B2B purchase decision is not generally a solo shot. It has to be a group decision. Usually there is a team of people who analyze the possible purchase and in some cases there is a top level person who has the power to grant the purchase.
Every b2b organization including you, should consider the factors influencing the purchase decision, while generating your marketing and sales plans.
B2B buying is much more difficult than B2C buying. The tangled interpersonal relations and the several communication processes among the organizational associates, concerned in the buying decision procedure, are the chief provider to this difficulty.
Usually there are a number of factors that can influence a B2B purchase decision, however it is imperative to first understand the typical characteristics of a B2B purchase.
Distinctive characteristics of B2B Buying
- B2b buying is not a single person process but a multi-person process, for almost more than 90% of the b2b buying. Bigger purchase requires decisions from diverse departments, top levels and from different management levels.
- While making a purchase the organizations always follow a careful formal process that leads to the real purchasing
- B2B buying decisions cannot be taken at once. When it comes to critical purchase, the buying decisions can take time as long as a year.
Moving on, even though a B2B purchase decision is way more complex than regular ones, there are a bunch of factors that can influence the former. Studying these factors will not only give you an in-depth understanding of general consumer behavior but will help you draft appropriate sales strategies can help you drive more closures and sales.
FACTORS THAT INFLUENCE B2B PURCHASE DECISION ARE AS FOLLOWS:-
- External factors –
- Economic condition: A major impact on the buying decisions and the strategies are caused by the fluctuations in the money markets and the rate of interests. Both interest rate and business buying have an opposite relation, a decrease in interest rates leads to higher purchase rate.
- Political environment: A change in the government policy makes an impact on the economy, which further leads to affecting the business buying decision of the products. Later, it also changes the B2B purchase decision.
- Competition: In the industry, the main motto of any business is to always stay ahead of their competitors therefore when a business’s competition moves ahead and is changing their product or if they are enjoying in the market because of their suppliers, the businesses tend to change their trends and this also leads to a change in the business buying decision.
- Social environment: Societies and cultures are evolving day by day and the businesses have to keep up with those changes by following updated procedures to meet these changes.
- Internal Factors-
- Business objectives: The goals and objectives act as a major element as to what the business will purchase. If an organization wants to acquire a market by selling cheaper goods they will need to find a supplier with low costs. Though if a business wants to sell better quality products then they might have to look for a very good supplier. The buying behavior depends on the goals and objectives of the businesses.
- Technological factors: While buying a new product the decision makers always consider the existing technology. Few purchases are done to change the current technology. They also make sure that the new products are compatible with the technology or not. Therefore somehow the technology acts as a factor influencing the business buying decisions.
- Manpower Skills: These skills are as important as the decisions makers and the products since they are the ones, who are going to use the new purchases made and are going to make the most of it. Particularly the equipment and machineries. In this way it influences the business buying decisions.
- Individual and Interpersonal Factor
- Individual Factors: It includes as social status, age or cultural background of the decision makers, also influence the buying decisions.
- Interpersonal Conflict: This leads to a change in the results taken by the decision makers. Thus the relationship and the attitude among the decision makers play a very important role in the business buying.
- Conditional Factors
- Present Financial Condition:If a B2B organization is running low on cash, it might decide to make a purchase from its current supplier who offers credit for long. Also if an organization does not have enough of money for a particular purchase, it might then just go for a cheaper and easily available product that is inside their budget.
- Availability: There are times when some buying decisions cannot hang around; the organizational buyers may go to new suppliers who are willing to supply products, if the present suppliers fail to supply the exact product needed.
These are some of the top factors influencing business buying decisions which every B2B company should know.
*Contributed by Rishika Khanna