With A Straight Bat

B2B Sales | Marketing

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Now and then, I get into this aberrant zone of looking to the past in hindsight and comparing it with the current-day reality. Putting the two side by side is an exciting drill—rich in bringing out perspectives on how things have changed and evolved.

Today, I pitch into the nuances of a freakish shift that has complicated the B2B purchasing process. To explain it succinctly, let me borrow its articulation from Harvard Business Review—“The mindset of buyers is shifting on two fronts: the time horizon of their focus, and their definition of value.”

As expected, when the economy is slowing down, assurance of a purchase leading to a long-term gain is like a blurred fantasy. Understandably so, it does not cut the mustard with B2B buyers, who want their profit ‘here and now.’

Similarly, the definition of value (given the short to the near-term horizon) is either locked in the commercial on offer—the price of purchase, discounts, the terms of payment—or the perceived value of that little extra, or the trust in a seller-buyer relationship.

The climb is steeper for companies operating in a commoditized market with not much to differentiate.

So, what should B2B sellers do when their clients cut costs?

• Communicate with your clients: Reach out to them for an open conversation on how the current situation impacts their business. This requires active listening, asking questions, and demonstrating that you care about their business. Done well, this helps you understand their needs and challenges, and you may be able to offer solutions that can help them save money without compromising on quality.
• Focus on value: While price is vital in B2B purchasing decisions, businesses can still differentiate themselves by offering value-added services and justify charging higher prices by focusing on delivering high-quality solutions with a clear return on investment.
• Leverage technology: Technology can help businesses streamline their operations and reduce their costs, enabling them to offer more competitive pricing. You must have a robust digital backbone that allows your business to adapt client engagement to every situation.
• Identify cost-saving opportunities: Review your products and services to identify areas where you could potentially offer cost savings to your clients. For example, you could explore ways to reduce your costs and pass those savings to your client or bundle products or services together to offer a discount.
• Focus on customer retention: Invest in your existing client relationships by offering exceptional client service, tailoring your service to meet their specific requirements and current definition of value, and providing value-added services and solutions. Include personalized attention and customizing service offerings. You could offer additional training, consulting, or other services that help your client succeed.
• Diversify your customer base: If a significant portion of your business comes from verticals that are cutting costs, it may be time to diversify your client base. Look for new industries or market segments that could benefit from your products or services, and invest in marketing and sales efforts to reach those clients.

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One Final Recommendation

(This measure goes at the end because you must survive a slowing economy and maintain profitability just like any other business). It’s clear and evident that business competition intensifies when economic conditions are challenging. As a result, companies may have to work harder to win new clients and retain the existing ones, which can lead to increased price sensitivity among buyers. It can also lead to lower demand for products and services, putting the squeeze on sellers to lower their prices to maintain sales. 

• Offer competitive pricing: In tough times, businesses must offer competitive pricing to win and retain clients. This means they must know what their competitors charge and adjust their pricing accordingly. Cash flow can also be a significant challenge for businesses when the economy slows down. To help your client, you could offer flexible payment terms, such as extended payment periods, payment plans, or early payment discounts.

Photo by Amy Hirschi on Unsplash