What's keeping sellers from meeting their objectives for profitable growth?
While cyclical trends are certainly in play in today's markets, there's more going on here.
In markets revolving around considered and complex offerings, sellers are experiencing several key challenges -- and these patterns began to emerge long before the recent downturn.Among them:
- Inability to Differentiate. Growing commodification can be traced the
maturation, globalization and Inter-networking of markets. In terms of maturation, nothing is new. Markets tend to go
through stages of rapid
growth that ultimately tend toward maturity. Business markets are
experiencing this pattern as categories such as enterprise software and
management consulting have reached broad-based markets and are now
fragmenting into niches (e.g. boutique consulting) or attempting to
present new models that can drive growth (e.g. software as a service). In
other markets, global competition is contributing to new forms of
market crowding (business process outsourcing, for instance) --
something that has long been happening in consumer goods and
manufacturing sectors. But it is perhaps the revolutionary impact of
the Internet that is disrupting markets most. For instance, SalesForce.com, which
pioneered the web-based offering of software functionality, has put larger
rivals such as SAP and Oracle on notice. As competition mounts, companies are struggling to set themselves apart and demonstrate their unique source of value. Unfortunately, they all too often tend to sound alike to their prospects.
- Inability to Generate Demand. Some companies have differentiated products, capabilities and technologies but struggle to generate qualified leads nevertheless. Perhaps they are not getting on the radar of press, analysts and other influencers. Nobody is talking about them. Their prospects are indifferent or resistant to their marketing efforts. They are unable to attract attention at the earliest stages of a decision cycle. They are unable to fill their pipelines with prospects. They are unable to move their existing prospects into forecast. One reason this may be happening is that the positioning and messaging presented is inherently self-serving. Many companies tend to market themselves by focusing on the capabilities of their solutions. The customer's concerns and problems get very little attention. But, as author Stephen Denning has pointed out, it's necessary to take prospects through the "Valley of Despair" before you lead them up the "Mountain of Hope." They can't seek solutions to problems they cannot fully grasp or comprehend. And, by the time they are seeking solutions, they may already have had their perspectives shaped by a rival company. Companies often struggle to generate demand because they are poor at engaging prospects early on in the decision process. They fail to build trust and credibility when it matters most.
- Inability to Engage Key Decision-Makers. Why can't sellers reach key decision-makers and -influencers? In some cases, the issue may be that the prospects do not see their problems as sufficiently troubling or costly to justify a new solution -- even if they are. In other cases, they are simply spending their time with other product and solution providers who they consider more impressive. In still other cases, sellers are failing at the point of customer interaction. Perhaps the sales team members have been insufficiently provisioned for credible sales conversations. Are they asking the right questions that would reveal the existence and then, the scope and magnitude of a problem? Are they asking questions at all? Or are they just presenting solutions to presumed problems? While these issues can undermine sales calls, the bigger problem now occurring in the market is that relevant sales conversations are not happening in the first place. When prospects are capable of conducting their own research through the Web and other resources, they are unlikely to even consider product, service or solution providers that have failed to credibly set the stage for these conversations. In the absence of trust and credibility, it's virtually impossible to
win the confidence of decision team members.
Unsurprisingly, weakness in these areas presents itself in a number of ways. Sales cycles lengthen. Profit margins erode. And revenue performance goals go unmet.
While troubling economic trends will certain magnify these problems, the question for companies to consider is how they can address them now -- even in a recessionary market.
One key opportunity associated with a down market is the opportunity to further strengthen your market positioning -- to establish your company as a provider of superior guidance.
Given that many companies are now cutting back heavily on marketing and quietly slipping out of sight, this may be the right moment to win the high ground.