Changing Buyer Behavior | A Conversation With Greg Coticchia | Tech Done Different Podcast With T...

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Welcome everybody to another episode of Tech Done Different. I'm your host Ted Harrington, and with us here today is our special guest Greg Coticchia. He is the CEO of Sophion. Greg, thanks for coming to the show.

Hey, it's great to be here, Ted. Thanks for the time.

I'm super excited to have you on the show because you are really experienced in a lot of different spaces. You have a security background, so we won't probably talk about that too much, but we were nerding out on that before. But you have this, this really interesting viewpoint that I wanted to ask you about, and then I think our listeners would be really interested in about, and that's how buyer behavior is changing in the business-to-business marketplace. So let's, let's start there. So how is it changing? Maybe the simplest way to answer that is what, what has it been and what is it becoming?

Yeah, it's a great question and something that I find absolutely fascinating. I've spent almost my entire career in business-to-business enterprise technology and software and services. And the last 10 or 15 years, there has been a dramatic change in terms of expectations of B2B buyers. And there's so many trends that, and pressures, I think demographic pressures and other pressures that have made these changes. I know that other people have called it the consumerization of B2B, but fundamentally what is happening? Well, one is we are seeing less reliance on information coming from our traditional sales channel, direct salespeople. When I first went into B2B, you, respond to a physical piece of mail or a phone call, and you'd get a salesperson and a pre-salesperson showing up at your office, and they'd do a demonstration of their software. They'd reply to an RFP, whatever it was. Those days are pretty much gone or fading very fast, except for the very largest of enterprise B2B technologies. And how do people want to experience a B2B selling environment today? Just like you buy on Amazon, just like you look for a new product anywhere. They have a problem, they want it solved. And so you do your Google search, you respond to your Google AdWords placement, whatever it is while you're searching, and you find a landing page and you get there and you say, well, okay, that looks like an interesting product or service. Let me try it out. I want to experience it, right? I want to feel that and see what it is. Oh, it was good. It was bad. Well, let's say it was good. Oh, I'm going to share it with my buddy Ted. Hey, Ted, I'm on Slack. Ted, did you see this? It's pretty cool. It's helped me solve this problem. I know we talked about this problem. Maybe it'll help you too. Next thing you know, there's 20, 40, 100 instances in the company. And then, only then, you get this logged-in sales call that says, hey, you guys are using 100 copies of this thing to solve these problems. Do you want to buy this for the whole company? Because maybe you can use it. So, that's the change that's happening, that has been happening and is just happening even faster and faster where it's the individual doer is making decisions from a bottom-up versus a top-down decision-making.

What I'm hearing you describe is certainly the way that I buy things. And I think probably everyone listening buys things, whether it's for themselves or their company. But you're touching an interesting point. And the point is that the way things are sold is different. I mean, we started— the question was how are buyer behaviors changing, but also how are selling behaviors changing? And is the shift, in your opinion, is the shift in buying behaviors also requiring a shift in selling behaviors? Because if you scroll through LinkedIn, you're gonna see nothing but— well, maybe not that— you're gonna see primarily people complaining about salespeople. People saying like, oh, here's a really bad sales attempt. But then you realize, okay, yeah, there's a lot of bad salespeople out there, but that is actually still how a lot of sales is done. A salesperson calls someone and says, hey, do you have this problem? If so, do you want to hear about a potential solution? Like, that's how it works. Do you think that is fundamentally changing or is it going away or is it just that part of the business will always be here?

I think there's a part of that that will always be here. But I think prior to you recognizing that idea of pain versus latent pain, right, people are reacting much more on the scale of, I know I have this issue and I'm going to proactively go out and find a solution for it. Right. I think that part is more and more automated. You know, it's probably been 10 years now that the corporate executive board said that 59% of the sales cycle is over before anyone even reaches out to talk to a salesperson. So the majority of the sales cycle is done because you've collected just, you know, just like you do in your consumer life. You've collected all the information, you know who has products out there, you've read all the reports, you've read all the reviews, and now you're down to 2 or 3 products and you just want to know a little bit more about the vendor or whatever it is, and you can make a decision. That's it. I think where it's a little trickier is on newer products, products that are in that, let's put it, educational phase where you, you have a latent pain that you may not be aware of, a problem that is not clear to you that should be solved, that there is solution for. So you're not actively seeking something as a buyer. But that the buyer has a novel solution that they think they can solve. That is still going to take a salesperson because there's an educational phase there, a set of questions that need to be asked to reveal to you that you actually even have a problem or a pain that needs to be solved. So I think that one is still around. I don't know, it may be solved later on by something that doesn't require— but today's world still requires a salesperson.

Sure. I hear you on the changes in buying behavior, right? People— this has probably been true for all of time, that people want to be informed buyers. They want to understand what their options are. They want to understand what it is they might be buying. The difference between now and maybe 50 years ago is just the access to that information, whereas before you had to speak to a salesperson to get the information, and now you can get it on the internet, pretty readily available. But the scenario you mentioned of someone talking to a friend like, hey, hey, Greg, I'm trying this thing out, you mentioned a problem, that probably hasn't changed, right? Like we still— the most trusted source is other people, correct?

