Thursday, June 21, 2012

Technology Buyers Tell Us How to Speed Up the Buying Cycle

IT leaders making enterprise-level technology purchases report that their buying cycle has increased by more than 20% in the last three years, according to IDC's 2012 Buyer Experience study. They are not happy about this fact and were not shy about telling IDC about how vendors can speed things up.

IDC's 2012 Buyer Experience Study reveals that CIO's making enterprise-level technology purchases report that their buying cycle is now longer than five months when multiple vendors are competing for their business.

I find several things interesting about this fact.

1. The length of the B2B tech buying cycle continues to increase.  In 2009, the buying cycle was about 4.5 months and is now 5.4 months. It has increased more than 20% in three years.

2. IT executives have consistently told IDC that they would like their buying cycle to be shorter. Three months seems to feel about right to them – which is 40% less than what they currently experience. The CIO's readily admit that their own companies are to blame for most of the delays – 60.8% of the delay they attribute to their own buying process complexity.  More people are now involved in each decision, for example. However, 35.6% of the delay, IT leaders say is caused by poor marketing and sales processes on the part of the vendors.

Clare Gillan, IDC Senior Vice President of Executive and Go-to-Market Programs, told the audience at the recent IDC CMO Advisory client meeting that survey participants were very clear on how vendors could help them speed up the buying cycle. Here is advice from the IT leaders along with just a few quotes:
  • Listen: "Listen to what we are asking and what we want before presenting a cookie-cutter one-size-fits-all solution."
  • Justify: "Help us write the business case."
  • Honesty: "Put everything about your product on the table, including the short-comings."
  • Pricing: "Provide all available options with associated pricing up-front."
 Respect, service, and transparency – these are the communication attributes I perceive when I read the survey results. Are these attributes in your persona descriptions?

3. One more thing I find interesting about the reported length of the buying cycle:  Does five-plus months seem short to you? In contrast, marketing and sales leaders reported that 19 months is their average sales cycle for enterprise-type deals according to IDC's 2011 Tech Marketing and Sales Productivity Benchmark studies.  I don't think I have ever heard a B2B tech marketer or sales leader report a sales cycle of just a couple months - except for small ticket items, repeat purchases (which would not be included in this survey question's category) or the occasional purveyor of some super-hot-can't-wait solution.

My guess is that buyers have a different definition of when the buying cycle starts than do marketers and sales people.  What does this mean to marketers who are engaged with buyers in very early stage conversations? Something to think about.
 

9 comments:

  1. Kathleen, thanks for the info and in particular point #3 - it does seem short and is worth diving into! We're working to gain better understanding of our customers' internal buying processes so we can help build stronger business cases with prospects (point 2). Great reminder to beware of my own biases and assumptions in that process.

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    1. Thanks for the comment, Erin. Love to hear of the key discoveries you make as you investigate.

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  2. Doesn't the fourth advice to "Provide all available options...upfront" somewhat contradict the first advice to avoid "presenting a cookie-cutter one-size-fits-all solution" before listening "to what we are asking"?

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    1. Interesting point... it's difficult to know which options to present up front until you have had a chance to listen.

      My recommendation is to pay attention to the essence of the buyer's advice rather than the specifics. Buyers do not want to be toyed with. They don't like important facts and options kept hidden. And buyers want vendors to do some homework before discussions so that the buyer's time is well-spent.

      How these requests get implemented in communications depends on the product.

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  3. Hi Kathleen,

    In regards to definition of buying cycle, I'm wondering if this is being measured by buyers from the time they actually begin the sales conversation? That would account for the gap from 5 months buyers refer to and the 19 months that Marketers refer to.

    If buyers measure from the time they enter the sales conversation, how did they end up in that conversation? Months of trolling for information and exploring research and options - right? So two very different perspectives could be in play here. Marketers have to make sure that buyers end up in those conversations with our salespeople, therefore we have to start much earlier - perhaps before our buyers are even truly aware that they're looking to solve the problem we can help them with.

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    1. Hi Ardath,
      I agree with you that there are two very different perspectives.

      You may be right that buyers are measuring their buying cycle from the point where they start talking with sales people. Of they may have some other starting point - such as when a project is approved or budget assigned.

      Regardless of the specific start point (although I'm interested in what the trigger is), marketers are clearly talking with buyers far before the buyers consider themselves to be "buyers", as you say. That should be a positive! Marketers (or sales reps) can get a chance to shape the conversation.

      However, marketers and sales people often miss the fact that this early conversation is problem-oriented, not product-oriented.

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  4. Hi there,
    I would agree with Ardath, in our experience the technology buying cycle starts with an influencing phase, well before the discussion with sales starts. That's why the messaging coming from marketing and sales must be closely aligned and the tactics one chooses should also be synchronised presenting a unified "go to market" tactical plan that aligns not around your internal sales and marketing function but around the buyer and the buyer's journey from completely unaware of you, your products and solutions to loyal customer.

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    1. Well put, Chris. That sychronization you speak of is super-important as buyers continue to increase the percentage of problem-solution information they consume from digital sources. Any company who still thinks that marketing can disengage when they "hand-off" a lead to sales is playing a dangerous game. Buyers are online for the entire buyer's journey.

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  5. Transparency is certainly a key issue. I have come across a number of CIOs who are putting that high on their agenda when dealing with vendors. However they have a lot of trust to build with the vendor community as well...starting by ensuring their procurement people don't spoil the party.
    An even bigger challenge for all but the best IT vendor sales and marketing teams however is the question about helping the CIO build the business case up to the CEO/CFO. The further away from a vertical software application the solution is, the less likely the vendor's sales team is to be able to articulate the business case in business, as opposed to technology terms.

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