now saying ‘we don’t need to have sales people in here telling us what they do because we already know, and if we don’t already know, we can just ask one of our peers in the network’.  The net effect is that the Sales Cycle has shortened but the Buying Cycle hasn’t, so you must be part of the Recommendation Chain. You need to be there when customers are looking for solutions or looking for information. And when buyers are looking in the social network and are ‘hanging out’ in the social network somewhere, then they must find you. And that’s a reversal of the traditional sales or marketing model.

JG: Given that there are no good/proven models yet, if an organisation is looking at this and saying ‘I need’ to understand the Social CRM, I need a strategy, and then I need to build a strategy around it – how should they start to implement that strategy, or how should they even formulate that strategy in the first place ?

DD: You need to think about giving value first and expecting nothing in return. It’s the kind of thing you do in your own ‘real’ social community; you do it not because you are getting something back, but you just know it’s the right thing to do, and you will get your return.  You need to start by empathizing. Set up a Social listening station. Follow your customers and other influencers. Put your finger on the pulse of your customer’s needs: empathize, which is active listening; and then engage, which means that you are going to start contributing to those conversations.

• Be authentic.
• Become part of the Recommendation Chain.
• Invite other people to ‘play’ in your community.

That’s the ‘what’.  Then there’s the ‘how’, and integrated, smart, technology has a big role to play. These two words ‘integrated’ and ‘smart’ are both very important. Social CRM, or what I’d call Intelligent Social Networking for Sales is not about data, feeds, or activity.  It’s about ‘inference’ in context. It’s about what I call Integrated Resonance.

Social stuff doesn’t happen in isolation, no more than your sales activity should happen in isolation. Will your systems help you to act in the context of the specific deal that you are working on, but in concert with your customer’s activities in the social web? And will your systems guide those actions according to embedded intelligence of smart sales methodology or process?  Because if not, then you’re just going to be much more efficient at getting it wrong. It will just be CRM all over again.

JG: You recently launched a Social Networking solution of your own.  Can you tell me what was the driver behind Dealmaker Pulse?

DD: Dealmaker knows a lot about sales opportunities.  Because of the embedded intelligence it can immediately recognize critical events in a sale.  We thought that if Dealmaker could talk to us then it would tell us that such a critical event was happening.  So, we adopted the Twitter paradigm, and provided our customers with the capability to follow sales opportunities, accounts and users, as well as integrate their feeds from Twitter and LinkedIn.

It’s back to what I called ‘intelligent social networking for sales’, with instant objective deal alerts. It’s really just keeping your ‘finger on the pulse’ of critical sales events and customer sentiment, all within your Dealmaker environment.

Back to some of my earlier points: the social media technology today allows us to follow topics and people and if we are looking at our vision of what the social network looks like, you do need to follow topics and people, but do it in the context of your sales opportunities, your major accounts. You want to take total control of the information so that you can best serve the customer in the context of what they are doing, not just today, but in the last 3 minutes. So if you can do that and do it while at the same time Pulse is telling you about your deals .. then I think we’re on to something that will really add value for our customers.

We need to provide our sales people with systems that intelligently respond to what they are doing in the context of their deal. We have asked them for too long to be data entry clerks and so we need to combine the value that is in CRMs but do it in a way that is informed by intelligence of methodology, intelligence of analysis, do it in a way that really solves that reward to effort equation for the sales people and that goes across social media, and goes across deal coaching, and goes across sales forecasting, and I think that the bar will continue to be raised and I hope it is raised by our customers to increase the return on effort for every sales person out there.

The podcast is available from Huthwaite’s Business Insight podcast series.

For those who care about CRM, Social CRM is one of the hot-topics of the moment. Indeed there is so much written about Social Anything, you’d be forgiven for wondering how you ever survived without Twitter.

However, as with many new technologies – on their way to ubiquity – the applications that are most readily identifiable relate almost exclusively to B2C engagement, and there’s little written that is readily applicable to B2B interactions.

It’s fairly easy to see how both consumers and brand owners can impact buying behaviors and customer engagement with Twitter.  On Facebook, if you’re in the business of selling fizzy drinks, then it makes sense that you’d rather be Coke with 5 million fans than Pepsi with 600,000.  Facebook can be used effectively as an interactive billboard, cultivating and engaging consumers as part of the holistic brand experience.

