Frank Cespedes, Senior Lecturer at Harvard Business School and author of Sales Management That Works, and Ecosystems’ CEO, Chad Quinn, review how trends here in the United States have converged to bring about a deep disconnect between B2B buyers and sellers:
- Shift in Demand: Though the U.S. job market long depended on manufacturing, the nation’s nonstop development over recent decades has transformed ours into a service-based economy. As a consequence, the main driver of economic growth in the developed world is now service productivity; in addition, because selling makes up a large portion of services, sales productivity is a major factor in growth.
- Expansion of Big Data and SaaS: Focusing on our technological development we see another trend running alongside the large shift to services: the exponential growth of all data capabilities, from analysis to sourcing. Unfortunately for sellers, this flood of data has been used mainly to the benefit of buyers, who have a variety of new tools at their fingertips allowing them to find the deal that actually nets them the most.
- Quality Over Quantity: The buyer-seller disconnect is partly due to this unequal benefit from data and partly due to the structure of incentive pay in the sales sector. The incentives used in 70% of sector pay structures consider volume of sales when rewarding employees and ignore the quality of those sales and quantifiable metrics such as profitability, gross margin, or cost-to-serve. What this brings out of salespeople is ultimately counterproductive because they are not motivated to seek customers whose goals or strengths align with the seller’s. Not only does this cost both seller and buyer in less productive relationships, it creates fundamental issues by failing to align them beyond the surface characteristic that the seller has something the buyer wants.
- Sense of Value: How do B2B sellers succeed in today’s world of the empowered buyer now? There needs to be a joint realization of what “value” means to the customer. Different accounts and different customers buy from solution providers and their sense of value varies because of their circumstances and their business strategies. Ultimately, B2B sellers need to bring customers on the buying team to align on what they value. Frank warns that while software platforms like Ecosystems can help sellers and buyers align on value, at the end of the day, “any platform is only as good as the people who manage it and use it. And in most companies, that’s the salesperson, the account manager.”
Learn more about the importance of having collaborative customer conversations about value