Understanding the buying behavior of businesses is critical for B2B companies looking to increase sales.
By understanding how businesses make buying decisions, you can optimize your marketing and selling strategies to better align with their needs and preferences.
There has been a shift in how businesses buy over the past few years.
With the advent of digital tools and resources, businesses are now more informed and empowered to make buying decisions independently.
They are also more likely to seek recommendations from their peers before purchasing.
As a result, the traditional B2B sales model is less effective than it once was.
A positive purchase decision declines by as much as 60% when a business does not have a buying journey to reference.
To succeed in today’s B2B market, companies need to adapt their sales strategies to account for these changes in buying behavior.
What is B2B buying behavior?
B2B buying behavior refers to the way businesses make purchase decisions.
This includes the process they go through, the criteria they use to evaluate options, and the decision-makers involved.
Every buying group has unique needs, and understanding the factors that influence their decisions will allow even the average sales person to win more business.
4 Factors influencing B2B buying behavior
Your strategic business goals must align with your target market’s buying behavior.
To better understand how businesses make decisions, we’ve identified four key factors that influence B2B buying behavior:
Policies and Procedural factors
The customer’s decision-making journey shortens when the company has a need that your product or service can more efficiently and effectively meet.
The buying process is also affected by organizational factors such as company size, industry, and buying cycle.
For example, small businesses are more likely to make impulse buying decisions than larger businesses.
They are also more likely to be influenced by personal relationships.
In contrast, larger businesses are more likely to have formalized buying processes.
They are also more likely to be influenced by data and analytics.
The industry also plays a role in buying behavior.
For example, companies in regulated industries such as healthcare or finance are often required to go through a lengthy and complex buying process.
This is because they need to ensure that any purchase complies with regulations.
Your conversion number declines rapidly once the buying group reaches eight decision-makers.
One of the most critical factors influencing buying behavior is the number of decision-makers involved in a purchase decision.
The more people involved in the decision, the longer it will take to reach a decision if one is ever reached at all.
This is because each person will have their own needs and preferences that must be considered.
To increase the likelihood of winning a sale, you need to understand each decision-maker’s role in the buying process.
The most common roles are:
- Initiator: The initiator is the one who first identifies the need for a product or service. They are usually the ones who initiate contact with potential suppliers.
- Influencer: The influencer is the person who provides input on the options available and helps to evaluate them. They are usually experts in their field and are respected by the other decision-makers.
- Decision-maker: The decision-maker is the person who has the final say on which product or service is purchased. They are usually the ones who sign the contract.
- Budget holder: The budget holder is the person who controls the budget for the purchase. They are usually involved in the decision-making process to ensure that the chosen product or service is within budget.
An urgent and compelling reason to buy (buying trigger) is the number one factor influencing B2B buying behavior.
Industry standards also influence the buying process.
An industry standard is a widely accepted way of doing things.
Companies will update their products or services to meet the new standard.
The most common buying triggers are:
- Regulatory changes: Changes in regulations can create a need for a new product or service. The introduction of GDPR in the EU resulted in a need for data privacy products and services.
- Technology changes: Advances in technology can create a need for new products or services.
- Customer needs: Customers’ needs can change over time. If a new product or service can meet those needs better than the existing one, there will be a buying trigger.
- Competitor activity: Competitors can influence buying behavior by introducing new products or services. Suppose a competitor introduces a new product significantly better than what is currently on the market. In that case, it could trigger businesses to adopt a similar product, service, or process to stay relevant.
To win more business, stay up-to-date with industry standards and be able to show how your product or service meets those standards.
Market trends factors
Changes in the market can create a need for new products or services.
To stay ahead of the competition, keep up-to-date with market trends and be able to show how your product or service meets the latest trends if your target market expects it.
What sales reps need to understand about B2B buying behaviors
Your company’s B2b sales strategy should maximize qualifying sales opportunities by targeting the right companies and decision-makers within those companies.
To identify the right sales opportunities, you need to understand buying behaviors:
Early communication with stakeholders involved
The earlier you can include all the relevant stakeholders in the purchase process, the better.
This will ensure that everyone is on the same page and that there are no surprises later on.
A customer deciding whether to buy your product or service is trying to minimize the risk of making a bad decision.
They are more likely to choose the option that they perceive to be the safest.
To increase the chances of winning a sale, show how your product or service minimizes risk and is aligned with the prospect’s vision.
Status quo bias
Status quo bias based on the sunk cost fallacy is the tendency to stick with the status quo because of the fear of losing what has already been invested.
For example, a company may continue using an outdated product because they’ve invested so much in it and want to retain it.
To overcome this bias, you need to show how your product or service is an improvement over the status quo.
Price is always a factor in any buying decision.
To win more business, showing how your product or service is worth the price is essential.
You can do this by highlighting your product or service’s value through social proof, case studies, reviews, and testimonials.
These are key buying behaviors that sales reps need to remember.
By understanding these behaviors, you can adjust your sales strategy to increase the chances of winning more business.