But what of the B2B SCRM problem? If you’re a B2B sales person – already fed up with using your CRM system – what can you expect?  Or what should you request?

There’s been much brouhaha from the traditional CRM vendors about the importance of Social, but their own practices don’t give much evidence of SCRM at work.  On their Facebook fan pages, they’ve fewer fans that they have employees.  Even salesforce.com – with its stated position of “The Facebook Imperative” – has less than 1,000 fans of Chatter on Facebook (May 4, 2010).  That’s a fraction of the company’s own employee base. Maybe they’re not all fans!

Something is amiss. What’s a B2B sales person to do?

At the R&D facility at The TAS Group, our goal is to help B2B sales people sell more effectively, and then provide intelligent solutions to help them manage their business. We will shortly announce a solution that we think will leverage social networks to further that goal in a way that supports everyday selling activities and encourages buying activity.

With a paradigm that is evolving as quickly as Social Networks, I think it’s too early to have established ‘best practices’. But I do believe we have learned some lessons on our own journey, and we’d like to share those here.  Think of these 10 steps as a guide that might help you to establish your own roadmap, or provoke some thinking about how you can leverage this (yet immature) movement.

1. Empathize – Put your finger on the pulse: Social networks are a wonderful way to ‘get a sense’ of what’s going on in your marketplace, with your customers, and with your competitors.  Use Twitter (or other social network) to listen to the conversation by selecting some key influencers in your market that you might follow.

2. Engage – Cultivate the customer ‘where they are’: Where do your customers ‘hang out’ online? In the traditional world you’ve learned to socialize at the industry events, participate in trade associations, and network with influencers.  If you’ve worked hard at it, you’re probably quite successful at what you do.  But now those events will change. You’ve got to figure out where your customers ‘hang out’ in the Social Web, and engage with them there.

3. Be generous – Give something first, expect nothing in return: I think the correct ratio is nine parts giving to one part getting. Or put another way, you need to love your customers a lot first and then look for a little love in return. What can you do to help your customer? Are there resources in your company that you can provide?  Can you share how other customers have learned how to best apply your product?  Have you insight into trends in your customers’ industry? This is about your establishing yourself as the go-to-person when the customer is trying to figure out where to go next.

4. Influence – Be part of the “Recommendation Chain”: Remember when you used case studies and client reference calls to sell? Well now, customers will use the Social Web to ask “Does anyone out there know anything about [YourCompanyName Here]?  You need to be part of the “Recommendation Chain”. (Credit: In this context, I read that term first in a post by Axel Schultze.]

5. Authentic – Be yourself, Stay the course: This is not a one shot marketing program.  Return is not short term.  If you’ve something to say, speak your mind. If your opinion is worth something you will begin a conversation.  Above all else – be authentic.

6. Collaborate / Co-create – Play in (or start) a community: The playground is more fun if there are many people playing.  Invite conversation, collaboration and idea co-creation.  Consider first your immediate community – your peers, your manager, your customers – and learn what community means to them.

7. Follow – People, networks, opportunities, and accounts: Follow John, the LinkedIn group, the 100k deal you’re working on, or the key account you manage.  This is important.  It’s not just about who you know. It’s equally about what you know.

8. Integrated Resonance – Community, CRM, Methodology: Seek out integrated resonance – the space where what you know from your social network, integrates with what you’re told by your [traditional] CRM data, and is informed by the expertise of a sales methodology, to strengthen the relationship and progress the sale -or more aptly put – the purchase.

9. Measure – Use Klout, Grader etc., to monitor progress: I don’t need to tell you that if you don’t measure progress that you’re wasting your time.

10. Learn – impossible to predict all dynamics: It’s still uncharted territory, and remember that one year ago we didn’t know about half of the social networking products that exist today.  Listen, engage, and learn.

As I mentioned above, this post is a precursor to a solution we will shortly announce that we think goes some way to providing Intelligent Social CRM for Sales. We will also publish a much more detailed framework that will document the business challenges that we believe such a solution should address, and suggest approaches that might merit consideration.

If you’re interested in learning about either of these please check back here, follow me on Twitter for updates @sales20network, or email me directly at ddaly@thetasgroup.com.

Better still, we’d love to hear from you to help guide the final shape of these two items.

1. What’s important to you?
2. What Social CRM challenges are causing you most trepidation?
3. What’s your experience with Social Networks so far?
4. Do you have specific requirements that you think are mandatory for a Social CRM solution?

