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Many elements of the sociocultural environment discussed earlier influence organizational as well as consumer buying, but some additional forces are salient only in the organizational setting. In particular, each organization has its own business philosophy that guides its actions in resolving conflicts, handling uncertainty and risk, searching for solutions, and adapting to change. For example, Peabody Coal, which is part of a declining industry, relies on a conservative purchase strategy in an attempt to maintain their status quo.
Figure 4.4 This ad illustrates organization behavior decision criteria.
Five characteristics mark the organizational buying process:
- In organizations, many individuals are involved in making buying decisions.
- The organizational buyer is motivated by both rational and quantitative criteria dominant in organizational decisions; the decision makers are people, subject to many of the same emotional criteria used in personal purchases.
- Organizational buying decisions frequently involve a range of complex technical dimensions. A purchasing agent for Volvo Automobiles, for example, must consider a number of technical factors before ordering a radio to go into the new model. The electronic system, the acoustics of the interior, and the shape of the dashboard are a few of these considerations.
- The organizational decision process frequently spans a considerable time, creating a significant lag between the marketer's initial contact with the customer and the purchasing decision. Since many new factors can enter the picture during this lag time, the marketer's ability to monitor and adjust to these changes is critical.
- Organizations cannot be grouped into precise categories. Each organization has a characteristic way of functioning and a personality.9
The first item in this list of characteristics has important implications. Unlike the consumer buying process, organizational buying involves decision making by groups and enforces rules for making decisions. These two characteristics greatly complicate the task of understanding the buying process. For example, to predict the buying behavior of an organization with certainty, it is important to know who will take part in the buying process, what criteria each member uses in evaluating prospective suppliers, and what influence each member has. It is also necessary to understand something not only about the psychology of the individuals involved but also how they work as a group. Who makes the decision to buy depends in part on the situation. Three types of buying situations have been distinguished: the straight rebuy, the modified rebuy, and the new task.
The straight rebuy is the simplest situation: The company reorders a good or service without any modifications. The transaction tends to be routine and may be handled totally by the purchasing department. With the modified rebuy, the buyer is seeking to modify product specifications, prices, and so on. The purchaser is interested in negotiation, and several participants may take part in the buying decision. A company faces a new task when it considers buying a product for the first time. The number of participants and the amount of information sought tend to increase with the cost and risks associated with the transaction. This situation represents the best opportunity for the marketer.
What are the reasons buyers buy? There are hundreds of reasons prospects will end up buying from you, but the same handful of reasons tend to come up repeatedly.
Key Buying Criteria
A prospective customer’s key buying criteria can be condensed into five topics. A decision to buy a good or service can be made based on:
- Features and Benefits
- Quality
- Professional Support (or “ease of use”)
- Investment
- Image
1. Product Features and Benefits
This is an easy one. Salespeople can list pages and pages of items on features and benefits. Many of them have a competitive slant, rather than a prospect slant.
Features/benefits and the value they provide are important in sales presentations. Remember it’s best to stress the benefits as your table stakes instead of listings hundreds of features. It’s the reactive salesperson who wants to “Spray and Pray”, hoping if that they explain enough of the products features, the prospect will be able to pick out the ones that are important to them.
This tactic can be hit-and-miss. A pro-active salesperson does their research, determines the buying criteria of the prospect in discussions, and then highlights the relevant features/benefits. Pro-active salespeople wouldn’t emphasize buying criteria that are not of relative importance to the target audience—regardless of how important these features are to the salesperson.
The benefits are what count, but the features anchor the target audience, so make sure you state the feature and the benefit, as well as the value. You will find that, in most sales, fewer than three features that are important in the buying criteria. Work with prospective customers to determine what those features are, instead of relying on delivering reams of information that may or may not be relevant.
2. Product Quality
Customers look for quality as a criteria in their buying decision. How well is the product made, how does it compare to similar products, and is the quality difference worth the price difference? These are some of the questions decision-makers at many companies ask themselves in their purchasing decision. The prospect’s interest in quality will fall under one of four areas:
- Good Enough Quality: This is quality adequate to meet the need. If a prospect is looking for a product that merely meets their needs, quality is probably of medium to low importance to them. Emotion has not yet entered into how they evaluate, but in all likelihood, it will.
- The Best Quality: If the prospect suggests that they need “the best quality,” quality will be central to their purchasing decision. Emotional as well as logical business reasons are in play, and the prospect has chosen to allow emotions to dominate the value equation.
