The conventional wisdom is that B2B buying decisions are made by buying groups that must reach a consensus. New research says the conventional wisdom may be wrong.
A recent study sponsored by DiscoverOrg and conducted by Steve W. Martin provides several interesting insights regarding the attitudes and behaviors of business buyers, and argues that B2B buying groups don’t really operate the way we’ve come to believe.
Why Didn’t They Buy? was based on an in-depth survey of over 230 business professionals who evaluate the products and services their companies use. Survey respondents represented a wide range of industries and business functions. Although this study was designed primarily with sales reps in mind, the findings will be valuable for B2B marketers. First, the noncontroversial stuff.
B2B marketing and sales professionals have long recognized that many business buyers are risk averse. They have a strong fear of taking risks, which means that the real unstated goal of the B2B buying process is to reduce fear by mitigating risks. Gord Hotchkiss captured the essence of this point several years ago when he wrote, “B2B buying decisions are usually driven by one emotion – fear. Specifically, B2B buying is all about minimizing fear by eliminating risk.” (The BuyerSphere Project, 2009).
Mr. Martin’s research confirms that most B2B buyers are risk averse, but it also shows that the degree of risk aversion varies across industries and business functions. To paraphrase George Orwell, all B2B buyers are risk averse, but some are more risk averse than others.
The study found that buyers in the fashion, media, and real estate industries have the highest tolerance for risk, while buyers in government, consulting, and healthcare are the most risk averse. In terms of business function, the study found that buyers in marketing and engineering have a higher tolerance for risk than buyers in accounting and IT.
Vendor Market Position
Being the recognized market leader provides significant advantages in most selling situations, but the DiscoverOrg study revealed that most business buyers aren’t blindly committed to the market leader. When survey participants were asked about choosing an expensive product they would use every day, 62% of the respondents said they would pass on the most prestigious, best-known brand with the most functionality and the highest cost, and instead choose a fairly well-known brand with 85% of the functionality and 80% of the cost of the top-of-the-line product.
But, the importance of market leadership varies significantly across industries. The following table shows the percentage of buyers in nine industries who would buy the best-known, top-of-the-line product with the highest functionality and cost:
The “Bully With the Juice”
Without a doubt, the most controversial finding in the DiscoverOrg study is that in most B2B buying groups, one member of the group largely controls the decision making process. Mr. Martin states this conclusion emphatically in the study report: “Of the hundreds of sales cycles I have analyzed, I’ve found that one member of the selection team is able to exert his or her will and determine the vendor selected.” Martin calls this person the “bully with the juice.”
Over 90% of the survey respondents said there is always or usually one member of the buying group who tries to influence the decision his or her way. And 89% of the respondents said this person is successful in getting his or her way “most of the time.”
These findings run counter to the widely-held view (supported by an impressive amount of research) that B2B buying decisions are primarily made by consensus. For a good discussion of the conventional view, take a look at “Making the Consensus Sale” by Karl Schmidt, Brent Adamson, and Anna Bird in the Harvard Business Review.
Frankly, it’s difficult to reconcile Mr. Martin’s findings with the more conventional view. In my work with B2B companies over the past 30 years, I’ve acted as a “facilitator” for dozens of project teams. I can say without reservation that it’s not uncommon for a team member with a strong personality and strong opinions to dominate the team’s work, even when that’s not his or her intention. So I can see how a buying group could be “led” by a dominant personality.
On balance, however, my experience is that buying decisions are made by consensus, especially when the purchase under consideration impacts multiple business functions, and when the members of the buying group are of about the same rank in the corporate hierarchy.