To effectively manage a sales cycle, the salesperson must understand and mirror the buying process. This process can be broken down into the three phases: recognition of need, evaluation of solutions, and negotiation. A well-managed sales cycle will follow these phases by uncovering customer’s needs (Probing), demonstrating superior solution (Proving), and removing barriers to getting the order (Closing).
But what does this mean to the sales person? Uncover who´s need to? Convince whom? Who actually is the customer – the company, an individual or a group? What does this mean for the sales cycle?
Industrial buying decisions, in contrast to consumer purchases, are generally taken by several individuals, the so called buying center. The sales person is faced with two challenges: The composition of the buying center and the dynamics of the decision making process within it.
A generally accepted model for the composition of the buying center is to divide the individuals into functional categories such as user or financial. This certainly helps the sales person to structure her approach to a particular sales situation, but it still leaves the task of finding out who fills which role. This is not easy. First of all, a buying center is not always a formal organization with these categories tagged. Much more often it is an informal team with some people involved for the whole process and others having a limited role. And some may stay in the background, just influencing the decision or even holding a powerful position with a lot of weight in the final decision.
The allocation of an individual to a role is not black and white. People may just have a limited vote and just because a member comes from production or purchasing, etc. does´t necessarily tell which position they fill in the buying center. Certainly a floor manager from production will be a user, but is he also a decision maker?
Individuals can fill more than one role in the buying center, and roles can be filled by more than one individual. It all depends on the product, the type of business and the culture of the company. Sometimes buying centers can be very small with only two individuals, or they can get very large and involve 6, 7 or more individuals. The challenge for the sales person is to always know who is involved and how, and how much those individuals influence the decision.
Then there are the decision criteria — what are the motives of the buying center members? One should think that, in an industrial purchase situation, the decision would be taken on a rational, purely logical basis, but this is rarely true. Task related criteria (how well a product will perform and about what is best for the company) represent only one element in the decision making process. But there are also personal criteria or motivations which may sometimes be even more important. Issues like promotion, risk avoidance, or just prestige.
On top of the two motivational aspects, there are influences coming from the interactions between group members. Relationships between group members can have a strong impact for many positive or negative reasons such as doing a favor to a good friend on one side, or jealousness and strong animosities on the other.
This leads to the dynamics of buying centers. Knowing members and their motivations is one thing; the process in which they take a decision is another. This process is much too complex to be described by a simple formula based on voting power. Voting power plays a big role in the final decision, but what happens between recognition of needs and final decision is far more complex. Buying center members go through a process of influencing each other through interactions, trying to convince their colleagues by a mixture of arguments, tactical maneuvers, and even force. Outsiders such as sales persons from different vendors build relationships and fuel the members with their arguments to pull them on their side. During this process buying center members develop their own preferences until a decision is taken in which formal power is the dominant criterion. Until then, the situation changes every day and the sales person has to keep track of any development and stay on top.
Unfortunately, a sales person will not be with the customer every day, cannot talk to every individual in the buying center with the same intensity. He will have many sales cycles to manage, all with different lengths and in different phases. The only chance for not getting lost in this situation is discipline and an intelligent use of modern technology. In my next article, I’ll show how one sales methodology uses the power of technology to handle these complex sales environments.