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
These components of decision confidence are obviously related, and it's unlikely that a growth purchase decision will be made until the buying team (and in some cases other senior business leaders) develop all three types of confidence.
Marketing's Role in Cultivating Decision Confidence
Marketers have an important role to play in cultivating all three types of buyer decision confidence given that B2B buyers are relying more and more on content to support their evaluation of potential purchases. It's important to recognize that decision confidence plays a vital role in growing revenue from both existing and new customers. It's also clear that marketers are doing a better job with some types of buyer decision confidence than others.
For example, many marketers are doing a good to very good job cultivating buyer confidence in their company's products or services. In fact, most of the content produced by marketers is designed (at least implicitly) to accomplish this objective.
Some marketers are also doing a good job supporting the development of buyer confidence in the ability of their company to make the organizational changes that will be necessary to reap the full potential benefits of a new product or service. A growing number of companies now have a dedicated customer success function that is tasked with helping customers maximize the value they obtain from the company's products or services.
Overall, marketers have been less effective at cultivating buyer confidence in the soundness of the process used to make purchase decisions. To be fair, some marketers - especially those in the technology space - have created "buying guides" or similar resources for at least some of their solutions. Over the past two-plus decades, I've reviewed dozens of these buying guides, and unfortunately, most of them focus almost entirely on the attributes, features, and capabilities that prospective buyers should look for when evaluating a particular type of solution.
While identifying critical product or service attributes, features, and capabilities is obviously important, more is needed for a sound, effective, and efficient buying process. Here's a partial list of the additional questions that a comprehensive "buying instruction manual" should address.
- 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?
The specific content of an effective buying guide will, of course, be dictated by the nature of the product or service and by the size of the required financial investment.
Marketers must also recognize that a buying guide will only instill decision confidence if buyers perceive it to be objective and unbiased. Therefore, when developing a buying guide, marketers must resist the urge to create a document that explicitly or implicitly favors their company's solution. The sole objective of the buying guide should be to help prospective buyers make the best possible decision for their organization.
Post a Comment