Turbocharging Your B2B Sales

Less is more: Minimum Viable Sales

Image: Markus Spiske - Unsplash
Image: Markus Spiske – Unsplash

Unless they benefit from an exceptionally strong vision or leadership team in place, most organizations seem to function on an everyone has a veto, no one can make the decision basis.

This feature of organizations is the bane of B2B sales.

A Google search for B2B sales conversion rates yields results that hover between 1% and 10%, depending on whether you start counting at lead generation or at opportunity identification.

According to this report by Gartner (p. 13), B2B buying stakeholder groups are getting bigger. Somewhere between four and nine different stakeholders are typically involved on the buy-side, resulting in considerable sales cycle time dedicated to the process of reconciling disparate requirements and building consensus.

And increasing chances of a negative decision.

Not a pretty picture

Now, let’s assume you have a killer product or service. It’s so good that once you have the chance to pitch or demo it to the right buyer, you have a 50% chance to close the deal.

Let’s further assume that you have an (unrealistically high) 50% chance to convince any additional stakeholder the buyer involves in the process. The laws of probability tell us that you have a 50% x 50% = 25% chance to close a deal if two stakeholders are involved, 50% x 50% x 50% = 12.5% with three involved, and so on. You get the drill.

This is how your chances of closing a deal dwindle as the number of stakeholders you need to convince increases:

Number of 		Probability of
Stakeholders	        Closing Deal
	1			50.0%
	2			25.0%
	3			12.5%	
	4			6.25%
	5			3.13%
	6			1.56%
	7			0.78%
	8			0.39%
	9			0.20%
	10			0.10%

It’s not a pretty picture. In fact, let’s see the picture:

Sales Conversion Rate vs Number of Stakeholders Involved - Image by the Author
Sales Conversion Rate vs Number of Stakeholders Involved – Image by the Author

From this analysis, a couple of things that you can do to improve your chances of closing a deal follow:

Focus your sales

When pitching your product or service, you want to identify the one stakeholder in the organization that has both the most to benefit from it, and can decide on her or his own.

Recounting his experiences in B2B sales, VC Clint Korver talks about how getting separate positive decisions from multiple buyers in different organizational silos is ’a nightmare’, and how his most successful B2B products were those that required a single decision-maker:

“The big successes in enterprise, they are almost always: We’re selling to the VP of HR, the VP of manufacturing, or the VP of finance. We’re not selling to multiple of them.”

Focus your product

When developing your product or service, you want to narrow down your value proposition so that it delivers clear value to a very targeted customer.

The one stakeholder whose Yes will be enough for you to close the deal.

MVP thinking may often be argued for on technical grounds. This is as strong a commercial, pro-MVP argument as they come.

In short, focus your resources

A valid counter-argument to this line of thinking would be that large projects are more profitable, and inevitably involve more stakeholders. Perhaps so, but that’s a luxury problem to aim to have, when you get there.

Meanwhile, the question remains: Can you afford the risk and resources necessary to take on a project that requires multiple yeses from multiple stakeholders?

We said above that this approach is very much in line with MVP thinking. In fact, think of it as MVS, Minimum Viable Sales, and a clear case of less is more.

Read the original text on Medium.

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