Our decisions thus far have been informed by our own usage, interaction and brainstorming with our customers, and consultation with other subject matter experts. But we’re not finished, and the dynamics in this area continue to accelerate – so we’d be very grateful for your hindsight, insight or foresight.

One of the issues that I’m often asked about is how to improve Sales Win Rate.  Sometimes the question is presented as “What’s a good Win Rate?”, or “What percentage of deals that I bid for should I win?”  Of course there is really no universal answer to this question – and the reason for that is that it’s the wrong question.  In my opinion, energy is more productively spent in determining why you lose deals, and in my experience, the explanation follows a fairly predictable pattern. If that is true, then if you can identify the common attributes of lost deals, you can work to avoid deals with those attributes, or focus on how to overcome the weaknesses that gave rise to the failure. Then by definition, your Sales Win Rate will improve.

In reality there are really only two reasons why you lose a deal:

1. You Should Not Have Been There (pursuing the deal) In The First Place, or
2. You Were Outsold.

I will substantiate this claim a little later, but first I want to share some alternative perspectives.

When I ask sales managers why their teams lost a specific deal the most frequent responses include things like:

1. “Well, he wasn’t speaking to the Decision Maker.”
2. “She didn’t understand what the customer really wanted to achieve.”
3. “We should never have bid in the first place, the customer is locked into our competitor.”
4. “Our solution just wasn’t a good fit, and he (the sales person) tried to squeeze a round peg into a square hole.”
5. “The competitor had a stronger relationship with the customer.”
6. “There was never a project there in the first place.”
7. “We didn’t understand the personal motivation of the Decision Maker.”
8. “He couldn’t get the customer to understand our value proposition.”
9. “She never realized that the budget was way too small for our product.”

Responses from sales people to the same question include many of the above, but there are sometimes some additional reasons given:

1. “We’re just too expensive.”
2. “We couldn’t provide a reference because we’ve never sold to that type of customer before.”
3. “I never knew [the deal] had to be approved the technology committee.  He never told me that.”
4. “The customer just doesn’t get it. I don’t understand it – she really needs our stuff.”
5. “I never knew that the competitor wrote the RFP.”
6. “He never told me that Capability X was important.”
7. “My [internal] sponsor just didn’t have the juice to make it happen – even though he told me he did.”

For mid-to-large deals in an enterprise B2B market, the costs incurred in pursuing a sale will typically range between $10,000 and $100,000. Our research at The TAS Group has shown that it takes 50% longer on average to lose a deal than to win one.  Think about that for a moment.  If your sales team is spending more time losing deals than winning deals, what’s that going to do to your quota achievement?  Or, if you could fix the problem, what impact would that have?

No matter how you look at the reasons given above, in truth there are really only two reasons why you lose a sale:

1. You Should Not Have Been There (pursuing the deal) In The First Place , or
2. You Were Outsold.

It’s as simple as that – just two reasons. In my experience, failure is weighted fairly evenly across both. So, let’s look at these in a little more detail.

Reason 1. You Should Not Have Been There In The First Place

At The TAS Group, we discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10.  This means that you pursue fewer opportunities.  It’s not about ‘getting up to bat’ more often. In fact it’s the opposite.  In practice it means determining at the outset if your solution can uniquely and competitively add value to the specific customer that you are targeting. Of course it means research, and work, and understanding of what the customer wants to achieve, and how your solution might be applied to solve their specific problem.  This information is only useful if you understand what the competitor might be offering.  Often, it’s as simple as defining your ’sweet-spot’ customer – listing the attributes that describe the profile of the customer to whom you can competitively add value. When you hear yourself saying “We’ve not sold to this type of customer before – but I think I can make it work.” – then move on. You’re wasting your time.

If you look at the ‘lost deal’ reasons listed above, items 3,4,6, and 9 in the Sales Manager’s list, and items 2 and 5 in the Sales Person’s list fall into that category – you should not have been there in the first place.

Reason 2. You Were Outsold

Sometimes this is hard to accept. I know that in my case, if it’s not Reason 1, then I’ve been outsold. I didn’t understand what the customer wanted to achieve, I was not politically aligned in the customer’s organization, I didn’t understand the customer’s buying process, I chose the wrong competitive strategy, I failed to articulate my value proposition in terms that the customer understood, I failed to demonstrate ROI for my solution, or, more likely, a combination of a few of these.  Looking at the lists above, items 1,2,5,7,8, and 9 in the Sales Manager’s list, and items 1,3,4,6 and 7 in the Sales Person’s list fall in to this category. I’ve been outsold – someone else did a better job.