Word of mouth is still the best basis. And certainly we're very tribal and certainly in our careers and our community. I think though, you know, if you went back 20 years ago, where did you exchange most of that information? Well, probably at a trade show or conference, right? You don't do that anymore. You just, you recognize it and you see it and you're, you know, text messaging somebody about it and saying, You know, we talked about it yesterday. So it's happening at a faster clip and it's easier to exchange that information as well. So it happens, I think the collision of information happens faster. We don't need to wait for our, you know, our annual trade show get-together to discuss these issues. It just, it happens as a course of business, right? So very different than how it used to be.

So let's, approach this topic from two sides. So one is we're speaking to people buying things, and then two is we're speaking to people selling or marketing things. So for the people buying things, as we've observed, this behavior is changing. What's the advice to people out there? So someone's listening right now and they're contemplating buying a product or service. What is— what should they do with this information that we now see that behaviors are changing?

Yeah, I think the important thing is the buyer's in control and the individual buyer, individual doer persona is definitely in control. They're in control of the information, they're in control of the pace and buying cycle. Where they're not in control, where it's still very difficult, is in medium to large size organizations, corporations, enterprises, institutions, where the capability, the technology, the solution needs to be applied across the entire company. And there's benefits from that. There is benefits from having something that is not just totally bottom-up. There's benefits in terms of reporting, visibility, transparency, all those things. And so there does need to be a bit of a top-down structure to understand how do we organize this for the benefit of the company, right? So that it's not just the Wild West and we have 50 different products and 20 different units and it's a mess. We can't organize it. We've got security issues. We have cost issues. We have all kinds of things. So there is a balance that needs to be achieved. So that's the part where the buyer and the individual doer is really not in control and needs to be done. From the seller's perspective, they need to understand both of those balances. So they need to be able to see, first of all, that the individual doer has access to so many instances of their offering, right? And they need to say, hey, they're at a tipping point now where there's a benefit from them owning something that goes across their institution, across their corporation, across their geographies, and we can help solve that. Solve that uniquely because that should, it should, Ted, unlock more value for the product and the company. Now, if it doesn't, then that's a different kind of problem, but it should. And I think those are the seller and buyer issues that still are still a little bit, I think, challenging for companies today.

So let's talk about how a company might transform. So as I understand it, what you guys are doing at your company is you're trying to go through this transformation, right? How do you make your company discoverable, I guess, when someone's searching for your problem that you solve. How have you been thinking about that and what's worked and what hasn't worked?

It starts really at the offering level and the value proposition to make sure we have product-market fit. You know, a product that we've traditionally sold that is sold to a, you know, a C-level or VP-level person, chances of them looking for something and buying that online, they're still using some of those older traditional methods of buying. You know, let's get a committee, let's get an RFP, let's, you know, let's issue something. Those are still— they still exist. Now you look at that other end of the world in terms of transition, you have to start promoting your product and your product set through all the techniques we're all well aware of here: search engine optimization, AdWords, social media, etc., to start driving that inbound marketing activity to your website, to your landing pages, to your product offerings, right? Most importantly though, those products have to be what I call transactional. In other words, if it's something that doesn't have an immediacy in terms of solving your problem, if it takes a lot of friction, a lot of work, you have to add a lot of data, you have to custom, you know, configure it yourself, and it's going to take me 2 weeks to get this thing to do something for me, you're going to tune out. You are never going to get there. No value is ever going to be unlocked. So the product itself, in order to do, has to do something almost immediate to solve part of, if not all of, some part of the problem that that individual doer has. And that's a change because a lot of these big enterprise products really were almost empty, right? They would automate a process, but my goodness, to get it to automate that process, you had to put a lot of data, a lot of education, a lot of implementation. It could take 6 months, a year to show value. Well, these individual products, they better show value within an hour, within a day. And so there's some immediacy in these products that is very it's almost radically different.

Given that some of those enterprise-class products inherently are going to require that input of data customization for, for it all to work, just because they're so customized and they're solving a unique, you know, million-dollar problem a lot of the times, and it's not quite as transactional, what does this mean for a product like that? Does this mean that those types of products are just never We're going to stop using products like that, or will they have to adapt, like have an instant value right out the gate type of module and then everything else comes later? What does this mean for that?

