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How To Get To Know The New SMB Buyer

©All rights Reserved Peter Schofield

This is part 2 of a series on the challenge of targeting SMB markets and how the use of buyer modeling and buyer-based marketing help organizations to grow their SMB customer base. 

In the first article of this series, we visited two new realities.  One, that many Fortune 1000 and Global 2000 organizations are turning a focused eye towards growing their SMB customer and revenue base.  With revenue growth potential shrinking in larger strategic accounts due to budget and pricing pressures, many are dedicating attention and resources with more determination than in the past.  The second reality is that they are finding a very different buyer this time around than in the past.  Simply put, SMB buyers are more social, more sophisticated, more connected, and are transforming their buying behaviors at an accelerated pace.  New technologies opening their world to advantages only once afforded to large enterprises.

Waking up to these new realities has set up another challenge for executive leaders.  That is of how to get to know the new SMB buyer.  Here’s how one sales executive put this to me recently:

“One of the things we realized is that we have got to get to know our SMB customers.  If you keep in mind that we haven’t really dedicated much resource to this area, then we are lacking in knowledge per se’.  We’ve got to find out what is important to them versus just giving them some generic sales pitch.”

This is a very salient point for many organizations tend to view the SMB as a whole segment in of itself.  The reality is that the SMB is highly fragmented and consists of many layers of sub-market segments.  Getting to know what makes SMB buyers tick is, by no means, as easy as saying this is your SMB buyer.  Layer on top of this the enormous changes in buyer behavior, the invisibility of SMB buyers in their sourcing for information, and new empowering technologies makes this endeavor a higher mountain to climb.  It is no wonder many executives are walking out of their meetings where SMB growth is identified as a top priority saying – now what?

Getting To Know The New SMB Buyer

The first tough challenge is realizing that viewing the SMB as a single market and that rudimentary means of segmenting by employee size and revenue figures are not going to result in the understanding needed.  While vertical segmentation is of significant help, what is paramount is knowledge of how these sub-markets and buyers within behave.  What are steps that executives can take to understand the new SMB buyer?

Buyer Research: This has to be a clear mission.  Getting to know the new SMB buyer is going to take some level of buyer research.  It is going to take the integrated approach of committing to both quantitative and qualitative approaches to understand the full 360 degrees of the new SMB buyer.

Buyer Modeling: Depending on the degree of fragmentation in sub-markets, powerful buyer modeling can be an extensive exercise.  However, one well-worth the upfront investment to get to know the new SMB buyer in ways that transforms efforts into an order of magnitude competitive advantage.  There are several areas of modeling that by understanding them deeply, can make your organization relevant to buyers and core to their problem-solving:

Buyer Persona Modeling: What is important here is not to model the single archetypal buyer but to model the new levels of interactions buyers are having with newly formed ecosystems and networks.  They may be SMB but they are growing exponentially and organically by creating new ecosystems.  Buyer persona modeling represents composite archetypes based on behavioral research with a focus on identifying critical goals that drive buyer behaviors.

Buyer Scenario Modeling: To get a handle on the problems SMB buyers face and what confronts them, modeling buying scenarios can give your marketing and sales teams insight into how to be relevant.  Additionally, this gives you the ability to address fragmentation and identify sub-market segments that have the best optimal scenarios to be part of the SMB buyer’s solution.

Buyer Decision Modeling: How SMB buyers are making purchase decisions today is changing so fast and by sub-markets that not monitoring this aspect of a SMB strategy can put an organization behind the curve.  While looking at the buyer decision journey can be fruitful, in my qualitative research I’ve noted how the new SMB buyers are adept at more ad-hoc decision-making.  Furthermore, with the rise of ecosystems and networks, collaborative efforts in making purchase decisions are not so neatly streamlined.  Newer technologies are also making purchase decisions more decentralized than ever – making fragmentation on this issue even more complex.

Buyer Value Modeling:  SMB buyers’ value varies widely by sub-market segments.   Gaining insight and modeling how these values operate in their day-to-day world can help you to tailor offerings and communications to fit specific sub-market segments.  Depending on the industry and markets, values in the SMB take on a deeper emotive texture and can be a deciding factor in purchase decisions.

Avoid Big Data Trap

With the rise of big data, there will be a tendency to try and “cut the numbers” every which way to make sense of the SMB market challenge.  When dealing with 5,000 SMB accounts to 150,000 SMB accounts, the tasks of getting to know these SMB buyers at a deeper level can look downright daunting.  Analytics will play an important role towards reaching understanding.  I also contend and advocate that qualitative and predictive buyer modeling is essential to integrate into the mix of discovering the new SMB buyer of today.  Buyer behavior within the SMB world is rapidly changing.  A reasonable assumption can be made that in some SMB sub-market segments it is changing at a faster pace than that of larger organizations.

