My previous startups have all been B2B companies, meaning I was selling products and services to a decision maker inside a large company (typically Director or VP level). And for over a decade I would be confused and frustrated every time I lost a deal even when I clearly had the better solution–the one that would lead the buyer to higher sales, higher profit, or better other outcomes.
This happened all the time. I was better, faster, cheaper and still lost to an inferior competitor. What the ?!
It took me a long time to understand the hidden reasons why B2B buyers buy, and in a recent post called, A Hierarchy of Business Needs, Seth Godin brilliantly lays them out. Godin writes:
If you’re selling a product or service to a business–to a non-owner–consider this hierarchy, from primary needs on down:
- Avoiding risk
- Avoiding hassle
- Gaining praise
- Gaining power
- Having fun
- Making a profit
The key thing is that this is in order of importance. This is crucial to understand. The decision maker won’t care about “praise” if they feel there is risk and hassle. They won’t care about profit, if the solution decreases their power.
While this seems illogical–or at least a cynical view of B2B buyers–the truth is that they aren’t spending their own money.
This is the critical difference between B2B and B2C. A B2B buyer’s goal is supposed to be to maximize the sales and profits of their company, right? But actually they are usually never measured or rewarded for that. In essence, most B2B employees are really just managing their careers. So, they do care about profit. But only after all the other “needs” boxes are checked off.
Example 1: My was offering a custom training curriculum to support the launch of a blockbuster new drug to a top 5 pharma company. We nailed the creative, demonstrated superior efficacy, and had a lower price. We didn’t get the deal. One decision maker later told me, “Kevin, our whole company is riding on this launch. We know you were the best choice, but your company is only two years old and you have a dozen people. We had to go with the bigger, more established vendor.”
Example 2: My company offered an online recruiting solution to the VP of a major bank. We spent months answering questions, doing demos, calculating ROI. We were clearly better than the system they had in place, and could believably show how much time their staff would save once they moved to our system. We didn’t win the deal. In a private moment many months later, the VP explained, “Kevin, do you know how much work it would be to move all the resumes and data out of our existing system into yours? Do you know how many hoops I’d have to jump through with our IT department to convince them that your system is just as secure?”
Example 3: I was advising a small company on how they should position and brand themselves in their space. Their initial focus was on service (everyone always says that), then reasonable price, then creative. Ultimately, looking at “what does the buyer really want? What’s in it for them?” They realized that they were selling to young managers who ultimately wanted to move up in the organization. These decision makers wanted to get noticed, to stand out, so they could get promoted. With that realization, the sale was very different. Make sure you demonstrate why you aren’t risky; make sure they know how easy you are to work with. And then frame the benefits into personal benefits. In a politically correct way, the sales angle has to be, “This innovative new feature certainly leads to better results, and will surely get you noticed by higher ups.” All the marketing and case studies featured former clients who had rolled out the innovative solution and won an award, got interviewed for a magazine, or eventually got promoted.
Remember, a B2B decision maker isn’t spending her own money. She will ultimately buy something that leads to growth and profits for her company, but only if it meets her other hierarchy of needs along the way.
Do you have an example of how you addressed these hidden needs? Let me know in the comments below.
Kevin Kruse is a NY Times bestselling author and keynote speaker. Get more success and tips from his newsletter at kevinkruse.com and check out keynote video clips. His new book, Employee Engagement 2.0, teaches managers how to turn apathetic groups into emotionally committed teams.