According to Brent Adamson, principal executive advisor at CEB and co-author of The Challenger Sale and The Challenger Customer, the average number of customer stakeholders involved in a B2B purchasing decision is 6.8 -- up from 5.4 in late 2014.
“That’s a 25% increase in just 18 months,” Adamson says.
Unfortunately, he doesn’t think this trend is slowing down.
The Causes of the Stakeholder Increase
Adamson points to four main factors behind the increase.
1) The after-effects of the Great Recession
“Organizations continue to be risk-averse toward large-scale purchases,” he explains. “No one wants to buy on their own. Instead of a senior decision maker pulling the trigger, you have buying committees.”
2) Solution selling
Adamson thinks suppliers have to some degree “brought this problem on themselves” out of necessity. To avoid commoditizing their products, companies have added additional capabilities and value to their offerings.
The problem? As the scope of your solution expands, so does the number of stakeholders.
“If your solution will help marketing and sales, both of those departments will want a say,” Adamson says. “And now contracts encompass more, so legal and finance need to get involved too.”
3) Continued globalization
Companies continue to expand globally, inevitably increasing the number of teams involved in a purchase.
If a business has one office in San Francisco, their HR department can buy a product independently. Yet once it opens new offices in Germany, England, and Spain, the San Francisco HR department will need to work with three other locations for the same purchase.
4) Decentralized decision making
“We’re seeing a strong tendency in companies to flatten [organizational] structures,” Adamson says. “The power to make decisions is going toward the bottom of the organization, or the ‘front lines.’”
Because a decision by an entry or mid-level professional typically requires sign-off from their boss, this trend means there are more people involved in the decision.
The Effects of the Stakeholder Increase
Adamson believes the growing number of stakeholders isn’t an issue because of the quantity of people involved, but because of the diversity of opinion inherent to a sales process with multiple prospects.
“Each stakeholder represents a different part of the organization, held to different metrics, with a different agenda and buying criteria,” he says. “They have to reach a common consensus.”
But the more diverse the group, the harder it is to agree. Adamson says diverse groups ends up settling for the “lowest common denominator”: They decide to study the problem further, buy the cheapest, most minimal solution, or simply table the discussion. These decisions help them avoid risk and save money -- two of the few outcomes almost all stakeholders find desirable.
“When the deal falls through or becomes a shadow of its former self, [Sales] asks, ‘What did we do wrong?’ We’re not selling effectively,” Adamson says. “But it’s not the seller’s inability to sell. It’s the prospect’s inability to buy.”
How Salespeople Should Respond
In the original study, Adamson and his co-author Matt Dixon, an executive director at CEB, discovered one type of salesperson was most likely to succeed in the modern world of multiple stakeholders: The Challenger salesperson. Challengers break through the noise with unique insights about their customers’ businesses, help them navigate alternatives, and provide ongoing advice and consultation. These traits perfectly position Challengers to transform a dysfunctional group of stakeholders into a unified team.
Adamson says since the study has been released, his team has realized the third aspect of the Challenger sale -- taking control -- is more nuanced than they originally thought.
“The Challenger Sale mainly discusses taking control of the negotiation conversation,” he explains. “However, in today’s buying environment, the salesperson must also take control of their prospect’s buying process.”
If a salesperson relies on the customer to guide her through the sale, Adamson believes she’ll be unsuccessful. The customer doesn’t know how to achieve consensus. Teaching him the steps involved in a purchase positions the salesperson as an expert and dramatically increases the likelihood he’ll buy.
To help prospects, Adamson recommends salespeople come to conversations prepared with the following information:
What information about the deal, solution, or product matters most, and to which stakeholders? (IT may care primarily about integration options, while Legal is concerned with privacy.)
Which options should they consider? (The buyer is a good fit for multiple products or solution types.)
Who should get involved? (Representatives from Sales, Operations, and HR.)
What questions will those people have? (Procurement will likely request periodic audits for the length of the contract; Finance will ask for discounts on tardy deliveries.)
How should your point of contact answer those questions? (Tell Procurement your company goes through an external audit once a quarter; tell Finance you reduce price by 10% for every 24 hours the stock is late.)
This knowledge will simplify the decision making process for buyers and enable them to agree on the best fit, not the cheapest one -- or worse, nothing at all.
It’s unclear when the average number of stakeholders will flatline. But with the right strategy, salespeople can survive and even thrive in this complex buying environment.
Originally published Dec 28, 2016 8:30:00 AM, updated August 31 2017