That's a great question. I don't think anybody has the exact answer, and I'd be lying to you, Ted, if I told you I had the exact answer. But if I had to guess, though, what I would go with is adapt. There's no doubt that companies today that are sales-led, selling to enterprises, want to be product-led, then they want to add product-led solutions. At the same time, I will tell you, and I've talked to dozens of them, that product-led companies want to be sales-led because they realize that they need to unlock that value in larger deals for their companies to grow as well. So we're going to end up, if I had to predict, and this is a bit of a prediction, I think we're going to end up with products that are in this virtuous cycle. I call it, you know, not just the flywheel of building product-led products, but product-led that enhances sales-led, sales-led that enhances product-led. But to your point, Ted, I think it's a good one. The definition of that enterprise product, I think it has to change, right? I don't think it'll ever show out-of-the-box immediate value just like product-led, but it has to show value integrating to those product-led products, and it's going to have to show value uniquely at that level.

For the benefit of people who might not be familiar with this distinction, can you clarify the difference between product-led and sales-led?

Yeah, that's a great question. I apologize for not using that definition. So sales-led is kind of those traditional products that still are going to require someone to— you may be able to see a video demonstration, maybe someone's going to show up as a pre-salesperson, but they are sold primarily from a salesperson that is going through a sales cycle with you to show their product, educate you on their product, you know, do the standard pricing proposal, answer your, you know, provide you a statement of work, etc. So things that we were traditionally aware of. That product-led approach is much more what we talked about earlier, where you're, you're finding the product through your search or experiencing the product directly yourself. Maybe even swipe your credit card and you're paying $39 a month and you're using it very happily and, you know, working on it. You may not even know somebody else in your company is also using the same product, but that's the experience in that. So it is very much entirely self-service. You have served yourself the benefit of that technology.

Got it. Yep, that's a really good way you just distinguish those two. And some product lines might even have both, right? Might have an enterprise-class solution that requires customization and a more SaaS-type solution that doesn't. You can just buy with a credit card, like you said.

That is correct. And they provide benefits to different doers— the, the individual doer versus the executive doer— and they're providing different things for the problems they're trying to solve.

So buyer behavior is changing. It's moving more towards this informed buyer who maybe buys bottom-up rather than top-down, and it's shifting towards that. What do you think, based on what you've been experiencing, is the next 5 or 10 years of this look like? What should— as people are starting to think about their own 5-year plan right now, how should they be thinking about how this change will impact them?

Even if you're still in that traditional enterprise business, there's so much to be learned by these newer PLG product-led businesses. You know, I, I've been teaching B2B marketing at the University of Pittsburgh for close to 20 years. And one of my definitions of marketing that I put out there for my students is that marketing is all about reducing barriers to transactions. And at the heart of product-led is this idea of making it frictionless, reducing those barriers, making it frictionless in order for you to buy and experience a product. Right. And really, at the end of the day, whether you're top-down, bottom-up, sideways, whatever, that's at the core of this. The buyer wants to not work really hard to buy to buy a product that solves a problem they have. So they can learn from each other. That's, that's at the core of this. Make it easy. The easier you make the product to buy, the more you're going to sell. So look at the food chain, whether it's from, as you said, the buyer side to the seller or the seller side. Look at those journeys and say to yourself, where are the areas of friction? Where are the areas of barriers? And how do I start cutting those barriers out to make it easier to sell? And easier to consume.

Do you think one of those barriers are restrictions that inherently need to be applied to any transaction? Right. So to be more precise about what I'm asking, so when someone is selling an enterprise class solution, right, they have to put parameters on there, right? Like this includes this much custom development or this much access to these types of people and it has to be specified otherwise. The buyer's probably going to abuse it, right? Is that a point of friction? Like, does that need to go into the sales process or—

Yeah, and I think that there's ways to make that something that is not a barrier for the customer, right? So we're going to have to start thinking of new ways of pricing and consuming those hours of custom development or those hours of support or whatever that the customer can say, hey, okay, I can consume this a different way, a better way, right? And so we have to look at those problems both on the buyer and seller side and say what used to be maybe isn't good enough anymore. And it takes too long for the, you know, it's too much risk for the customer side or it's too much exposure for the seller side. So is there another way to solve this problem for them? I mean, is there a way to automate it? Is there a way to make that risk reduced and package it differently? I think that's really where the innovation is going to come from in the future years here in terms of how enterprise products are sold. We're not there yet. We still have a lot of old habits and ways that we're used to buying and selling things that we have not quite solved. But this whole product-led way of selling is going to force those conversations and force us to make better decisions all up and down the whole B2B tech stack.

I love it. Greg, you've provided so much value, so many great insights. As our time comes to a close here, is there any parting wisdom you want to leave our audience with?

Yeah, always be learning. You know, this is— we're at the very early stages of this tremendous transition of both sales-led and product-led in the next generation. We've, we've just lived through the whole cloud SaaS transition from a technology, but we've not lived through the business model impacts all the way. And these business model impacts are going to be just as impactful as the technology stack ones were.

Got it. Greg, thank you for coming on the show. This has been great.

I've really enjoyed it, Ted. Thanks for having me, and I hope your listeners got some value out of it.

Absolutely. For everyone listening, if you want to learn more about what Greg's up to or the show itself, just head to tedharrington.com/podcast, and we'll catch you next time.

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