Beyond the B2B Buying Funnel: Exciting New Research about How Companies Make Complex Purchases
There are entire industries devoted to researching consumer buying behavior, but until now there has been relatively little research into B2B buying behaviors. Marketo recently worked with Enquiro Research (as well as Google, Business.com, Covario, and Demandbase) to perform new qualitative and quantitative research into the (often irrational) ways that businesses make complex purchases.
The initial findings of the research are a must-see for anyone involved in marketing or selling to other businesses. Some of the highlights and my thoughts are below. Also, I highly recommend you watch the on-demand archive if the sneak preview webinar, Beyond The B2B Buying Funnel. Finally, you can sign up for the upcoming webinar (Tuesday April 28 at 11:00am Pacific) Mapping the BuyerSphere to learn even more.
The Myth of Rationality in B2B Buying
Most marketers accept that consumers are not entirely rational in their purchasing behavior, yet many of us still cling to the idea that business buying is completely rational. This couldn’t be further from the truth.
As I wrote in one of my most popular posts, Why Branding Matters in B2B Marketing, B2B buyers use heuristics in their decision making. Heuristics guide which options and information get considered and which get rejected, and they help us simplify complex decisions to their relevant core. That can be a good thing if you find yourself in Africa threatened by a lion — and it can be a good thing when the complexity of a B2B purchase would be otherwise overwhelming. As Enquiro writes, “All this is good, in fact, essential. It’s just not rational.” Enquiro goes on to point out that the B2B world has the added complexity of not just one irrational decision maker, but many — making understanding the buying process even harder.
It’s All About Risk
Emotions impact how decisions are framed and are heavily involved in the creation of heuristics. Emotions also impact decision making because we take the anticipation of emotions into our decision making. In other words, we balance the pleasure of the prospective possession with the pain of acquiring it. In consumer marketing, marketers can capitalize on the anticipation of positive emotion by appealing to aspirational feelings such as desire, but in B2B marketing, there is an asymmetry between the upside and downside of B2B purchases: the buyer does not experience the full benefit of the solution directly and may or not be rewarded for making a good purchase, but a bad purchase can destroy the buyer’s reputation and damage job security.
The Enquiro research shows that B2B buying decisions are usually driven by one emotion: fear. As a result, B2B buying is all about minimizing fear by minimizing risk. There is organizational risk, which can often be dealt with rationally, and personal risk, which is usually unstated and hidden from the rational process. Yet personal risk is a huge factor in B2B buying. For example, say that there is a board meeting where a potential purchase is discussed; if a board member mentions anything negative about a potential vendor, the personal risk of making that decision goes way up, and alternately, if he or she mentions something positive about a vendor not under consideration, that can “pre-wire” that vendor for success.
Enquiro presents four strategies for managing risk:
- Approved vendor list. We’re more comfortable with companies we know. If someone has pre-approved a vendor, the risk goes way down — even if it’s not the best solution.
- Word of mouth (co-workers and friends). According to MarketingSherpa, user communities are the #1 source of information for researching B2B purchases. A referral or a recommendation from a trusted source goes a long way to minimizing risk. Of course, it’s easiest to build trust in person, but new social networks can help as well.
- Word of mouth (existing vendors). A good sales rep build significant credibility with their customers, and is therefore a trusted source for referrals.
- Credibility and position of vendors. We trust the wisdomof crowds, so if the ‘market’ says a vendor is good, then that reduces risk. This is the source of “nobody ever got fired for buying IBM”. But smaller companies can also establish thought leadership in their industry niche, creating trust in their brand that way.
The net-net of Enquiro’s research: As marketers, we like the traditional model of a simple, linear buying funnel since it’s easy to understand — but it doesn’t reflect the irrationality of actual buyer behavior, especially related to how we deal with risk. Buyers may very well still go through the phases of Need, Awareness, Consideration, and Purchase — but they don’t necessarily do it in a logical, rational, or linear fashion.
So, what can you as a B2B marketing professional do about it? Register for the B2B expert series of webinars to find out!