Overcome Sales Obstacles and Better Manage Leads

February 10, 2020
Contributed by Gartner Digital Markets Analysts

Many factors determine whether a lead converts into a sale. Explore these tips to shift your strategy to overcome common pitfalls.

Many obstacles may keep potential buyers from making purchases. Finding those obstacles and addressing them sounds simple enough, but it becomes increasingly complex as not all markets face the same hurdles to making that purchasing decision.

What we mean when we talk about “sales obstacles”

In 2019, Gartner Digital Markets surveyed small to midsize businesses (SMBs) to better understand their software buying behavior. In this article, we'll explore ways you can more effectively address SMBs’ concerns, using the United States as an example.

Figure 1: The list of most referenced barriers to investing in any software across the U.S.

 

We can separate these obstacles into three primary categories:

  • Displeasure with their financial situation
  • Displeasure within the return on their investment
  • Displeasure with the available options for software solutions

Not only do these primary categories fit thematically, but they also fit together in terms of top-level steps you can take to address each one. Within those larger steps, I’ll break down each type of hurdle and focus on location-specific means of countering each obstacle.

By engaging with both the top-level and more granular responses to your leads’ hurdles, you’ll develop a more thorough marketing campaign that can simplify your sales process.

Here’s how to get started.
 

Address fiscal concerns with free demos and freemium models

Offering a free demonstration can give buyers a stronger understanding of what your product can do and they may even grow reliant on it. You can also utilize a freemium model although, depending on your budget, strategy and ability to lose that much potential revenue, this might not be the best option.

How willing SMBs may be to pay for additional features to a freemium product depends as much on the organization’s business needs as on its budget. For example, in a 2019 Gartner survey on software buying behavior, SMBs were more likely to go over budget for features considered business-critical, such as service and support for top-tier customers, as opposed to features considered extra, such as end-user training. A close understanding of your customers and their most critical business concerns can help guide sales conversations toward the features that matter most.

Now let’s drill down further into financial displeasure barriers.
 

Project and solution costs exceed budget

Focus your marketing toward experts within each company, as well as their IT teams. Forty-one percent of businesses have a formal team to make software purchases, and only 28% of buyers exceeded their budget for business-critical features in 2019. The key take-aways from this are that it’s important to know who the decision makers are when it comes to purchasing and making your pricing clear to them to help companies establish their expectations.
 

Concerns over return on investment (ROI)

Concerns over the return on investment are the second most important factor in a U.S. SMB’s vendor selection, with 39% of organizations citing it as a key barrier to purchasing software. Collect data on your past successes and proven positive ROI for similarly sized SMBs to prove your value.

This can be doubly helpful, as having a proven track record is the other third most important factor in vendor selection.
 

Lack of budget (e.g., assigned to other projects, budget cuts)

Forty-four percent of U.S. businesses disqualify software that isn’t in line with expected prices.

If you have the resources to provide a freemium model, do it. Otherwise, with a free demonstration and flexible rates and payment plans, you can take advantage of U.S. SMBs’ comparative budgetary malleability.
 

Business or technical risks deemed too high

Train your sales team on their product knowledge, so they can speak to both business and technical concerns with equal confidence. Having a knowledgeable sales team is seen as crucial to vendor selection by 35% of U.S. SMBs.
 

Cultivate positive reviews and utilize negative ones to stand out from competition-based hurdles

Reviews can be your best friend in terms of marketing, business strategy and visibility. They can help you stand out and highlight different components of your business, whether they’re hosted on your own site, in a directory or on a reviews-oriented site.

If you use account-based marketing (ABM), you can even use targeted reviews to demonstrate your utility to other accounts that fit the same persona.

When we break those obstacles down, some potential solutions emerge.
 

Lack of satisfaction with potential software solutions or providers

Product features and functionalities are one of the most important components of a software offering. Listen to what their concerns and needs are, and develop products based around those as both a business strategy and lead nurturing.

This is a good way for you to work on lead nurturing and an opportunity to offer a demo to show how many pain points your product currently addresses.
 

User reviews of the software

Reviews websites are the first source of information for 19% of U.S. SMBs, and almost 60% use reviews as a key resource during the research phase. Make sure you have a spread of reviews on an array of sites.

Use those reviews as nurturing opportunities by responding to all negative reviews, and keep both the reviews and your responses visible to showcase your trustworthiness.
 

Use lead nurturing to help companies navigate their internal obstacles

Internal barriers can be tough codes for you to crack, but there are certain things you can do to help your leads along their customer journey.

The nice thing is that a lot of these solutions apply to all three of the following internal barriers.
 

Disagreements between business units and IT, inability to get management approval to move forward and internal disagreements on how to proceed at the project team level

Among U.S. small businesses, software purchases are mostly handled by a formal team or business staff. This means that, as appealing as your software might be to the more tech-savvy members of a business, it doesn’t matter if their word isn’t final. Make sure that your advertising targets the more fiscally responsible elements of your product.
 

A broader look at what you’ve learned

No matter your industry, and no matter the buyer, you will always have hurdles to leap when it comes to converting leads into sales.

The important thing to do is research what those specific hurdles are and what your leads — or current customers with personas like your leads — respond to best.

Once you’ve established what they care about and what you can do to address those concerns, with the right strategy, you can clear those hurdles like limbo bars.
 

Learn how to better manage leads with our Lead Management Kit.

 

Resources

Gartner Top Technology Trends Survey

Results presented are based on a Gartner study to understand small business challenges and approach to technology investments. The primary research was conducted online among 715 respondents in 2018 and 539 respondents in 2019.  

Companies were screened for company size in terms of:
Number of employees: 2-249 employees 
Enterprisewide annual revenue: Less than 100 million USD 

Respondents were required to be involved in purchasing technologies for the organization and hold a position of manager or& above in the company.

The study was developed collaboratively by Gartner analysts and the primary research team who follow digital markets.

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