Do You Know Your Buyer’s IQ?
The buyer’s knowledge state, what we call Buying IQ, is of vital concern to the salesperson in terms of adapting the sales approach, or pitch. It is also essential to accurately pre-qualifying, forecasting, sales opportunity and overall sales performance.
Measuring Your Buyer’s Buying IQ
The seller should start from the assumption that the buyer has done his homework is knowledgeable and informed. In this way the risk of underestimating the buyer is eliminated. The salesperson should however test that assumption thoroughly at all stages of the sale.
That means finding out if the buyer has;
- Done his or her homework and gathered the required information?
- Given the decision enough thought and consideration?
- Been sufficiently analytical and fact based in the approach?
- Engaged in sufficient internal dialog and discussion?
- Adopted an approach that is sufficiently nuanced, pragmatic and realistic?
- Got the balance right between oversimplifying or overcomplicating the situation?
- Made the correct underlying assumptions?
How knowledgeable and informed are your top 3 prospects?
The seller needs to know if the buyer has the information, data and analysis needed, but also whether he/she has the ability to use it to arrive at the best decision and then to communicate it in a credible manner to his/colleagues and superiors.
In short the seller needs to understand the level of Buying IQ.
IQ For Buying
As a salesperson you need to know just how smart your buyer really is. You need to know exactly what he, or she knows and does not know when it comes to the buying decision. That is the level of buying IQ.
Are you tailoring your approach to the level of knowledge of each of your key prospects?
Companies often employ an IQ test before hiring a new employee. But if it is important in matching people to their jobs then it is equally important in matching customers and prospects to your sales approach (and vice versa of course).
Of course when we talk of buyer intelligence it is not the mental aptitude or ability of the buyer that we are concerned with. It is not their ability with maths linguistics or other cognitive tasks and certainly not whether buyer belongs in Mensa, or not. Rather it is the buyers aptitude with respect to the buying decision that matters for the salesperson and his or her strategy for winning the sale.
The 5 Elements Of Buying IQ
There are 5 levels of buyer smarts, or buying IQ. The following are the headings under which the level of buying intelligence can be measured:
1. Strategy, or ‘Why Buy IQ?’ – Is the reason for buying clear and compelling? For example:
- Is the business need, rationale or imperative clear?
- How clear are they on the strategic rationale and implications?
- How does this fit with existing, past and future decisions, strategies and plans (in this as well as in other areas)?
- What is the impact of key business metrics and drivers?
- Are the longer term implications being considered and tactical and strategic considerations being balanced?
2. Solution, or ‘What To Buy?’ IQ – How clearly has the solution been defined and solution alternatives explored? For example:
- How expertly have requirements been captured?
- Have solution alternatives been carefully examined?
- How carefully has the optimum solution been defined?
- Has the right solution been defined?
- Is there an explicit recognition of trade-offs and conflicting requirements?
3. Supplier, or ‘Who To Buy From?’ IQ – Is there an understanding of the differences between suppliers, as well as the characteristics of the ideal supplier? Including:
- Has a supply market analysis been completed?
- Have supplier groupings been identified?
- Is the right criterion being used to evaluate suppliers?
- Is there an awareness of suppliers in the market?
- Has supplier risk been considered?
- Have supplier cost structures been examined/modelled?
4. Success, or Results IQ – Does the buyer have a clear understanding of the key success factors? For example:
- Will the buyer be able to project manage the practicalities of implementation?
- What are the requirements in terms of, training and support?
- Have the people, process and system implications been considered?
- How will success be measured and the benefits realized?
- What are the risks and how they are to be managed?
- Have compliance requirements been considered?
- What are the goals re adoption, compliance, or buy-in?
5. Procurement, or ‘How To Buy?’ IQ – Understanding the buying process and how to get the purchase approved, including:
- What are the steps to be followed?
- What are the paperwork and documentation requirements?
- What consultation is required?
- What are the approval procedures?
- What is the role of procurement?
What aspect of buying IQ presents the greatest challenge for your key prospects?
The Buying Curriculum
Here is another way to think of buying IQ: Imagine there was an exam for buying your solution and a buying curriculum, with 5 modules, one for each of the above aspects of buying IQ.
- Would it be a certificate, diploma, degree or masters level in terms of knowledge or skill required?
- How would your prospects score: who would pass and who would get honours?
