It cannot be denied that COVID-19 has greatly impacted the business landscape.
Budgets and forecasted revenue have gone off course from their projected paths while business priorities and investments are shifting due to the vastly different economic conditions than what was anticipated for 2020.
Due to uncertainties brought by the pandemic, C-suites are focusing on conserving their cash flow and holding off on investments to keep further risks at bay.
In light of the current buying patterns, how do you persuade decision makers that your solution can be of immense help to their business continuity and growth? How do you reverse their risk-averse decision making?
Financial Uncertainty
Excluding industries that are thriving or unimpacted by the outbreak, the majority of businesses that are negatively affected have taken steps to tighten their financial belts.
According to our latest Executive Trend Survey with over 1,100 decision makers, 59% of top-level executives across Europe are revising their budget plans to ensure business continuity while 42% are preserving their cash flow.
The budgeting strategies are due to expected revenue drops in the coming months, whereby 44% foresaw an economic downturn in the next 6 months while 22% estimated decreased revenue throughout 12 months.
The financial setback is also affecting businesses’ financial plans for 2021 with 38% predicting a lower budget for next year, thus explaining the aversion to taking risks in technology and solution spending.
More Stakeholders Involved
Cost-saving measures and coronavirus aside, businesses have also been seeing a longer decision-making cycle as more stakeholders are involved in investments and spending strategies.
Back in 2014, the average number of decision makers in a purchase was 5.4, but has since risen to 10.2 in 2018, which can include multiple C-levels, executive board members and senior managers. When more individuals are involved in a purchase, the situation can become complex as each person has their own goals and objectives to achieve.
“As more decision makers join the debate – procurement, finance, legal – so the decision-making process becomes extended and watered down.”
– More Decision Makers. Less Decisions
Seraph Science
For instance, Gartner reported that CMOs expect to increase marketing investments in 2021, but with the ongoing pandemic, “CFOs will turn their attention to profitability, and marketing [tops] the list of functions where finance will look to trim expenses even further.”
Although both hold high C-suite positions, the two have different priorities as the CMO is looking to advance the brand while the CFO is focused on minimizing costs. This difference leads to struggles in reaching a mutually agreeable purchasing decision.
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Reset Their Thinking
When diverse C-levels come together on a possible purchase, they usually settle on a decision that saves money and avoids risks.
While almost all the decision makers may find this outcome desirable, it may not necessarily be favorable or progressive for their business growth – and that is what you need to show them.
Let’s take marketing for example. During the coronavirus outbreak, only 7% of companies have seized the opportunity to invest more in marketing whereas 50% of brands have cut their marketing budget. However, budget cutting may not be the most strategic move.
According to Roland Vaile in his published work, The Use of Advertising During the Depression, businesses that increased their marketing and advertising spend during the recession saw faster revenues and recovery than their counterparts.
The same sentiment is also expressed in a recent post by Peter Field, a marketing and advertising professional, whereby “if the resources are available, the arguments in favor of brand building are stronger.”
Another case example is the cutting of cyber security budgets, which Chief Technology Officer of Barracuda, Fleming Shi, sees as a bad move as hackers are taking advantage of the pandemic to target vulnerable organizations.
Show decision makers that they are facing higher risks and greater consequences should they decide to save costs and not spend on solving important pain points.
Find Their Direction
Market experts believe that organizations should take this chance to invest in opportunities that were once hidden or were not in the forefront of their business plans, such as retraining and upskilling employees, integrating digital innovations, and developing e-commerce business models.
Some companies are also seeing business gaps and weaknesses due to COVID-19 implications, and are taking steps to rectify these concerns, including strengthening cyber security and updating data analytics.
As pointed out by Arthur D. Little’s article, the key is to make decision makers “look beyond the short-term crisis and start preparing for the new world” with focus on both obvious business trends and major areas of uncertainty.
No matter how much organizations want to save their budget, there comes a point when they must spend in order to continue their business growth or be on the road to recovery. Discovering their direction and going deeper into their needs help greatly in knowing the exact solution they require, and the risks they face if they don’t address their concerns.
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Identify The (Real) Stakeholders
According to Google’s B2B Path to Purchase Study, 64% of the C-suite have the final say in signing off a decision, and among them are risk-active, risk-neutral and risk-averse decision makers.
CEOs tend to be relatively risk-neutral, but senior managers and other C-level executives who are not comfortable taking risks in business decisions may need more convincing. Therefore, determining the right executive sponsor and key budget approver of the project is pivotal in preventing delays in deal closings and moving investment discussions further down the pipeline.
In cases where the executive sponsor and approver are individuals with aversion to risks, involving ‘influencers’ in the decision can help the risk-averse chief executives to better see the benefits and returns of an investment. A total of 81% of non-C-levels actually have a say or influence on a purchase, and are able to convince the key approver on the final decision.
“Clearly, if you’re marketing only to the highest level, you’re overlooking the people who need to notice you.”
– The Changing Face of B2B Marketing
Think With Google
To Push Or Not To Push
The answer is not to push, but to assist. If they have available resources, organizations should take this time to implement technologies and solutions that have been held back in their plans.
As solution providers, the goal is to make the decision makers see beyond their current predicament and risks, and focus instead on growth potentials to strengthen their market standing and get a lead on their competitors.
