James Carbary

Founder at Sweet Fish Media

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How to Solve Group-Buying Dysfunction

James Carbary

Founder at Sweet Fish Media

Full Profile »

It’s easy to look at B2B sales as a one-on-one venture.

One sales rep sells to one buyer and closes the deal.

But the reality is that sales deals don’t happen in a vacuum. Often, when a sales rep speaks with a lead, that person does not have holistic purchasing power.

Instead, the lead will often be a part of a larger buying group. Rather than trying to sell to a single individual, you have to realize that you are actually selling to a group of buyers, all of whom have different ideas about your product.

We recently spoke with Garin Hess, Founder and CEO of Consensus, about this issue of group buying dysfunction. We’ll explain what it is and how to overcome the hurdles that you will encounter when selling to a group versus an individual lead.

What is Group Buying Dysfunction?

According to Corporate Executive Board (CEB), the average number of people involved in a group buying decision is 5.4. That means that you will often deal with 5 or 6 people when making a sale.

Simply put, group buying dysfunction is the problem that arises from trying to get many people on the same page about a single purchase.

It’s difficult enough to get a group of 5 or 6 folks to agree on where to eat lunch. Let alone, trying to get those people to invest thousands or even hundreds of thousands of dollars in your product.

It’s a bit more of a leap than deciding on whether to go for Mexican or Italian.

Also, 5.4 is just the average number. It’s entirely possible for there to be more people involved. The average could be higher for a specific industry or based on the complexity of the buyer organizations. In some cases, there could be dozens of people involved.

The more people you add to the equation, the greater the likelihood that there will be no deal.

Even with the average of 5 or 6 in a buying group, the chances of closing a sale can drop as much as 50% compared to the odds when working with an individual buyer.The more people involved in a buying decision, the less likely they are to make a purchase.

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To really understand the problems inherent in group buying and why it’s not going away any time soon, it helps to know how the dysfunction arose in the first place.

Basically, group buying dysfunction arose from a change in the sales landscape.

In the past, you could sell to whoever was sitting in the corner office, and they didn’t need approval from someone else to make a purchase.

Now, the culture has changed.

So many people are involved in buying decisions due to IT needs, regulations, and collaboration across departments, among other things. Everyone has a different reason for being involved in the decision process, and they are all using different criteria when evaluating your product.

Even if you are selling directly to a CEO or other C-Level individuals within the company, there’s a very good chance that they will consult others to gain input before making a decision.

Only about 28% of account executives in B2B sales know how to effectively sell in these situations. That lack of knowledge is a heavy contributor to the negative impact of group buying dysfunction.

The Psychology of Group Buying

The most difficult part of dealing with a buying group is the account executive’s inability to see into the black box of their internal communications. You have no idea what conversations are happening between the buyers when you aren’t speaking with them.

With that in mind, it’s important to understand the separate needs of the group members as well as the needs of the group and company as a whole.

What is the driving interest in your product overall? Where do the individuals’ interests align?

Having the answers to these questions makes it easier to target the individual and group concerns simultaneously and combat group buying dysfunction.

It’s also good to understand group buying psychology on a higher level.

Let’s go back to choosing a restaurant for a group lunch. Often what makes it so difficult to decide on a place to eat is the fact that nobody wants to step on anyone’s toes. Everyone is fine with every option, because they don’t want to offend another person.

This risk aversion translates to the group buying psychology. Individuals are less likely to advocate strongly for their position in fear of offending someone.People are less likely to advocate strongly for their position in group buying situations.

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Part of this reticence comes from a lack of desire to push against the status quo, but it is also often driven by invisible group dynamics.

For example, if you recently had an argument with the IT director, you might be uncomfortable pushing too hard for a product that he’s wishy-washy about in fear of offending him again.

That’s just one example of how interoffice relationships could figure into how willing a stakeholder is to advocate for the product they want.

