Podcast: Are Personas Really the Best Way to Identify Your Buyers?

Podcast: Are Personas Really the Best Way to Identify Your Buyers?
What is it that makes a B2B buyer receptive to your marketing? Is it who they are? Is it the situation they’re in? Or have they reached the point where the status quo — the legacy software, the time-consuming manual process, the spreadsheets that connect data from various sources — is simply no longer tenable? In this episode of B2B Nation, we talk to Tim Riesterer, Chief Strategy Officer at sales training firm Corporate Visions, about the science behind decision making. According to Tim, when you measure the effectiveness tools like buyer personas against neuroscience and behavioral economics, you find personas might actually do more harm than good if you’re trying to identify your buyers. We also discuss another common mis-step: using the same messaging for new prospects and existing customers.  
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Podcast Guests

Tim Riesterer is Chief Strategy and Research Officer of marketing and sales consulting and training firm Corporate Visions. He is responsible for leading the strategic direction of the company in thought leadership, positioning, and product development. He also leads the company’s consulting team globally, including staff and certified contractors. Aimee Dunn is the Director of Sales Enablement at TechnologyAdvice. Prior to this role, she led the Customer Success team at QuinStreet B2B, which was acquired by TechnologyAdvice in early 2020.

Podcast Highlights

1:55 Tim Riesterer: We feel very strongly based on science… and the behavioral economics and the neuroscience of decision making, that personas are, for lack of a better phrase, a sort of made up segmentation, and that people are more moved or make decisions to change a behavior, more based on the situation they’re in than on their disposition. This is actually a piece of science called “fundamental attribution error,” and what it says is we tend to overestimate the power of their disposition on their behaviors and decisions, and really, it’s their situation that’s a bigger driver. The thing about personas is they are built more about the title, the role, the responsibility… if you will, their disposition. But I’ll give you a great example of their situation that we found changes their response and behavior. If you are a prospect and you’re getting cold calls, you have a totally different psychology and response to a marketing message than if you are an existing customer of that company who is communicating with you. It sounds obvious, but most companies build one-size-fits-all messaging for, let’s say, a CIO, thinking “Here’s my CIO persona…” And the reality is a CIO prospect at a company you’re trying to target and win has a completely different psychology than a CIO at a company where you’re trying to renew or upsell or upgrade them. And the reality is, the situation they’re in — prospect vs. customer — totally transcends their persona. So if you aim your message at a CIO persona, you’ll miss your mark, because the thing that will drive their behavior and their response to your message is whether they’re a prospect or a customer… The bottom line is, personas will give you generic messaging, and you will be messaging to personas that are interesting, but ultimately the scenario, the situation they’re in, the status quo is a bigger indicator of what they will respond to or won’t respond to. 6:51 Tim Riesterer: Well there’s evidence from Gartner that talks about how many buyers are in the buying committee, and what they will say in a book they wrote called The Challenger Customer, is that if you overly tailor your message to too many personas, you end up in a lower quality deal. Because you’ve kind of pushed them into their neutral corners, where they’re assessing what they need in it, instead of bringing them to the middle in the shared situation they’re all living with. And the job anymore, in a fragmented buying process, of a marketer and a salesperson is to pull together, to create consensus. And persona-based messages actually pull them apart and away from the shared objectives and situations. The problem is there’s literally no good data on personas driving better decisions. Maybe here and there, to get a few opens and a few clicks, but ultimately when it comes to making a decision and the team has to rally together, you’re actually doing a disservice if you perpetuate persona-based messaging from lead gen into the sales cycle. 11:59 Tim Riesterer: We spent a lot of time… helping organizations acquire new logos, go after prospects, and try to take market share. And that is a difficult task, so a lot of money, time, and effort is there because the idea is that maybe they’ll eventually pay off for you. Well, what’s interesting is, we’ve done a ton of research on what it takes to disrupt prospects’ status quo bias, and how to defeat an incumbent, and people started asking us, “Yeah, but what if you are the incumbent? What if you are the status quo? Should we use the same approach?” And this became especially important when more companies are getting into recurring revenue, subscriptions, contractual agreements… where the reality is they don’t make all of their money upfront on a transaction. It’s now spread out over time, and they over-service the first few years to try to keep the customer, so the time they start making money is on the renewal and after. So they started asking us questions. “What about at renewal time? What about at upsells or upgrades? What about on-premise-to-cloud migration conversations with existing customers?” So we did the research. We work with a couple of scientists, one at Stanford University in the States and one at Warwick outside of London, and we did simulation-based research on renewal settings, upsell setting, price increases… All of these existing customer settings, and we used the same sort of provocation/acquisition-type message with one group to try to convince them you should renew because there’s all this new stuff. And with another group we started talking more about reinforcing their bias, reminding them of the business impact they got, reminding them of the investment and effort that we all put in together, and demonstrating progress and momentum, and then talking about the new things and the renewal and the upsell. So think of it as acquisition messages lead with what’s new, interesting, and provocative, and we hypothesize that renewal and upsell messages lead with what’s been accomplished, the positive results, investment and effort, and make it look like, if you will, it’s more of an evolution vs. something surprising, different, and revolutionary. And what we discovered is, if you’re in a renewal or upsell situation, or trying to communicate a price increase to an existing customer, you will increase the likelihood of renewal and upsell and avoid churn by somewhere between 10 and 20 percent… if you use a deliberate reinforcement of status quo bias vs. the traditional acquisition method, which is more disruptive. In fact, the disruptive message increased the likelihood that they would not renew and it increased the likelihood they would seek other competitive alternatives . And what our scientists said was “Hey, if you use such a disruptive sort of changey-y message for your renewal time and upgrade sales, you basically tell your existing customer they’re going to have to change so much, it’s going to be change anyway, why not investigate other alternatives?” Why assume you’re the best alternative? So what we say is, your messaging with existing customers actually has to deliberately build a firewall or build a moat around your incumbent advantage, leverage your incumbent advantage, before you start talking about the other stuff, because it reminds everybody years later why they made the decision, what they got out of the investment, the effort and investment that was made, the partnership bonds, and the knowledge and the expertise, and the relationships you forged, and they are less and less likely to change or seek other alternatives because they start to think “I can put all that at risk.” This podcast originally aired on QuinStreet B2B Insights in January 2020. TechnologyAdvice acquired QuinStreet B2B in February 2020.  
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