Research from Google and CEB titled The Digital Evolution in B2B Marketing provides new insight into buyer behavior, and it challenges the conventional wisdom. According to the study, customers reported to being nearly 60 percent through the sales process before engaging a sales rep, regardless of price point. – Forbes
We have heard this many times from quoted studies but my podcast guest last week, Craig Elias does not hold to that theory. Below is an excerpt from the Related Podcast and Transcription: Working the New Sales Funnel that is well worth your time.
Joe Dager: I would say that Window of Dissatisfaction fits in before that 60%. Can you explain that? I mean, how do you get in before that 60%?
Craig Elias: Yeah. You’re totally right. And so, there’s a book called The Challenger Sale and basically they say that by the time a prospect phones a vendor, 57% of the decision has already been made. Basically, what’s happened is someone has defined the problem, and they’ve designed the solution and now, they’re just calling vendors to see if they can get the lowest price. And, what is interesting is there’s some research I’ve seen done by a guy named Andrew Gaffney for the Demand Generation Report and he says two interesting things. First of all he says that, and I’m talking about business to business, 80% of B to B purchases are unbudgeted, unplanned.
So, created by triggers the way I think about that, and the crazy thing is that 97% of the time it is a customer, a prospect who reaches out to the vendor and initiates the process. We as sales people have gone to the point where we rely upon marketing, inbound all that stuff. We’re very reactive in our approach versus proactive in our approach, and it has a big impact on close ratio. I’ve seen two pieces of research. Sorry, heard of one piece, seen another. I saw one piece of research in ’09 that says “By the time someone calls you, the odds you get the business are about 16%.” About 40 years before that Xerox did some research, and they had the exact same number, so basically 1 out of 6 or 1 out of 7 if they phoned you first.
In 2003, I did some research for my first company. The one that won the billion dollar idea competition and my research said that ‘if you’re the first one in during this window of dissatisfaction, the average close ratio is 75%.’ Last year, Forrester released some research, and they said the number is 74%, on the same thing. In ten years that hasn’t changed, so it’s all about how do you get there. The way you get there is by understanding the events that caused people to become customers. The way I think about this is you start with a list of people that have become customers in the last little while and you just go down the list and say, “Hey, which ones happened fast, which ones were easy to reach the decision maker, which ones paid full price or didn’t spend a lot of time trying to grind you down and which ones are willing to be a reference or a testimonial.
When you look at your customers this way, you take the ones that have 3 or more check marks next to their name and these are the people you probably got to in the past while they’re in the window of dissatisfaction and then you simply analyze those people to figure out what were the events that made them unhappy with the status quo.
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