Now, even if you’ve done a great job in qualification – and that’s what you’re doing to pass the ‘Should I Be There In The First Place?‘ test, you won’t win all of the deals.  Sometimes, you will be outsold, 3 out of 4 is a realistic Sales Win Rate target.

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When I express the perspective outlined here, I get a range of reactions, ranging from animosity (“Who does he think he is? He doesn’t understand what I go through to win a deal”) to guarded acceptance and excitement (“Wow, if we could actually achieve that, it would be incredible. We should give it a shot.”).

As we’ve watched our customers move to these kind of ratios it’s been really gratifying to know that we’re making that kind of difference for some.  I’ve spoken at length to those who excel on this journey, and there are a number of common attributes – some organizational, and some with respect to the tools they use to help them.  Organizationally, the companies just seem to be run better, and sales is viewed as the engine that fuels growth, and investment is commensurate with that view.  From a sales tools perspective, the common elements are a sales process that maps to how the customer buys, deep analysis of the customer’s political structure, and collaborative interaction with the customer to truly understand their business problem and what they want to achieve.

The following movie links give an overview of components of how the Dealmaker Sales Performance Automation platform is used to support these three goals.  Though, as it uses our Dealmaker product, it’s a little self-promotional, and I don’t like to do that in the blog, it’s the best way I can think of to elaborate on the areas that I think add considerable value and I’ve seen executed well .

• Sales Process
• Political Alignment – go to the 3min mark in the movie
• Collaboration

The fabulous thing about Google is that somewhere, somehow, you can find out pretty much most things. Sometimes, you get the answer you need directly in the search results; often Google will point you to Wikipedia, show the latest tweets from Twitter, or direct you to a company’s website. However, the richness of Google sometimes makes it hard to find what you need without scrolling through many, many pages – and even then you can end up with irrelevant results.

Over the years, I learned a few tips that reduce the number of search results, and let me find what I’m looking for much more quickly.  These tricks have saved me a lot of time, and I thought I’d share.

1. Use quotation marks for exact phrases. Searching for “The TAS Group”, with the quotation marks, is much more efficient that just searching for The TAS Group, and return far fewer spurious results.
2. Use ‘OR’ to include more than one search item: Searching for ipod OR mp3 player gives results that contain either ipod or mp3 player.
3. Placing a ‘-’ in front of a term excludes that word. TAS -Group will give answers that include TAS, but not Group, so none of the results will have the word Group in them.
4. Use ‘~’ for synonyms. Searching for ~sales gives you results that contain sales alongside store, retail, etc.
5. Find items related to a URL: Search related: www.dealmakergenius.com, and your results will include information on The TAS Group, Sales 2.0 Network and other related items.
6. Search for sites that link to one another. If you search link: www.sales20network.com, you will find a list of all the sites that link to this blog. (There are quiet a few!)
7. Look inside a site. Searching for site:www.sales20network.com trust will find every reference to trust on www.sales20network.com, or links on other sites that connect to a page on www.sales20network.com that contains the word trust.
8. Put … between numbers searches for numbers in that range. Searching for ROI 10…30 will generates a list of results that contain ROI and numbers in the range between 10 and 30.
9. Not case sensitive: Google search is not case sensitive, so searching on tas returns the sames results as TAS.
10. Get definitions: Using define: sale, will give you definitions of sale from many sources.
11. Get time or weather: Using time: Dublin, Ireland or weather: Seattle, WA, will quickly figure out time zones, and tell you what time it is now in Dublin, Ireland (alway happy time) or the weather in Seattle, WA (always wet).
12. Get exchange rates: 150 euros to dollars will (today) return 205.15 U.S. dollars
13. Quick URL info: You can get info on dealmakergenius.com, by searching on info: dealmakergenius.com.  It will include a short description, links to its cache, similar pages, and sites that link to that URL.
14. Use Google as a calculator: You can use Google to evaluate many math expressions. Search for 365*24*60*60 and will Google tell you the number of seconds in a day (31536000).

Google search is really powerful.  I hope these tips will make it more efficient for you.  If there are any other tricks you have – please share.

This post is partly informed by a great presentation on www.prezi.com by Tony Vincent.