Business-to-business (B2B) markets are different compared to consumer markets in two ways. First, B2B decision making process and units are more complex. While a consumer purchase decision is made by one or two individuals, B2B decisions are made by several employees, each specializing in a different field.
Second, B2B decision makers are accountable for their judgments and therefore have more complex needs compared to consumer buyers. Consumers have emotional and rational needs at a personal level, while B2B buyers have these two kinds of needs at both a company as well as personal level. This article aims to help marketers by advising them on the B2B decision making process, which decision makers to target, and what needs to fulfill to sell successfully.
Your product offering is important to the consumer in two ways: the percentage of budget spent on the product, and the strategic importance level placed upon it.
Spend: If less than 5% of the annual budget is spent on the offer, the classification is ‘low’. If the spend is more than 5%, the classification is ‘high’.
Strategic importance: If the product is important to the consumer’s operations and not immediately replaceable by another, classify the offering as ‘high strategic importance’. If the product does not meet the above conditions, the classification is ‘low strategic importance’.
Low-spend, low strategic importance – for example: stationery
Your offering is of low importance to the customer and the purchasing decision is made usually by a single employee. The consumer may not pay attention to the product’s price, which can give you a high margin. You can differentiate your offering from the competition by making it easy to order the product, and by delivering it quickly. You can also bundle your offering with similar services and products. If you disappoint the customer, they will take their patronage elsewhere.
Low-spend, high strategic importance – for example: safety certification
Your offering is not that expensive, but is important for the customer’s business operations. This makes them extremely loyal and ultra-cautious. The customer’s decision making team will include several employees including one or more technical specialists. You need to partner these technical specialists and discuss the fine details of your product with them. You can differentiate your product from the competition by offering superior partnership, proactivity, reliability, knowledge, and expertise.
Low strategic importance, high-spend – for example: utilities in a service firm
Your offering is not critical to the client’s operations, but they are concerned with its price. The customer will bargain to reduce the expenses involved. The decision-making team will include several employees, including a purchasing specialist and one from the C-suite. The customer will focus more on the cost rather than the offering’s value. You can differentiate by making it easy for the consumer to make a deal, simplifying the purchase procedure, and performing good administration.
High strategic importance, high spend – for example: plant equipment
Your product is both high value as well as important to the client’s operations. The client is likely to need customized requirements and considers you as a strategic partner who is critical to their business. The decision-making team consists of at least five employees, including specialists and people from the C-suite. You can differentiate by offering better product, service, and relationship.
As mentioned earlier, B2B purchasing decisions involve both company as well as individual needs. Decision makers typically balance rational and emotional motivations, and individual and company needs while making make up their mind. Read on to learn effective tips on how to address these factors to sell successfully.
Rational motivations – company needs
These needs are clearly recognized by both the customer and supplier. The supplier needs to mandatorily meet these needs to be considered. These factors most influence offerings that are high spend/low strategic importance, where price is important.
Rational motivations – individual needs
Individual needs play an important part in B2B decisions. B2B buyers wish to perform their job effectively and avoid risks. They seek personal satisfaction in the workplace and try to avoid risks that affect their personal needs and performance.
Emotional motivations – individual needs
Employees take their strengths, weaknesses, and idiosyncrasies to their workplace. They will try to avoid risks that make them look bad before their boss and other employees. Employees are more likely to favor B2B suppliers who satisfy their emotional motivations.
This is a difficult factor for B2B marketers because each employee has his own emotional tendencies and personal needs. They should focus on making B2B buyers feel good and raise their image in the eyes of others.
Emotional motivations – company needs
Modern companies realize their brands are their biggest assets, and focus on enhancing brand image and value. They wish to deal with other companies that have similar brands and ethos. Thus, ‘brand fit’ has become a major company need in today’s business environment.
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