The combined use of analytics and predictive buyer modeling can yield an insightful picture into how these new behaviors translate into uncovering why buyers make purchase decisions.  And, get closer to the holy grail of uncovering the reasons why they would change.

Next Up: The Importance of Buyer-Based Marketing in SMB

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Slow Death of the Funnel: Why Buyer Choice Matters to Revenue

IT Buying Process © All rights reserved by Kenny Madden

This is part 1 of a limited series on why buyer choice modeling is the new view B2B Business must adopt to improve revenue performance and develop long lasting relationships with buyers. 

Finding the keys that unlock improving revenue performance and achieving growth is becoming harder and harder as we go from a single buyer model to that of more interdependency among ecosystems and networks by B2B buyers.  B2B marketing and sales is still predominantly tethered to traditional ideas, approaches, and systems that are being dragged into the modern era.  While we have seen modifications, the idea of the traditional funnel is still at the core of many B2B organizations today.  It matters little whether you keep it vertical or flip it sideways and make it horizontal – it is still suggesting a funnel that winnows down opportunities down to a “buy” decision.

As the modern era rages on with increasing speed where the Internet and Social Technologies are converging into new forms, the oversimplification of the funnel becomes more and more apparent.  Simply put, buyers just don’t act or behave in that way anymore.  Evidence suggesting that buyers are behaving well out of the norm of our conventional views of the funnel as well as the buying process is abundant from surveys.  These behaviors cannot be represented in the view of a funnel.  DemandGen, for example, reported that B2B buyers don’t talk to a sales rep until they’ve conducted independent research 77% of the time.  There are plenty of surveys around showing buyers acting and behaving differently – yet – the willingness to snap the tether cord of the funnel doesn’t appear readily apparent.  It does beg the question of: what is going on?

I believe that is still an open question without an answer.  We are about to see an uptick in Big Data being touted as the next Big Thing.  Why?  To figure out what’s going on.  My thinking is that if this Big Data explosion is designed to tell us what’s going on within the confines of the funnel – then B2B organizations can find themselves in the untenable position of explaining why Big Data is not telling them anything.  Here’s why: we will learn a lot about what buyers purchase and we will learn a lot about how they are purchasing – perhaps.  What is missing is the most important question of all – why.  And there are two very important components to the why question:

First, why are they buying and second, why are they making the choices they make. 

Traditional marketing and sales, oriented towards the funnel, don’t answer these why questions very well.  To get close, it may take years of piling on data after data to get a clue.  This is a very expensive proposition for companies to take on today.

Despite the many super hyped concepts coming to the forefront attempting to address the 77% who are not getting a sales rep involved until much later, the funnel – whether vertical or horizontal or even cyclical – seems to be glossed over like a sacred cow.  The language of these many new concepts is spoken through the prism of the funnel – still.  For example, if we take an often used expression of the first part of a funnel – awareness – many of the new concepts are really talking about how to make awareness happen differently in the new social buyer era.  But is that what’s really going on?  I don’t believe so.

Before moving on to what I believe, let’s review limitations of funnel thinking against the new realities of today:

Buyers Explore vs. Become Aware.   B2B buyers are less likely to become aware of solutions and more likely to explore and find them.  And they are making significant choices during their exploring based on what they find.  Unlike consumer purchases where there is an object of purchase desired – for example a HDTV – B2B buyers are making choices on which path they will invest more time hiking and exploring.

Buyers Are Part of Ecosystems and Networks.  The age of the single buyer has come to a close in complex B2B environments.  While there may be a target buyer per se’, they are increasingly dependent upon various ecosystem participants who are directly impacted by purchase decisions and have a voice in these decisions.  The funnel is very limited outside the scope of the single buyer.

Buyers Just Don’t Make New Buys.  In the complex realities of today, buyers are not repeating the new buy orientation of the funnel.  There are many choices being made around how to modify different alternatives.  In the age of just-in-time – and now in the age of real-time, buyers look ahead into the longevity of repurchase – or continuous supply that feeds the ecosystem with little disruption.

Buyer Views Extend Beyond Purchase.   The funnel is based on the short-term view of making the sale and it is measured in quantities.  In today’s environment, the funnel cannot accommodate the long term views buyers have on the overall buying experience and doesn’t account for many factors that happen well after the sale.

Given these limitations, I believe that companies today must attempt to understand buyer choices and adopt a different model.  A Buyer Choice Model that begins to reflect buyer behavior and provides the language and terminology needed to understand why buyers choose as they do.  It puts the buyer at the center of B2B marketing, sales, and service and reflects, more accurately, that buyers are making multiple choices throughout their actions as well as behaviors that ultimately lead to a purchase decision.  But – it doesn’t stop there at the purchase decision.  There is a continuous loop that extends beyond the purchase decision.  The idea of buyer choice modeling is to understand choices that are being made in this continuous loop – so as not to be left out of the loop.

Next up: The elements of the Buyer Choice Model

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