6.4. How the Buying Process Works
For years, the buying process was considered to be linear; scholars and researchers who closely monitored buying behavior identified several steps that the B2B customer goes through before they make a purchase. It is helpful to understand these steps to appreciate the changes that are taking place.
The Traditional View of the Seven Steps of the B2B Buying Process
You are probably familiar with buying as a consumer. But did you ever think about how Aéropostale decides what products will be in their stores for the spring season, how a restaurant determines which beverages it will offer, or how Hewlett-Packard (HP) identifies which parts it will use to manufacture its printers? The buying process outlines the steps that the B2B customer goes through when they are making a purchasing decision on behalf of the company. This process applies whether the buying decision is being made by an individual or by a buying center.
Figure 6.3 Buying Steps
- Recognizing the need. The buyer realizes there is a need for the product or service (Eisenberg, 2001). In the B2B environment, this might occur because of an internal need (e.g., the company needs more office space) or because of a customer need (e.g., green tea is becoming more popular, and so we want to offer it on our menu). This is the ideal opportunity for you to learn about your customers’ needs, although it may be difficult to know exactly when a customer or prospective customer is beginning this step. That is why it is important to engage your customer in dialogue to understand their current and future needs. Sometimes, you can help your customer see an opportunity that they did not realize.
- Defining the need. This step usually involves users as well as initiators to put more definition around the type of product or service that will help meet the need (Eisenberg, 2001). For example, in the case of office space, the head of facilities would ask the head of human resources about the types of new positions that will be needed and the type of workspace each requires. They might also ask for insight from each hiring manager or department head in the company, such as the head of operations, marketing, finance, and other areas. Salespeople can play a role in this step of the buying process by sharing information and insights from other customers, without divulging any confidential information.
- Developing the specifications. This is the step at which the exact needs are outlined (Eisenberg, 2001). For example, if Walmart identified the need to create its own brand of DVD player, the appropriate people in the company would determine the exact specifications of the product: what functions it will have, how large it will be, what materials it will be made of, how many colors will be offered, and all other attributes of the product. When a salesperson has a good relationship with a customer, the buyer might ask the salesperson for insights and advice on different features, functionality, and production costs to finalize the product or service specifications.
- Searching for appropriate suppliers. This step is focused on researching potential suppliers. This research can be conducted online by doing a Google search for suppliers or looking through the Yellow pages or checking out Trade associations. Industry trade shows can be an excellent source of information about prospective suppliers. One of the best ways to identify suppliers is by referrals; use your business network, including LinkedIn, to get feedback about reliable suppliers that might be able to meet your needs.
- Requesting proposals. This is when the buyer or buying center develops a formal request for proposal, often called an RFP, and they identify several potential vendors that could produce the product or service (Eisenberg, 2001). For example, if Home Depot decided that it wanted to upgrade its bags, the buyer would have determined the specification, quantity, shipping points, usage, and other requirements (e.g., being environmentally friendly), and put the information into a formal document that is sent to several bag manufacturers along with questions about the history of the company, key customers, locations, manufacturing capacity, turnaround time, and other relevant information. Each manufacturer would have the opportunity to respond to the RFP with a formal proposal, which means that each company would provide information about their company, capabilities, delivery, and pricing to manufacture the bags. This is an opportunity for a salesperson to respond with a complete proposal that addresses the customer’s needs and concerns.
- Evaluating proposals. After the proposals are submitted, the buyer or buying center reviews each one and determines whether the company would be a good fit for the project. At this point, the number of potential vendor choices is narrowed to a select few. Usually, salespeople from each of the chosen companies are invited to meet with the buyer or buying center to discuss the proposal, capabilities, and pricing. This is the step where a salesperson may need to overcome objections, or the reasons why the customer may not want to choose them as the company of choice (Eisenberg, 2005).
- Making the buying decision. The buyer or buying center chooses one (or the necessary number) of companies to execute the project, finalizes details, negotiates all aspects of the arrangement, and signs a contract. This step requires perseverance and attention to detail on the part of the salesperson. Once the decision is made, the real business of selling begins: delivering the product or service as agreed upon and building the relationship.
- Post-purchase evaluation. Throughout the buying process, the buyer is provided all the good news: how the new product or service will solve their company’s problems, increase demand, reduce costs, or improve profitability. It is the post-purchase evaluation that tells the tale. Did the product or service perform as promised? Was the delivery and installation done correctly and on time? Are the business results in line with expectations? Is the relationship growing? Do the salesperson and their company really care about the performance of the buyer’s company? Does the salesperson add value to the buyer’s company? The process makes sense and is a flow of systematic steps that leads a B2B buyer through a logical buying process. There are two factors that can impact this traditional model though: the Internet and the impact of emotions.
Emotions Dominate B2B Buying
Whether you look at the traditional buying process or the role the Internet plays in providing information, it appears that the B2B buying process is logical and rational, but appearances can be deceiving. Despite the implication and belief that companies make purchasing decisions based on facts, it’s a good idea to remember one of the key tenets of B2B buying mentioned earlier: business-to-business means person-to- person. That means that although a B2B buyer is making a decision on behalf of their company, they still behaves like a consumer and is subject to emotions and feelings.
Fear and Trust
You learned earlier how important trust is in a relationship. People will not buy from someone they don’t trust, which is why some salespeople are more successful than others; they work to establish and develop trust with the customer. People buy when they feel comfortable with the product and the salesperson and when they believe it is the best decision they can make. Moreover, because the B2B purchasing process usually includes multiple people, it means that the salesperson needs to develop a relationship and establish trust with as many people involved in the purchasing process as possible. Although trust is a positive emotion that can influence a sale, an even stronger emotion in B2B buying is fear. Fear is prevalent in almost 90% of B2B (Cash 2017) and so “People are afraid of being sold,” according to Tom Hopkins, author of How to Master the Art of Selling (Fear of buying, 2003). The best way to overcome this fear is to demonstrate that you are trustworthy. That means something as simple as returning a phone call when you say you will, or following up with information as promised. Fear is a strong motivator in a B2B buying decision, and it can’t simply be addressed in one meeting or conversation. “It’s how you handle the little things that show customers how you’ll handle the big ones,” says Tom Hopkins (Fear of buying, 2003).