Behavior Driven Sales
How Increasing Confidence Can Increase Win Rate–As A Buyer And Seller
As budgets remain tight in the current inflationary economy, spending is increasingly scrutinized, and more time, attention, and decision makers are involved in the sales process resulting in longer sales cycles.
However, these additional investments of time and attention don’t necessarily equate to action. In fact, more in this scenario actually equals less. Fewer decisions are being made as a result, to the tune of 40-60%, according to Matt Dixon in his latest book, The Jolt Effect. This leads to a much longer buying cycle, which in turn leads to difficulty in forecasting, impacting the rate of company growth. But, the impact isn’t just felt by the company who has a product or service to sell (i.e. seller), it’s also felt by the company who is in need of the product or service (i.e. buyer), as they are weighing many decisions in hopes to make the right decision at the right time.
How many buyers are considering the opportunity cost during decision making–that is the benefit an individual or business forgoes in choosing one course of action over another? And, how many sellers are evaluating the expected opportunity loss (EOL)–that is the potential quantifiable loss of making an incorrect choice in risk-based decision making–in an effort to bring awareness to the buyer as to what’s at stake.
In this economic environment, CEOs and CFOs are getting more involved and asking if the spend (buy, build or partner) is mission critical. “We are in a measured buying environment. There’s no doubt about it,” Salesforce president and COO Brian Millham said in a recent earnings call. This equates to long sales cycles and approval layers, which demonstrate behaviors that are different from when budgets are generous and the question being asked by the C-suite is, “What investments are we going to make this quarter to ensure we stay ahead of our competition?” In a measured buying environment, behaviors are in stark contrast to growth-enabler conversations that allow for more freedom, flexibility and innovation.
So, how do you align a “problem to be solved” with a shared outcome, increasing the win rate for both the buyer and the seller? Let’s talk about a phrase we’ve likely all said or heard at one point over the past decade: “Fear of Missing Out” or “FOMO.” It was introduced to us in the 2000’s, thanks to the creation of social networking. This construct has been leveraged by most sales people in their own approaches, but in this economy, dialing up FOMO alone to help close a deal isn’t going to cut it.
Although most people appreciate a good discount, and it may move your solution up on the list of options from which to choose, what once worked as a successful sales tactic is now being met with resistance. There’s a new four letter word many buyers are experiencing and it’s “FOMU” or “Fear of Messing Up”. The result of this behavior is that buyers must convince more people in their organization to spend their dollars on the solution you’re selling, if they’re willing to make an investment at all. “People are deeply concerned about making mistakes. Even if they don’t want to miss out on the “deal,” they’re more concerned about messing up and losing their job,” Max Dixon shares in The Jolt Effect. That’s a tough obstacle to overcome, on both sides of the table. The question is what can you do as the buyer and the seller to increase your odds of winning? There are many things to consider, and no single solution. I’ve honed in on a few simple behaviors that will help you take action.
As the buyer…
Focus on effectiveness rather than just efficiency.
Is the alternate solution you’re weighing going to only increase efficiency, or are you solving for effectiveness, too? (See Peter Drucker’s book, The Effective Executive–The Definitive Guide to Getting the Right Things Done)
Understand the opportunity cost and the expected opportunity loss for your business.
Refresh your memory on the definitions above and ensure your team is operating from the same definitions.
Invest when times are good AND bad.
“Life isn’t about waiting for the storm to pass. It’s about learning to dance in the rain.” (Vivian Greene; artist, author, entrepreneur)
Turn inaction into action by taking incremental and iterative steps forward that lower the risk for your business.
Doing nothing is doing something so make it worthwhile and move forward while learning as you go.
Do your homework to increase your competence in the problem to be solved so that you can increase your confidence in the solution you’re choosing.
Tell that case of FOMU to get lost!
As the seller…
Seek to understand the buyer's fears in order to address them head on. And, empathize with them.
Listen first, ask curious questions and connect as humans to build a trusted relationship.
Communicate the business value your solution brings, not just its features and functionality.
Focus on the customer’s ROI, believe in and demonstrate the value you bring.
Focus on de-risking the investment/buying decision and lowering their FOMU.
Lower the barrier to entry by suggesting a smaller commitment up front and growing over time once proven success–this also builds trust.
Increase their confidence in your product/service solution.
Share case studies, referrals, testimonials, etc.
Focus on Shared Success.
Co-create a solution that achieves the expected outcome, delights your customer and has mutual reward.
Whether you’re a buyer or seller, you are human and FOMU is a real thing. In this challenging environment, we all have to think differently to ensure we’re making the right decisions. Although budgets may be tighter than usual, there is no shortage of problems to be solved or opportunities to seize. At augustwenty, the gnarlier the problem, the more excited we are to help you build the right thing, the right way, at the right time so that you can capitalize on the now while preparing for the near and next. More often than not, the higher the risk the higher the reward. For our latest podcast, our team sat down with one of our client partners, nuCamp, and together we dove into the murky waters of “Thriving Amid Uncertainty.” Times of uncertainty can cause inaction, which can result in standing still or even worse, falling behind. As these moments arise, I hope you check your inner FOMU and focus on the behaviors you can control so that as a buyer or a seller, you can confidently increase your chances of winning.
For more information about augustwenty, visit our website, check out our work and follow our journey as we build valuable things.