While the steps in B2B buying ‘process’ have remained relatively unchanged in the past two decades; the motivations, sophistication and behaviour of buyers has certainly evolved.
In 2020 the buying process ‘norm’ sees sellers contending with more influential procurement functions, multiple approval layers, buying ‘boards’, an increase in formal requests for tender, and probably the most significant – the rise in B2B digital e-commerce.
Enter the COVID19 pandemic. Nothing is going to have more seismic impact on B2B sellers in the next 12 – 24 months. Combined with the onset of the additional B2B buying steps and omni-channel approach preferred by buyers, sales organisations need to change and change quickly.
Since our last blog examining the impact of the pandemic, further conversations with our clients as well as senior leadership and purchasing executives, paint a picture of rapidly shifting B2B buyer motivations, methods and steps.
In Part 1 of this blog series we’ll examine the different buying motivations prevalent in B2B buyers.
Understanding B2B buyer motivations
There are three distinct types of buying motivation:
Let’s explore these three key B2B buyer motivations:
Benefit driven buyer motivation
This buying style is best associated with the years leading up to periods of economic downturn such as the GFC, or the period immediately before the deep recession the world is facing due to COVID-19. Buying was undertaken to fuel growth or drive an outcome from a brand position – a ‘feel good’. Organisations and individuals had abundant resources at their disposal and there was minimal concern or risk if it didn’t pan out.
Logic driven buyer motivation
Unfortunately, the weakest from a motivational viewpoint, logic buying is about commercial sense and is undertaken to develop and build upon a position to avoid becoming irrelevant. Logic buying is strategic and deliberate.
Fear driven buyer motivation
The most powerful of the three B2B buyer motivations, fear, is going to be the driving force for the next 12 – 24 months as businesses and governments begin to execute their ‘defend’, ‘diversify’, ‘disrupt’ and ‘fast-track’ strategies.
Consumers and businesses alike have built-in fear about parting with their money.
Fear is the realm we find ourselves in and is the ‘new normal’.
Types of ‘fear’ driving B2B buyer motivation
If this is the new normal, what does fear mean from a buying point of view and what are the ‘fears’ that keep businesses and individuals from spending today?
These tend to fall into three buckets:
Fear of Waste as buyer motivation
In this economic climate, every dollar and every effort counts. The drive for CapEx and OpEx risk mitigation is high and there will be no spending on something that may not work, is not guaranteed to deliver a result, or will not generate a strong RoI multiple with certainty.
Fear of Folly or Nonessential as buyer motivation
No executive wants to be seen as ostentatious when there is financial pressure and stakeholders / investors are feeling the pain. Companies will significantly cut back on discretionary spending and anything that may be seen as extravagant. Some organisations are even promoting their frugality.
Fear of Pain / Risk Mitigation Rules as buyer motivation
Sitting on cash is the order of the day in an uncertain economy. Cash is king in uncertain times and companies / buyers are keeping their bank balances as flush as possible to ensure they can weather any unforeseen cash issues that may lie ahead.
What the continuing impact of COVID-19 ‘fear’ in buyers will mean for B2B sellers
Most of us can relate to these ‘fears’ personally and understand why it’s tough to get customers to buy today unless there is a strong need causing pain. The continued uncertainty and unchartered waters of today’s economic environment will ensure that ‘fear buying’ continues to be the primary motivation in the buying process in the near term.
So, what impact will this ‘fear’ have on buyer motivation, steps and methods?
Things were looking bleak already according to research houses such as Gartner and CSO Insights (now Korn Ferry). Their research revealed the year on year trend in declining forecasted pipeline: deals that don’t close, declines in number of sales reps and organisations missing revenue budgets and quotas, and significantly longer sales cycles. Ironically, this was against year on year increases in spending on sales technology (CRM) and sales training.
Combined with COVID-19 it is inevitable B2B sellers will need to respond; but before it gets better they will experience:
- continuing trend of declining revenue budgets and quotas being achieved
- decreases in sales team sizes
- redistribution of CapEx and OpEx budget share from sales training and sales enablement to spending on automation and tech driven solutions.
On the positive side, although B2B deal volume will decrease, buyers and sellers will soon see a significant reduction in sales cycle time as buying decisions start be motivated more by logic – to be deliberate, surgical and completed with a sense of urgency.
In Part 2 of this Better understanding B2B buyers series, we’ll look at the steps buying organisations are employing around decision making.
And in Part 3 we’ll look at method, including the B2B omni-channel boom, and in particular B2B digital ecommerce.
And, if you’d like a briefing on the impact of the coronavirus on your B2B sales and how it could impact your buyer interactions, please get in touch.
Never miss a post
Stay up-to-date with business development insights and tips from our blog.
How are Fortune 500 companies dealing with the coronavirus pandemic? Although there is still a great deal of economic ‘crystal balling’ going on at present, some fascinating research has just been released by FORTUNE following a survey of FORTUNE 500 CEOs. Some of the more interesting and telling findings include: 52% of CEOs are […]