In business as in life, it’s important to think positive and remain optimistic. However, there are times when looking at what’s wrong is just as critical — if not even more — than focusing on what’s right.
And one of the most vivid applications of this wisdom is revealed by highlighting four massive errors that many B2B businesses make, and which ultimately lead to setbacks, sell-offs, and shutdowns.
- Failing to build strong customer relationships.
All businesses in every sector know that they need to build strong customer relationships. However, in the B2B space, this is not just a best practice or smart idea: it’s a fundamental requirement; especially since B2B sales cycles typically take months or sometimes even years to culminate in a transaction. Bring obligated to start from square one with every single prospect — instead of hitting-the-ground-running with existing customers — is a recipe for small (or non-existent) profit margins.
What’s more, existing customers are categorically more profitable than new ones. A five percent increase in customer retention can improve profitability by a staggering 75 percent, and it costs 500 percent more to acquire new customers than to keep current ones.
The moral to this story? B2B businesses that over-focus on acquiring new customers and neglect their existing ones may experience some revenue gains, but it’s almost certain that the benefits will be short-lived — and replaced by some very lean months, quarters and years ahead.
- Not realizing that there is more than one customer on the deal team.
According to Gartner, in an average organization with 100-500 employees, seven individuals are involved in a single purchase decision. Obviously, we aren’t talking about paperclips and staplers here (although those who have seen the movie “Office Space” know how precious staplers can be to some people!). But for big ticket B2B procurement such as computers, furniture, software — and professional services like training and consulting — there is invariably going to be more than one customer type. For example, the informal or formal buying team could include representatives from C-suite, IT, administration, risk, finance, HR, shipping, and so on.
B2B businesses that fail to realize this fact — i.e. that they must engage, impress and ultimately convert multiple people as part of their sales cycle — invariably find that many of their proposals get blocked, and they get stuck with low-level “gatekeepers” who lack the authority to get a deal done.
- Not realizing that talent can be more valuable and vital than capital or customers.
It goes without saying — but I’ll mention it anyway — that capital and customers are critical to business success. However, in the B2B space there is something can be even more valuable, and also tougher to obtain: talent.
Yes, it’s relatively easy to find adequate workers who can “get the job done” (at least with the proper training). But B2B organizations that rise to the top of their marketplace are never those that merely “get the job done.” They lean forward and close gaps with customers, and while smart technology and amazing products are part of the puzzle, in the end it’s talent that determines whether this happens — or whether it doesn’t.
At the same time, winning the war for talent doesn’t necessarily mean opening the vault or going into debt. As noted by Key Interiors, an interior solutions and office design firm that has worked closely with high-profile B2B organizations, today’s workforce “rock stars” are not exclusively or even primarily motivated by cash. Many of them are heavily influenced by their overall work environment, and whether it’s a productive, energizing and welcoming place to be for around 2000 (or more) hours a year.
- Not using marketing automation.
The bane of most B2B sales professionals’ existence is not aggressive quotas: it’s having their pipeline regularly populated with unqualified leads. Why? Because it means they waste an excessive amount of time trying to engage people who aren’t legitimate prospects — at least at the current time.
The smartest way to solve this problem — and also the cheapest — is to use marketing automation, which engages leads by sending them emails, ebooks, white papers, and other digital assets in order to nurture them into becoming qualified leads. When that happens (i.e. when their lead score reaches a minimum threshold), sales professionals are notified and reach out accordingly.
Naturally, this doesn’t mean that every nurtured lead is a guaranteed sale. After all, marketing automation isn’t a magic wand. However, when everything is configured and mapped properly, it does indeed mean that sales professionals spend much more (if not all) of their limited time communicating with the people who matter the most in their world: legitimate prospects vs. unqualified leads.
The Bottom Line
Sir Francis Bacon is reported to have coined the phrase “knowledge is power”. Well, were he analyzing the relentlessly competitive B2B landscape, he might have added “…and required for survival.” Because that is indeed the case: having the right knowledge at the right time is the difference between thriving and failing. Keeping the above massive mistakes in mind — and ensuring that they don’t erupt in your B2B organization — will go a long, long way to writing your success story.