customer-pull

Having stirred up veritable hornets’ nest with my previous post by asserting that “personal relationships no longer matter as much as they once did”, I now feel compelled to add some further accelerant to his hotly debated subject simply because it has created such valuable and diverse views. I’m a strong believer that “harmony is overrated” when running sales teams, and that diversity of viewpoints nearly always contributes to wider benefits for all team members.

At the very heart of my arguments is the reality that doing business in the global, digital, connected economy has evolved from vendor-push to customer pull, and I’m not hearing anyone dispute that notion. Customer-pull models means buyers are in control, and they continue to demonstrate (via their actions) that they don’t always want, or need, a ‘personal relationship’ with a vendor sales person for many of the reasons that I outlined in my previous post (link). In a customer-pull world, the laws of supply and demand are at play, and we (most of us) are now operating in mature buyers’ markets.

The second most important backdrop to this debate which seems to have been forgotten by many vendors, is the extent to which buyers (businesses in general) have continued to become increasingly risk averse, and with good reason. Today’s VUCA business world, coupled with the high probability of disruption from unanticipated sources, means that practically every buyer is hyper vigilant and ultra-focused on risk management.

Risk management flow chart (Click for more)

Talk to any CEO, CFO or sitting board member and they will tell you that “risk’ now plays the single most important role in business decision making. Of course, measuring risk has always been about balancing against expected returns and when it comes to purchasing decisions this all comes down to the level of ‘trust’ that the vendor can actually deliver on the promises that a sales person is making.

Needless to say that ever since the days of the ‘peddler’, and the ‘snake oil salesman’, buyers have been wary that their sales person is perhaps embellishing just a little as they salivate over the potential commissions. Everyone knows and understands that outdated dynamic (which will disappear in the future – but that’s another story), and as buyers we have all been burnt at one time or another by a sales person whom over-promised. Right?

Well, under these new customer-pull / risk-averse conditions that are ubiquitous today, buyers actively seek to avoid being ‘pushed’ through the process by a sales person whom has a vested interest. Instead buyers work to ensure that due process is followed so that purchase decisions are always data driven. Sales people often wonder why they end up in front of their computer screens responding to a rigorous online bidding processes and RFT’s. Buyers need to stringently compare apples with apples….thus, influencing relationships with sales people are not needed, or wanted, in the customer-pull models. Professional buyers realized long ago that they can reduce risk by removing personal influence (and over-promising) from buying decisions by doing their own research, self-serving and automating. Again, my key point here is simply that many sales people still mistakenly think that the ‘personal relationship’ is critical, whereas buyers now place little value in them. Hence the rise of consensus decision making and the fact that a sales person’s number#1 competitor in most cases these days is “do nothing”. But don’t take my word for it…ask your buyers what they think.

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Case in point, in one of my most recent roles, my team and I were chasing, and ultimately won, a very large (USD $8M +) software deal with one of Australia’s largest banks. It was an 18-month sales cycle and we had spent huge amounts of time developing and engaging every single personal relationship that we could leverage. Having been awarded the deal, we subsequently invited the customer’s CTO to speak at an internal event (off-site) that we were running for our sales & marketing teams. When asked why the bank selected us, the CTO said this: “Your company was selected as the winning vendor simply because we see you as a “safe pair of hands. Almost every decision that we make now is centered on risk – that is, will this vendor be safe and reliable, and can they deliver for us – long term”. I then specifically asked the CTO of our new customer the extent to which our relationships played a part in their decision, and he said “zero, we had exactly the same relationships with the other bidders, and whilst your account team did a good job, we never factor personal relationships with purchase decisions….there is now a lot of oversight in procurement procedures these days”.

For those that have been in sales for as long as I have, these comments reminded me of that old risk-based maxim that “nobody got fired for buying big blue (IBM)”. And that says it all – buyers need to trust that their vendor is a ‘safe pair of hands’. The difference today is that ‘trust’ can be now established with the right brand/product/business reputation and the obvious example of a business that is smashing the old stereotypical “people buy from people” is Australian software developer Atlassian. Atlassian sold $320 million worth of business software last year without a single sales employee. With a $5 billion market cap, Atlassian is growing successfully without employing sales staff simply because they have built great products, which have garnered market trust over time. They have created strong advocacy and recommendations for their products (and service) along with very limited negative social chatter. According to Scott Farquhar, Atlassian’s co-chief executive officer, “our customers don’t want to call a salesperson if they don’t have to, they’d much rather be able to find the answers on the website”.  

Despite all of the recent debate, I now believe that the culmination of everything that we are now witnessing with customer-pull models, and advancing technologies such as AI, will continue to mean that buyers will self-serve and automate wherever they can to reduce risk. This evolution combined with the type of workplace change that we are now seeing (rise of the freelance economy and increasing job hopping) will mean that the concept of having a ‘personal relationship’ with every buyer will eventually go the way of the dodo….in exactly the same way that the critically important ‘personal relationship’ that my father once placed such high importance on with his local “bank manager”.

Agree? Disagree? Let me know.

By Graham Hawkins