A buying team at a large manufacturing company saw sales pitches from two different vendors selling similar automation products. The first delivered a solid pitch outlining key product benefits and ended by offering a discount if the company bought by the end of the quarter. The buying team said they’d be in touch because “our current solution isn’t great but it’s not broken enough to buy this quarter.”
Unrecognized customer urgency requires the technology vendor to provide insights that customers did not previously recognize and that compel them to act
The second company delivered a good pitch, yet spent most of the presentation outlining how their product would automate certain labor-intensive processes that were costing the company millions of dollars each year in late shipments because the line worker had missed dozens of work days from repetitive stress injuries.
The buying team eagerly asked for a full product demo from the second company. A tale of two sales pitches outlines how highlighting a previously hidden, but commercially important, business need can shorten a sales cycle.
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Customers delay or cancel buying efforts when they are not convinced of the need to change what they are doing within a specific time frame. Technology service providers (TSPs) often create artificial urgency to spur action and shorten sales cycles.
“While there are four types of urgency, the artificial urgency path is pursued by TSPs most often and is the least effective and least customer-focused approach,” says Laurie Wurster, Senior Director Analyst, Gartner. “Avoiding this approach is critical to accelerate deals and build trust.”
Understand the four different types of urgency paths to better drive customer action.
Customer-acknowledged
Urgency that is acknowledged by the customer has a high probability of action because a time frame has been identified. This urgency is often driven by external factors, such as regulatory changes (e.g., General Data Protection Regulation [GDPR]), events or market pressures. Customer-acknowledged urgency requires the least effort for TSPs because the urgency already exists.
Develop content that helps customers understand typical project timelines. Guide sales teams to work with customers and create a setback schedule from the “go live” target to determine when a purchase needs to be completed to achieve results by a specific date.
Customer-unrecognized
Unrecognized customer urgency requires the TSP to provide insights that customers did not previously recognize and that compel them to act. Commercial insights challenge customer norms by presenting information in a different context and connecting it to critical business goals. Insights that create unrecognized urgency view the customer’s business from a macro level and connect back to the value of the TSP solution.
Invest in the development of commercial insights that connect product value to business performance and drive the creation of interactive calculators that enable customers to understand the TSP solution’s exact potential for their business.
Read more: Calculate Potential Market Share Size for a New Product or Service
TSP-forced, legitimate
There are cases where urgency is driven by a vendor’s situation, such as the end of a product’s life, security upgrades or consolidation due to acquisition. Customers may not like the imposed deadlines of this urgency, so it’s important to give them time to introduce the change into their schedules and to take all the actions required to enact the change.
Execute a clear, complete communication plan that provides customers with critical information on time frames and actions required.
TSP-forced, artificial
Forced, artificial urgency from TSPs has a high risk of damaging the credibility of both the individual salesperson and the vendor and should be avoided or minimized. These tactics try to create deadlines and reasons for action in a specific time frame, such as end-of-quarter deals or communication of future price increases, and have no connection to the business need of the customer.
TSP CEOs should strive to connect urgency to customer situations rather than to vendor situations.
The post Technology CEOs: Create Valuable <span style="color: #000080;">Buyer Urgency</span> for Shorter Sales Cycles appeared first on Smarter With Gartner.