On top of that, due to the varying personalities and positions of the buying group members, there will be divergent views on what is most important while choosing a product. Knowing what those differing opinions are help tailor the individual messages to different stakeholders when promoting the product.

Obviously you don’t have much, if any, control over these issues.

However, by understanding the psychology of how group members interact on a broad level and what specific things are important to them, you can begin to overcome group buying dysfunction.

How to Overcome Group Buying Dysfunction

From the previous section it is clear that there are issues on multiple levels that contribute to the seeming complexity of a sale that requires a buying group decision.

However, according to Garin Hess, there’s no such thing as a complex sale. Instead, there are complex purchases.There’s no such thing as a complex sale; only complex purchases.

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The distinction is important because the really complex issues that cause group buying dysfunction mentioned above are all on the buyer’s side, not the salesperson’s side.

After all, group buying dysfunction is a problem in the first place because there are so many people involved in the buying process.

So, what’s a sales rep or account exec to do?

Start Looking for Group Leads

The first step actually starts with marketing.

A marketer’s main priority is generally providing individual qualified leads for the sales reps to follow up on.

However, receiving a single lead from marketing does not help a sales rep who is dealing with a group situation due to the issue of group buying dysfunction.

In their demand generation campaigns, marketers should stop focusing on delivering qualified individual leads and instead focus on delivering qualified group leads.

If the sales rep has 3 or 4 leads grouped together from the outset, it significantly increases the chance of a sale. It also decreases the amount of time it takes to close a deal because all or most of the parties involved in the decision have already been identified.

Most deals involving a buying group fall apart within the early part of the funnel when the sale is really still in the marketing department’s hands. By identifying the invested parties early, marketers can help stop that drop off and get the deal moving down the funnel.

Discover and Analyze the Buying Group

Of course, the previous point also brings up the issue of finding the right people who would be involved with a group buying decision.

The best way to do this is also early in the marketing process. After all, education and discovery of your product generally happens well before the potential buyer ever interacts with a sales rep.

Consensus locates individual stakeholders through video-based product demos. The videos automatically configure to each member of the buying group for maximum impact.

Through this method, account executives can also see who viewed the video and who the viewer shared it with. By understanding how the individual interacted with the content, you can get an idea of the makeup of the buying group and what issues they are more concerned about.

While video is a powerful medium, it isn’t the only route. This can also be done through web content such as promotional materials and white papers. It can be worked directly into the marketing campaigns, so in many ways this step is an extension of the first.

The product itself will also help you figure out who might be in the buying group and how it would be best to market it to them. Who has the most to gain from the product or who would get the most use from it and in what ways?

While it’s unlikely that all of the people who could use the product will be part of the buying group, it gives you a jumping off point to locate and interact with possible stakeholders.

Find Your Internal Champion

Since you have no way of knowing what is happening between the members of the buying group, you want to have someone on the inside.

The internal champion is the individual from the buying group who will be on your side and promote the product for you.

In a non-group sales situation, they would have already closed a deal with you. Since they are part of a group, they have to bring the other members around to the idea of making an actual purchase.

The problem is that they aren’t used to selling your product. Chances are that they haven’t even used the product beyond perhaps a demo. They probably don’t know exactly who in their company needs to be involved in the deal or how to make an effective case for a purchase.

Instead of a salesperson, you are now a buying coach.

You have to help them figure out who to talk to and how to pitch the product. The internal champion is the one doing the actual selling; you just have to learn how to coach them on how to do that successfully.

Conclusion

Buying is no longer an individual endeavor.

Purchase decisions are more often made by a buying group of 5 or 6 people on average, and all of the members have different ideas and agendas.

To combat this, you have to learn how to sell to a group. By identifying group leads in the marketing phase of the funnel and teaching an internal champion how to sell your product for you, you can overcome the problem of group buying dysfunction.

This article is based on an interview with Garin Hess, Founder and CEO of Consensus. You can find this interview, and many more, by subscribing to the B2B Growth Show on iTunes. If you don’t use iTunes, you can listen to every episode by clicking here.

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