In a 2020 survey of senior marketing leaders by Gartner, participants were asked to identify their company's primary strategy for fueling growth into 2021. The two most frequently identified growth strategies were increasing sales of existing products to existing customers (39% of respondents) and introducing new products to existing customers (34% of respondents).
These survey findings demonstrate the importance marketing leaders place on increasing revenues from existing customers. But the reality is, many companies struggle to achieve their goals for revenue growth from existing accounts.
Other research by Gartner explored what factors drive growth from existing accounts and how marketers can support this objective. In this study, Gartner surveyed 1,100 B2B customers who had recently considered continuing or expanding their relationship with an existing supplier. The research tested three potential drivers of account growth - customer satisfaction, willingness to change, and decision confidence.
The Importance of Decision Confidence
The Gartner research identified an important distinction between a repurchase decision and a decision that involved expanding the relationship with a supplier (a "growth" decision). The study found that customer satisfaction had a major impact on repurchase decisions, but no significant effect on "growth" purchases. In contrast, Gartner found that decision confidence increased the likelihood of a positive growth decision by 2.6 times.
Gartner defined decision confidence as: "The belief and feeling of affirmation that the buying group is exercising sound judgment."
While the Gartner definition captures the essence of the idea, I would argue that decision confidence is a multifaceted phenomenon that has three major components.
- Confidence in the specific product or service selected
- Confidence in the company's ability to successfully implement any organizational changes required to reap the full benefits of the product or service purchased
- Confidence in the soundness of the process used to make the purchase decision
- Buying Team - Who should be on the buying team? How large should it be? Who should lead the team? How will the team make decisions?
- Needs/Requirements - How should the buying team identify and prioritize the company's needs and requirements pertaining to a new product or service? Hint: A multi-page "checklist" of requirements isn't the best approach.
- Potential Vendors - How should the buying team identify relevant potential vendors and then decide which potential vendors to engage with?
- Solicitation Vehicle - What type of solicitation vehicle should the buying team use - an RFI, an RFP, or an RFQ? How should the team structure the solicitation document?
- Demos - How should the buying team structure and conduct demos to make them more relevant and valuable?