Does Buying Activity = Revenue?

Sales Training Article – Does Buying Activity Equal Revenue

I’ve always been skeptical in blogs about statistics indicating as much as 80% of buying activities are completed prior to sellers being involved in buying cycles. While I could accept that 70-80% of product evaluations may be completed, there are several other activities that need to be done before companies are ready to buy. Some examples of those activities would include defining desired business outcomes of executive buyers, building enterprise-views of business cases that compare value vs. cost, allocating funds for offerings, evaluating vendor support, etc.

My gut feeling has been during the steady, but tepid recovery of the U.S. economy over the last several years most vendors were not experiencing revenue increases anywhere near those seen during the 90’s. It caused me to ask the question: If there’s so much buying activity going on, why has top line revenue growth been so elusive?

An April 5th Time Magazine article by Rana Foroohar cites a report from the Office of Financial Research about the tripling of U.S. stocks over the last six years. It concluded that companies achieved these gains through higher margins and “not because the economy is booming and they are selling more stuff, but because they have cut costs, kept salaries low and not invested in new factories or research and development.” Paraphrasing: Despite strong business results, companies are struggling to achieve revenue growth.

My hope is that vendors will rethink the perceived treasure trove of inbound leads. In my mind they remind me of “bingo cards” from tradeshows of decades past that few if any executives attended. There is a revenue growth problem and I firmly believe part of the issue is vendor reluctance to abandon traditional selling techniques that conflict with how buyers want to buy.

Sales shouldn’t shoulder all the blame. The traditional silos of Product Development, Product Marketing and Marketing are letting Sales down when customer and market demands are after-thoughts when creating new offerings. These silos must find a way to communicate, collaborate and center development on customer/buyer needs. The effectiveness of traditional “push” strategies is in a well-deserved decline.

Historically when the economy tanks, belt tightening goes a long way toward weathering the storm. The outlook will be dim for companies that can’t find ways to achieve revenue growth before the next inevitable downturn occurs.

Frank Visgatis

As co-founder, President & Chief Operating Officer of CustomerCentric Systems®, LLC and co-author of the CustomerCentric Selling® sales methodology, Frank Visgatis drives the overall direction and strategy for CustomerCentric Systems®, LLC, leveraging 20 years of leadership experience. Visgatis knows how to conceptualize and execute a new business strategy into a winning company. He has done it numerous times - from co-founding a thriving commercial and residential real estate holding company to transforming a private consulting practice into one of the most successful sales training providers in the country. His ability to identify trends and changes in the sales ecosystem has helped improve the dynamic of interaction between sellers and buyers through the development of CustomerCentric Selling® and Sales Ready Messaging®. Visgatis' vision has propelled CustomerCentric Systems®, LLC as one of the industry's top providers of sales process consulting, sales training and Sales Ready Messaging®.

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