What’s vexing our prospective customers? What have we as sellers failed — in many markets — to truly resolve for them? Why are they struggling to make successful decisions?
While there are different issues to consider in different markets, we can identify certain patterns that have emerged. In today’s markets, our prospective customers are struggling with:
- Risk and Uncertainty. As the recent collapse of credit, property and stock markets suggests, customers face immense risks when they invest heavily in a particular offering. Individuals that trusted their financial advisors to help develop a plan that would serve them over time are
stung by the news that their 401ks have plunged in value. While the advisors will argue that the markets will rebound as they always have in the past, the sense of anxiety is clear and present — contributing to an individual’s decisions regarding other potential purchases. Similar concerns about risk eventually lead to the tech bust at the turn of the millennium. Buyers began to question the value of the products on offer — and the bubble burst. When prospective customers lack confidence about the direction of future events, they are likely to withdraw and become more difficult to engage.
- Choice and Confusion. While most of us want choice, there is a limit to how much choice we can manage. Right now, individuals are bombarded with messages, offers and options. One study byYankelovich found that the number of marketing messages an individual confronts has risen from 2,000 a day in 1978 to 5,000 a day in 2008. Even in B2B markets, the diversity of options available tends to overwhelm prospects. They are often paralyzed by the array of products on offer — unable to take a step forward and make a decision. Or, they will make a decision based primarily on price as the distinctiveness of offers presented to them is lost. In their confusion, they gravitate to the simplest variable in the decision equation: price.
- Increasing Complexity. With few exceptions, complexity is growing. Whether the issue revolves around networking a home of consumer electronics devices or implementing a customer relationship management system, the number of implications that emerge is rising considerably. With few exceptions, it’s not enough to simply buy the product and use it. That may have worked at one time with a toaster or a TV. It no longer works with a personal computer or a wireless phone. These products no longer stand alone. They must be networked and connected. Similar with companies that are investing in business technology or professional services. They can’t necessarily buy a product or hire a consultant and expect the problem to solve itself. Questions of leadership and communication, process redesign and organizational change must be addressed if these investments in complex solutions are to pay off.
- Unmet Expectations. One of the most damaging issues now affecting buyer confidence is the growing gap between the expectations set and the expectations met. Product sellers often think in terms of the quality and features of their offerings. Solution providers think in terms of the unique quality of their services and capabilities. But buyers think in terms of results. They aren’t necessarily interested — or primarily interested — in all the bells and whistles. While styling is certainly important and certain features carry critical benefits, the consumer wants to know that the automobile is going to run without interruption and that the extended warranty plan will cover key problems that emerge. The company that invests in a new networking platform wants to ensure that certain levels of service are attained — and uptime is high. When these expectations go unmet, disappointment reigns. This problem becomes particularly critical when a company tries to expand the relationship and present added offerings.
- Trust and Credibility. Trust in business is at an all time low, according to surveys by Gallop and other organizations. Considering the growing number of companies now heading to Washington for a handout of your tax dollars, who do you trust? GM? Chrysler? Ford? Citicorp? AIG? Freddie? Fannie? You get the picture. Companies are up against high barriers of mistrust — and low levels of confidence. Today’s customers aren’t sure who they can turn to — and who they can count on. They are shaken. While the economy will most likely rebound within the next few years, the experience of seeing Fortune 500 companies begging Uncle Sam in the midst of economic crisis is not likely to be shrugged off so easily. Trust also suffered during the last downturn as dotcoms and tech companies reaped the backlash of all their overblown promises. But again, it’s unclear that the trust gap is merely a cyclical phenomenon. Buyers need a reason to believe. They need to trust sellers. They need to find them credible. The bottom line is that they will expect much more from sellers in order to complete the transaction going forward. When the offer at stake requires a difficult decision, trust is the currency of the realm.
While buyers can’t avoid making decisions altogether, their decisions have become more difficult and demanding. Certainly, the environment in which they decide has become more threatening. As individuals, they face severe risks to their personal wealth and esteem. As members of organizations, they feel the threat of downsizing and cutbacks. Decision teams have already begun to draw out their decision cycles — or have canceled planned investments and purchases altogether.
So buyers are struggling to buy. They have their reasons — as you can see here.
The question is whether sellers could address many of these concerns by taking a different approach. As we’ll be exploring in later posts, one key way of addressing them is by providing trustworthy and reliable guidance.