When it comes to buying some are at the top of the class and others at the bottom. All that matters to the salesperson are his/her sales performance/success.
Why Buying IQ Matters To Sellers
What the buyer knows and does not know matters because it determines so many aspects of the sale. For example it is a major determinant of:
- How quickly the buyer is likely to make a decision?
- Just how sophisticated a solution the buyer needs at this time?
- If the buyer is able to grasp your message (including the key concepts, abbreviations and buzz words) and the level of detail appropriate.
- The buyer’s ability to discern and appreciate your competitive advantages and if he/she is ready for your solution.
- Overall receptiveness to new ideas and innovativeness – for example whether the buyer is an early adopter or laggard.
Do you use the level of buying IQ in pre-qualifying sales opportunities?
Buying IQ is a valid criterion for segmenting customers and pre-qualification prospects because it also determines:
- The investment of time required in educating the customer.
- The amount of ‘free consulting’ required during the sales process.
- The level of uncertainty and risk around an opportunity.
- The barriers and objections that the seller is likely to face.
- The level of post purchase support, hand-holding and training likely to be required.
All these factors make the level of buying IQ an important consideration in setting the appropriate sales approach for any particular opportunity.
The Questions To Ask
The best way is find ascertain the level of buying IQ is by asking. But be warned, like the rest of us, buyers may be slow to admit what they do not know. Some questions for the salesperson, include:
- Does the buyer feel that the decision is complex, or straightforward one?
- How confident does the buyer feel in making the decision?
- Does the buyer feel he/she has all the information required?
- Are there any information gaps?
- Does he/she feel that the information is reliable?
- What key sources of information are being used?
- Has the buyer, or his/her colleagues, got previous experience of such a decision?
- Are they networked with other companies (such as within a group or companies, or industry body) with expertise, or experience in this area?
- Is external expertise (e.g. analysts, or consultants) being employed in helping to make the decision?
- Has procurement been consulted?
- Does the decision have any implications for other parts of the business?
- What are the views of senior management?
- Are there any implications for the board?
What questions do you ask to gauge the level of buying IQ?
The seller must also know the buyer’s background and those of all the members of the buying team (LinkedIn, for example, should tell a lot about their past experience, qualifications, etc.).
Testing The Buyer’s Knowledge Level
Beware buyers may, or may not know the limits of their knowledge. For this reason it is important to discretely test the buyers level of knowledge. Just as a buyer examines what the seller knows the seller has to do exactly the same for the buyer.
An effective way is to share information and gauge reaction, but the information has to be credible, as well as relevant.
No offence to your marketing department but it is the opposite to what it generally produces. For today’s more sophisticated buyers insights and useful information (not marketing blurb) are the basis for seller influence and persuasion.
Testing Buyer Receptivity To New Information
The buyer may need to learn something new, but even if he, or she wants to, are you the best person to teach them?
How receptive is the buyer to new information?
The salesperson must establish how open and receptive the buyer is to new information, ideas, or debate? If there is resistance to new information and the buyer is close-minded, then there may be little the seller can do at this time to influence or educate the buyer.
Much of the sales literature talks about educating the buyer. But there are two problems:
- First, the teacher-student analogy is not helpful – selling to today’s confident buyer is not like teaching kids in school! An approach that combines learning, exploration and innovation requires coaching and mentoring, not teaching.
- Second, even if teaching was the right approach, the salesperson is typically not the right person to be doing it. That is unless the salesperson is sufficiently knowledgeable and sufficiently trustworthy.
Are you educating or coaching your prospects?
From the salesperson’s point of view the first thing to consider is: Is the buyer resting the information, or how it is presented? Here are a number of questions to probe this issue further:
- Is the information perceived as relevant?
- Is it from a credible source?
- Is it accessible and in the buyer’s language?
- Is it within the buyers frame of reference (e.g. suited to his background, or industry)?
- Is the information from perceived neutral source?
- Is the information non-threatening?
- Is the information presented in a take it or leave it manner (rather than appearing to be imposed)?
- Does the information jar with existing attitudes or beliefs?
Implications For Sellers
- Test your buyer’s level of buying IQ and tailor your sales approach accordingly.
- Pin-point and address any gaps in the buyer’s knowledge or preparation that could cost you the sale.
- Find ways to make new information more easily digested by the buyer.
- Focus on coaching not just on educating the buyer.