- Comparative Quality: If the prospect is looking for only comparative quality, quality has not entered the decision-making process as an important factor, and probably will never be high up the priority list. It’s very hard to move someone in this area, since their other decision criteria are of greater priority. You could spend a lot of time fighting to win the quality battle and still lose the sales war.
3. Product Support/Ease of Use
Product support/ease of use as a key buying criteria implies the service and support the prospect receives support from the many organizations that sell to them. This can take many forms.
Both existing customers and current customers want to feel they:
- Will be taken care of (support for the risk element).
- Can maximize the value of their purchase (ease of use for the investment element).
If a company emphasizes professional support/ease of use, it’s because they are going to put the product/service to maximum use, or because they are going into uncharted waters. In either case, if the prospect company needs assistance while using it, there must be someone available to them with the knowledge to help them out.
4. Investment
Investment is a major factor in a prospect’s key purchasing criteria, and a salesperson will need to devote some quality time here to research and preparation. Product Quality and Professional Support tend to feature prominently in discussion because they relate to the prospect’s interest in your goods and services. Investment, however, seems to be a factor for which most salespeople have the shortest bulleted list, because it requires thinking like a buyer.
Prospects are not customers because your product is cool, trendy, or something they can’t live without. In this competitive market, there are so many alternatives to choose from that it can get confusing to a customer to decide on the best investment of their resources. To get an understanding, customers end up asking themselves two sets of questions. First, they ask themselves the extremes questions:
“What do we need to pay more or less attention to?”
“What do I need to increase or decrease?”
“What do I need to amplify or diminish?”
“What do I need extra of or a reduced amount of?”
“Do I need it now or later?”
Salespeople must always be able to identify and answer extremes questions. By having your solution, product, or services, what will the customer get more of or less of? All a customer wants to do is increase something or decrease something.
The second set of questions customers then ask themselves are the how much questions. In other words, extremes questions must be quantifiable. If your answers don’t get into specifics on what you are offering when addressing the extremes questions, your product or service will be viewed as a commodity by customers. “It will increase your productivity” is a commodity statement, because it provides no quantitative value. To address the investment issue, your statements must be quantifiable. “It will increase your productivity by 25 percent over 2 two years” is an investment statement.
Your product or service must address the investment issue, and it must do so in a quantifiable way for it to be of any value to a vice president, let alone a CEO.
Customers are greedy; they want their money back, which is why they would give you any money in the first place. Your product does matter. If a person is going to be saving $1,000,000/year with a specific project that your product is just a small piece of, your return is not only the value your product specifically adds but also the value of the entire project. It may not be the thing that gives the company a great return on their total investment, but it is a very important piece of the whole. Find out the return the customers expect from the whole and then go from there.
Risk costs money. Do not let these new customers control the sales cycle and start dictating your worth to you. Investment is meant to move you from being a seller to becoming a financial partner with the buyer. Find out, quantitatively, what you are worth. Prospects know the numbers; all you have to do is ask the right questions to succeed.
5. Image
Image or Brand remains chief among key purchasing criteria. It is why a consumer still spends more money on shirts from recognizable companies, when they could purchase any old shirt they see. Image is the emotional play, so it should be probed as such. It has many different categories. You must act like a marketing director, helping prospects cultivate their image.
They want to improve their image, from one perspective or another. Focus on ensuring they develop an understanding of the value of doing business with you from their side, not yours. The fact you have been in business for twenty-three years is great, but for most people, it doesn’t matter.
The fact that you’ve been in business that long may mean a lot to you, but its importance to a prospect is that it helps them with their image. Image is not just what you think of yourself, or what the prospect thinks of you. It’s about what the prospect thinks of themselves—and quite frankly, they are certainly more interested in themselves than they are in you.
Why salespeople should consider purchasing criteria when selling
It’s important to consider a prospect’s key purchasing criteria when making sales. Your knowledge and expertise as a salesperson is not an important factor in a prospective customer’s purchasing decision. Instead, salespeople should focus on meeting prospective customers’ key purchasing criteria.
In any sales process, it’s a good idea to take the time to talk and carefully research the customer’s key buying criteria. This will allow you to demonstrate specifically how your product can provide a new solution to a problem or answer a potential customer’s needs.
Skip Miller is President of M3 Learning, a ProActive Sales Management and Sales Training Company based in the heart of Silicon Valley.