Drive Revenue Engine Performance | Forrester
B2B Digital Marketing
This Is The Dawning Of The Age Of The Buying Group
In the realm of B2B, purchasing decisions are predominantly made by collaborative groups rather than individual actors. This fundamental shift is reshaping B2B revenue strategies.
Understanding the dynamics of buying groups influences various aspects of attracting, engaging, qualifying, and converting prospects into customers.
To underscore the necessity of overhauling existing demand generation and management practices, Forrester presents its Buying Groups Manifesto.
This manifesto advocates for embracing a buying group perspective in B2B organizations by replacing leads with multi-contact opportunities in marketing and sales processes.
Furthermore, it outlines the adoption of the B2B Revenue Waterfall to facilitate the transition from lead-centric demand management to one aligned with the reality of opportunities and buying groups.
Forrester’s biennial B2B Buying Survey underscores this paradigm shift, revealing a consistent increase in the number of individuals involved in purchase decisions over time.
PART ONE: Transforming The Demand Process
Over the past fifteen years, the Forrester Demand Waterfall family has served as the benchmark for delineating crucial milestones in B2B demand management processes, enabling the measurement, monitoring, and management of demand performance.
Through meticulous observation of numerous B2B organizations leveraging Demand Waterfall, we have gained insights into their triumphs and hurdles.
Drawing upon these observations, we have refined the model to align with the evolving requirements and anticipate the trajectory of B2B revenue mechanisms.
The latest iteration of the Demand Waterfall, known as the B2B Revenue Waterfall, introduces a significant change driven by the recognition that contemporary B2B purchasing decisions typically involve not solitary individuals but rather cohesive buying groups. While existing best practices in B2B demand generation already advocate for engaging multiple buyer personas, the mechanisms for collecting and interpreting responses have historically overlooked or inadequately addressed instances where multiple members of a buying group are involved.
The B2B Revenue Waterfall fundamentally alters the demand process by:
- Prioritizing buying groups over traditional leads.
- Acknowledging multiple selling opportunities within each account.
- Monitoring opportunities from target accounts to finalized revenue.
- Incorporating the diverse array of prospect and customer opportunities inherent in B2B revenue objectives.
- Aligning marketing, revenue development, and sales efforts to effectively identify, engage, qualify, and secure opportunities.
In many instances, organizations receive numerous leads from the same account, each indicating interest in the same solution.
However, marketing automation platforms often fail to recognize the connections between these individuals, hindering the ability to discern instances where multiple buying group members are involved compared to cases with only one representative.
This lack of visibility significantly undermines the effectiveness of the entire demand management process, spanning marketing, revenue development, sales, and customer engagement.
Transitioning from a focus on leads to opportunities involving buying groups frequently leads to notable enhancements in performance across these domains.
PART TWO: Understanding Opportunities: If It Isn’t Leads, What Is It About?
Opportunities within Interconnected Buying Groups In the realm of B2B transactions, the conventional buyer is not an individual or a singular entity, but rather a collaborative buying group.
These groups, comprised of individuals tasked with addressing specific business needs within an organization, are linked to particular opportunities or deals progressing through the B2B Revenue Waterfall.
For instance, when an HR department within a growing company identifies the need for an upgraded human capital resource management (HCRM) system, a buying group forms to explore potential solutions.
This buying group typically includes subject matter experts and contributors from various departments such as HR, finance, and IT. As this buying group seeks solutions in the market, it presents a potential opportunity for HCRM solution providers, referred to as a demand unit.
Why Focus on Opportunity Instead of Account? Another crucial aspect emphasized in the B2B Revenue Waterfall is the acknowledgment that the buyer often transcends the confines of a single account.
For instance, the HCRM solution provider in our scenario may also offer travel and expense (T&E) solutions. In such cases, an account may potentially be interested in both HCRM and T&E solutions.
However, the buying groups within that account may comprise entirely different individuals, and the decision to purchase one solution may not influence the purchase of the other.
Hence, the account essentially represents two distinct selling opportunities rather than one, underscoring the necessity for demand management processes to accommodate such complexities.
Various Opportunity Categories From the standpoint of a B2B solution provider, an opportunity arises when three fundamental components are present within a prospective organization:
- Organizational and Functional Needs: Essential business requirements must exist within the pertinent function of the purchasing entity. In our illustration, the organization may necessitate a more robust and scalable solution to accommodate substantial growth and associated complexities.
- Buying Group: Formation of a buying group equipped with resources such as budget and personnel to address these business needs. In the aforementioned example, the requirement for an enhanced HCRM system initiates the formation of an opportunity, alongside a corresponding buying group tasked with evaluating HCRM solutions, supported by allocated budget and resources.
- Solution Suitability: The ultimate aspect of an opportunity lies in the alignment between the buying group’s needs and the proposed solution. For instance, if the requirements entail hiring thousands of employees globally, the solution must cater to this demand and adhere to global hiring regulations. HCRM solutions lacking support for multiple languages and diverse regulatory frameworks would not be suitable.
The B2B Revenue Waterfall was devised to accommodate these potential opportunities. However, certain opportunity types display distinct conversion rate patterns and velocities within the Waterfall.
One such opportunity type, acquisition, encompasses all opportunities within accounts that are not yet customers. Conversely, the other three types—retention, upsell, and cross-sell—represent opportunities within accounts that already have established customer relationships.
The Seven Essential Steps for B2B Buying Groups
Within the B2B Revenue Waterfall, each stage signifies a pivotal milestone, delineating a series of tasks that organizations must undertake to identify, attract, engage, and ultimately convert potential opportunities and their associated buying groups from prospects to finalized deals.
The Seven Essential Steps for Buying Groups (accessible to clients) delineate precise actions that organizations must undertake to initiate and advance opportunities through the Waterfall.
The efficacy of these steps is evaluated through conversion rates between stages, measuring the organization’s proficiency in executing each task.
Additionally, the flow of opportunities within the Waterfall is assessed based on both the volume of opportunities and the speed at which they progress from one stage to the next.
The Table of Contents of “Driving Revenue Growth” Guide:
- This Is The Dawning Of The Age Of The Buying Group
- PART ONE: Transforming The Demand Process
- PART TWO: Understanding Opportunities: If It Isn’t Leads, What Is It About?
- PART THREE: Adopting The B2B Revenue Waterfall
- PART FOUR: Managing Change
- PART FIVE: How We Can Help
Number of Pages:
- 19 pages
Pricing:
- Free
