Key Buying Criteria: The Path to ‘Yes’
Key Buying Criteria: The Path to ‘Yes’
This article is based on an episode of B2B Revealed. The audio version is available here.
Understanding customers’ key buying criteria is vital to having a competitive edge. To give the people what they want, you have to know what they want.
As much as we’d like people and companies to know exactly what they want and how to articulate it clearly, that just isn’t often the case.
When figuring out what motivates B2B companies to purchase a product or solution, you’re going to have to do some digging. In-depth interviews (IDIs) with competitor customers and the customers you wish you had can uncover a treasure trove of information.
Here are a few questions to ask competitor customers and aspirational customers to help you uncover B2B companies’ key buying criteria. You can then exploit that knowledge in your sales and marketing efforts.
Why is the company searching for a replacement solution?
It’s good to start with the organizational or business need that caused the search for a replacement solution in the first place.
The solution isn’t needed to solve a problem that appeared out of thin air. If companies are looking for a new solution, they have realized that there may be an opportunity to do an old job more efficiently.
Look at the way the Internet of Things (IoT) is shaking up industries. Say you own a fleet of vehicles. With the IoT in play, you’re probably thinking very differently about how to instrument, track performance and price those vehicles than you would have 10 years ago.
Did the company consider DIY? Why are they looking to buy?
It’s also important to consider whether the company could perform the job themselves. Why did the company decide it was better to purchase an outside solution?
No outside solution can truly fit the needs of a company better than the company could itself. However, many companies don’t have the resources for such a DIY approach. Before investing a lot in chasing after a potential customer, make sure they don’t have the internal capabilities or organizational structure to develop their own solution.
If they don’t have the internal capabilities or organizational structure, make sure to highlight how your solution solves problems without requiring them to meet those needs.
What functionality is lacking in the company’s current solution?
Nothing is perfect. With any business solution, the company has to compromise. Maybe the features were great but the price is a little steep. Maybe one important integration is awesome and another only so-so.
You should find out what compromises the customer made to go with their current solution.
If your solution is of similar quality but wouldn’t force the same compromise, you have yourself a market opportunity. You may need to make some adjustments to meet that opportunity, either in product development or in what is being amplified in your sales and marketing efforts.
Which features tipped the scales?
Next, ask which features were considered the main reasons for making the purchase.
Do you have these features? If not, they should be on your roadmap.
Is the company still using the features that drove the sale?
Maybe a competitor’s sales team got the company excited about features that weren’t actually that great when put to real world use.
This is particularly true in the software industry, where the term vaporware was invented.
In-depth interviews with competitor customers can bring a wealth of information. Targeting these folks can reveal the features that remain beloved and in use.
Which features are companies using more than expected?
Competitors tend to talk up the features they think are the most important in their marketing efforts.
However, their customers may value some of the features that get far less airtime.
Again, in-depth interviews with employees of companies that have been using the solution for months or years can reveal important features that aren’t as visible when examining the companies’ marketing materials.
Is this solution one of many bought from the same vendor?
Another area to probe is whether this product was actually the second, third, fourth, fifth product that was bought from a given vendor.
When a customer opts for the competitor, you want to know whether you’ve lost to a product or a platform. Does this customer prefer to buy individual products that are best-of-breed? Or would they prefer a platform from a single vendor?
Microsoft, Oracle, and a lot of long-standing tech companies have leveraged the platform model for quite some time. Now newer companies like Amazon and Google are essentially doing the same thing with their various cloud offerings.
Many customers prefer a platform instead of a collection of point solutions. This preference needs to be factored in when considering key buying criteria.
How much did price drive the sale?
You want to figure out if the customer was willing to pay a premium and if it was a factor in their key buying criteria. Was low cost the primary concern? Or was money no object?
You also want to identify which features they were willing to pay a premium for and which features were merely table stakes.
Does the company prefer a subscription or perpetual pricing model?
In the technology sector, many products are turning into services. Customers are getting increasingly used to the idea of a subscription or rental model as opposed to some kind of perpetual license or upfront costs.
In-depth interviews with competitor customers may tell you that even though you have comparable features and greater capabilities, customers would rather rent a solution than buy it outright.
In other words, your pricing model (and not your price) could be losing you deals.
Key Buying Criteria over Features
Many organizations focus on producing all the features customers might need. Others focus on matching every competitor in the market, feature by feature.
Neither approach is the right one.
The focus needs to be on buying criteria. That way you know what features to build today, which ones to never build, and which ones you can plan to build at some point in the future. That’s the way to win in B2B.
This podcast is brought to you by Cascade Insights. We specialize in market research and competitive intelligence for B2B technology companies. Our focus allows us to deliver detailed insights that generalist firms simply can’t match. Got a B2B tech sector question? We can help.
Image used courtesy of Maxsim/Fotolia.
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