Whatever our views on the seismic changes that took place in 2016, most of us can agree on one thing: 2017 is likely to hold yet more surprises. Whether it is the impact of changing regulations and trading policy across the U.S., Europe, and Asia; the political instability of Europe; the timing of a Chinese slowdown; changes to interest rates and exchange rates; or simply differential growth rates across markets, uncertainty is a key feature of 2017.
Changes in Decision Speed
In an uncertain world, some decisions become increasingly time-critical. If your product or service is seen as a way to hedge against future change or take advantage of the current environment – using up budget, perhaps, or taking advantage of favorable exchange rates – you may see decision cycles speeding up.
For most customers, though, the buying process slows down under uncertainty. As future benefits become less certain and investment hurdles become more challenging, greater pain is needed to trigger action, and more (more senior) people become involved in the decision process.
For salespeople and account managers, this environment means an increased focus on what are arguably best practices in any case, including:
- Proactively stimulating demand by bringing insights to bear on specific client challenges, including those caused by uncertainty
- Building momentum by helping customers to quantify the cost of not acting (the tendency to loss aversion means that people are more likely to act to avoid a loss than they are to achieve a gain)
- Focusing on opportunities where that momentum is real and achievable
- Actively managing customer stakeholders, helping supporters to overcome internal barriers and create a critical mass behind the purchase decision
Changes in How Much People Need
Overall, we are still in the midst of a global trade boom, and for many companies, the fundamental business drivers, such as population growth and urbanization, remain strong. However, uncertainty can cause significant fluctuations in the level of demand…
- In different geographic markets, as a result of, for example, trade policy and interest rate changes in the U.S. or the outcome of key elections in the E.U.
- By product, as the price volatility of inputs and substitute products affects relative value
- By segment, as customers adjust their purchasing priorities in response to uncertainties in their own market or personal environment
Being aware of these fluctuations will allow companies, and individual salespeople, to focus their efforts where they will get the best return. This focus requires a proactive approach to assessing where demand is likely to be strongest and sensitive antennae to detect future shifts in demand as they occur.
Changes in What People Need
New needs will emerge as a result of uncertainty (as well as known market changes), and the best salespeople are proactive in helping their customers identify those needs. Formal sales planning tools can be particularly valuable in helping to uncover these opportunities. Examples include:
- Support for rapid innovation to capture market opportunities as they arise
- Local manufacturing and other supply chain factors to hedge against trade barriers
- Joint cost reductions to give pricing flexibility
These new needs can help shape how vendors invest in new capabilities, but they should also drive the conversations happening at an account level.
Changes in Decision Criteria
Customers – especially where procurement is strong – typically use a set of decision-making criteria to choose among alternative solutions for their needs. Uncertainty will change the relative importance of these criteria. For example:
- Cost may become more of an issue if the customer believes they need the ability to cut prices in a very competitive market.
- Cost may become less important if something else becomes more important, such as an increased need for flexibility due to uncertain volumes.
- In a particularly uncertain environment, speed to market may become a key concern.
- Investment payback periods are also likely to play a bigger part in the decision process.
So how does uncertainty change buying behavior, and what are the implications for how we should be selling?
The principles of good selling apply at all times: Be customer-centric, bring insight, uncover needs, assess decision-making criteria, manage stakeholders, identify and alleviate risks, remove barriers to change, understand how to negotiate, and so on.
However, when uncertainty is at a peak, the specifics of what and how to sell change – and the best sales teams recognize and leverage this fact. Indeed, in many industries, salespeople who are proactive and effective in helping customers to improve and protect their own businesses are a bigger source of differentiation than the product or service itself.