About 12 months ago I met Peter Saunders, who runs a $15MM industrial services company. Peter has been running the company for almost fifteen years, and the business has done well - it employs forty-five people, is soundly profitable and serves a customer base of hundreds of companies across North America.
But lately, something is going wrong. The day I talked to Peter he’d just fired another sales rep. That made four of the five he’s hired in the last two years.
“We can’t find enough hunters,” Peter said. “Too many of the sales people I’ve hired only know how to sell on price or respond to a placed order. Anyone can do that! I need hunters! People who will go out there, find potential customers, educate them on what we offer and why it’s valuable, and then sign deals.”
I’ve heard similar complaints from many B2B business owners lately. What’s going on with the lack of hunters?
I think the lack of hunters isn’t really the problem. Rather, it’s a symptom of a Buyers Revolution that is upending the buying and selling process.
We’re living through a dramatic shift in how we as consumers and businesses buy things. CEB (Corporate Executive Board) has done an excellent B2B-focused study that quantifies the change in buyer behavior. Based on a survey of 1,400 B2B buyers, CEB determined that on average, buyers complete 57% of a purchase process before they engage salespeople from potential vendors.
I can’t think of a statistic I’ve heard in the last decade that has a greater implication for B2B companies and how they generate revenues. To elaborate:
- 57% of the sales process is complete before a buyer engages with sales.
- 57% of purchase processes are limited to the vendors that buyers can find without having to talk with anyone in sales.
- A significant portion of selling opportunities are missed by any given company, because it wasn’t identified by the buyer during the first 57% of the purchase process as a potential supplier
- In short, 57% of buying is happening outside the sales department.
What the Buyers Revolution means for B2B companies
For Business to Business companies, this means there’s a new reality when it comes to revenue generation. While the sales department has been the core of revenue generation for B2B companies for decades, the new buyers’ reality is causing some companies to rethink this. Because when it comes to attracting new customers, their old sales models just aren’t working. They talk the language of hunters and farmers when it comes to sales, and they dream of finding hunters who will swoop in and work their rolodexes (or create rolodexes) and bring in new customers and deals.
But that approach isn’t generating any sales. Why? Because buyers have changed. Buyers no longer answer their phones, they don’t return unsolicited phone calls or emails, they don’t read about products and solutions they don’t need right now, and they don’t take meetings with people offering something they don’t have on their to-do list of the week.
For B2B companies the implication is clear: If buying has changed, so too must selling. And where many B2B companies are heading with this is a rethink of their budget allocation between sales and marketing. Marketing budgets are typically 1 - 5% of revenues for B2B companies, and the sales budget is typically 10 – 15%.
But the question some B2Bs are asking is: If 57% of the purchase process is now happening outside of sales, should we be spending less than 30% of our revenue generation budget (the combination of sales and marketing) in that area?
Rather than dreaming of a hunter, should Peter be dreaming of a marketer?