Two Sides to B2B Purchase Decisions
by Kim McWatt
Last week I attended a Customer Focus Group session that two of my colleagues facilitated on behalf of our client. The customer participants were the key parts purchasing managers from nine large truck fleets located in the U.S. and Canada. We probed customers on a variety of dimensions to better understand their businesses and how our client could offer a higher level of service to them.
One part of the session focused on ten “value dimensions” that we asked customers to rank according to order of importance in making a truck parts purchase decision. These dimensions included:
- Country of Origin
- Brand Comfort
- Service / Delivery
- Tools / Infrastructure
- Reputation / Reliability
- Dealer Network
- One Stop Shop (All-Makes)
Based on the discussion prior to the ranking exercise, one would have expected price to the key decision criteria for purchase. Interestingly enough, it wasn’t. The top three value dimensions were: Service / Delivery, Quality, and Availability. Price came in a close fourth.
It’s easy to assume that a purchase decision in a B2B relationship is based strictly on price. Bottom line, a supplier is still dealing with an person who ultimately makes a purchase decision based on rational and emotional dimensions. Rationally, there are value dimensions that MUST be there to be in the running as the supplier of choice – the economic influencers such as competitive price, product specifications, quality, availability, service and delivery.
In the trucking industry, these all impact on uptime and lowest cost of ownership. If a truck is down because of a critical part is not available within 24 hours, the cost to the company is much more than the cost of the individual part. As one of the participants at the session indicated: “Price doesn’t mean anything if you can’t get it to me. Why do we have to wait for parts – availability is very important – if can’t get the part, trucks are sitting around.”
Emotionally, there are non-economic factors that influence the purchase decision. These include: career security (taking risks when making a purchase decision), trust, and, most importantly, the supplier-customer relationship. Eight of the nine participants in the session indicated that their relationship with their account representative was critical in their decision-making process. One of the most telling comments was this: “If everything is equal from product and price standpoint, I will go for the people.”
Ultimately, the comments from our focus group participants show that to be the supplier of choice you need to:
- Ensure economic factors critical to customer decision-making are as good, if not better than your competition. If the price isn’t competitive, or product is not available when the customer needs it, then all the other factors are a moot point.
- Do not neglect the emotional non-economic factors. These factors will be the tipping point between making that sale or not. All other factors being equal, a strong supplier-customer relationship with effective and efficient after-sale support (including any value added support programs) will make all the difference.
After all, the purchase decision is still made by an individual with their own beliefs and values. Appeal to both the rational and emotional, and you have the winning combination.