Can B2B firms capitalise on ad hoc sales encounters?
Although over 80% of B2B customers are ad hoc, B2B firms face sales loss due to mistrust towards their sales representatives by these ad hoc buyers. They can overcome this mistrust by training their sales reps in relational selling, which focuses on building relationships with buyers, over functional selling, which focuses on highlighting product benefits. They can also reduce focus on sales efficiency (number and length of calls) so that sales reps can dedicate more time to service buyers even when utilising functional selling.
For many B2B-focused companies, a substantial portion of B2B sales comes from long-term customers with whom maintaining strong relationships is vital. But these sellers also get sales
from smaller customers. While at a transaction level, these may not be much, they all add up, and companies are loath to give up on this. These smaller or ad-hoc customers have no relationship or trust with the seller to bank upon. In fact, there is a significant possibility of mistrust towards the sales rep during such ad hoc encounters, which can harm the selling relationship.
For many B2B firms, more than 80% of B2B customers are ad hoc, though their contribution
to revenue is quite small. Moreover, the mistrust can begin at the level of the sales rep but grow to affect customer perception of the whole firm. Therefore, mistrust by ad hoc customers can be a major issue. A study looks into this problem to answer the question: How can B2B sales reps overcome customer mistrust during ad hoc sales?
The study found that the most effective way to address this problem is through relational
selling. Relational selling refers to the approach of building a personal relationship by being genuinely interested in the buyer’s business goals and showing sincere concern for their personal and business situation. Sales reps who practice relational selling highlight mutual benefits and interests, especially related to the buyer’s needs, to convince the buyer to make a deal.
Click here to find out what else can help B2B firms build strong customer relationships.
On the other hand, functional selling can make matters worse. Ad hoc or first-time
customers already fear opportunistic behaviour from unknown sales reps and can be suspicious of their intentions as it is a natural human tendency to do so. Functional selling, which focuses on product features, benefits, and advantages over competing products, only reinforces those negative feelings of buyers, leading to mistrust and loss of sales.
The study also discovered that time spent on a call is a critical factor in deciding how effective functional selling is. When a sales rep spends the day making more sales calls (high
sales efficiency, low cost per call), they cannot spend enough time with each buyer to develop trust or gauge buyers’ needs accurately. Only when they spend time on preparing, conducting the call, and post-call service are sales reps able to leverage functional selling. However, in such cases, they have low sales efficiency. Interestingly, sales efficiency does not affect relational selling as it yields a positive response regardless of time spent on the call.
Personal stress also impacts sales performance. Read here how it impacts B2B sales reps.
The study has important insights for B2B firms and their sales representatives. First, B2B firms
can recognise that buyer mistrust leads to loss of sales. Even though ad hoc customers provide a small portion of their revenues, they can suffer severe long-term consequences if they lose the trust of these buyers. Recognising this, they can modify their sales policies to shift from purely functional selling for ad hoc customers to relational selling for all buyers.
Second, B2B firms can also train their sales reps to recognise buyer mistrust and adjust their
selling behaviour accordingly. They should also train the sales reps to engage in more relational selling behaviours, especially when selling complex or expensive products. In such cases, buyers need to feel comfortable and reassured about support rather than technical information about the product and its benefits.
Finally, B2B firms can shift their focus from sales efficiency to flexible call management, giving sales reps the autonomy to decide how much time to dedicate to each call.
Combined with the right training, such freedom will allow sales reps to choose the right selling approach depending on the buyer, level of trust, stage of the relationship, or nature of the sales encounter. They can use relational selling if that is called for (e.g., in ad hoc encounters) or functional selling if that will bear fruit (e.g., in the case of long-term clients with specific business needs).
Analytical skills can also help salespeople here. Read this post to discover how.