Major sales: Who really does the buying?

Major sales: Who really does the buying?
(by Thomas V. Bonoma, Harvard Business Review, July-August 2006)
Summarized by Sander Lietaert and Deva Rangarajan, Vlerick Sales Centre

Identifying the decision makers and their purchasing motives often requires a psychologist’s eye. Account plans are carefully drawn, key accounts receive special management attention, and substantial resources are devoted to the sales process, from prospect identification to post sale service. Even such well-planned and well-executed selling strategies often fail, though, because management has an incomplete understanding of buying psychology – the human side of selling.

Getting at the human factors
The contention is that seller awareness of and attention to the human factors in purchasing will produce higher percentage of completed sales and fewer unpleasant surprises in the selling process. Each party in the buying process has subtle roles and needs. Only the most advanced companies recognize the psychology of buying as a major factor in improving account selection and selling results.

Different buying psychologies exist that make effective selling difficult. On the one hand, companies don’t buy, people do. This knowledge drives the seller to analyse who the important buyers are and what they want. On the other hand, many individuals, some of whom may be unknown to the seller, are involved in most major purchases. Even if all the parties are identified, the outcome of their interaction may be unpredictable from knowledge of them as individuals. Effective selling requires usefully combining the individual and group dynamics of buying to predict what the buying decision making unit will do. For this combination to be practical, the selling company must answer four key questions.

1) Who is in the buying centre? Members of the Decision Making Unit (DMU)
The set of rules, or social tasks, buyers can assume is the same regardless of the product or participants in the purchase decision. This set of rules can be thought of as a fixed set of behavioural pigeonholes into which different managers from different functions can be placed to aid understanding.

The initiator of the purchase process recognizes that some company problems can be solved or avoided by acquiring a product or service.

One or more gatekeepers are involved in the purchase process. These individuals, who may have a title of buyer or purchasing manager, usually act as problem or product experts. They are paid to keep u on the range of vendor offerings.

Influencers are those who have a say in whether a purchase is made and about what is bought. The range of influencers becomes increasingly broad as major purchases are contemplated, because so many corporate resources are involved and so many people affected. In important decisions, board committees, stockholders of a public company, and even ‘lowly’ mechanics can become influencers.

The deciders are those who say yes or no to the contemplated purchase. Often with major purchases, many of a company’s senior managers act together to carry out the decider role. It is important to point out that deciders often do not sign off on purchase, nor do they make them.

The purchaser is concerned with obtaining the product or service. The corporate purchasing department usually fills the purchaser role.

The user is involved with consuming the product or service. Who fills the user role depends on the product or service.

As might be expected, the more complex and involved the buying decision, the larger the decision unit and the more careful its decision.

2) Who are the powerful buyers?
As useful as the DMU concept is, it is difficult to apply because managers do not wear tags that say “decision maker” or “unimportant person”. The powerful are often invisible, at least to vendor representatives.

The key to improved selling effectiveness is in observation and investigation to understand prospect’s corporate power culture. The sales team must also learn the type of power key managers in the buying company have or aspire to. There is no substitute for working hard to understand the dynamics of the buying company.

3) What do they want?
Diagnosing motivation accurately is one of the easiest management tasks to do poorly and one of the most difficult to do well. As marketers know, not all promised benefits will be equally desired by all customers.

First, buyers act as if a complex product or service were decomposable into various benefits. Examples of benefits might include product features, price, reliability, and so on. Second, buyers segment the potential benefits into various categories. The most common of these are financial, product or service, social or political, and personal. Finally, buyers ordinarily are not certain that purchasing the product will actually bring the desired benefit. Because benefits have value only if they actually are delivered, the buyer must be confident that the selling company will keep its promises.

4) How do they perceive us?
How buyers perceive the selling company, its products, and its personnel is very important to efficient selling. Powerful buyers invariable have a wide range of perceptions about a vending company. A simple scheme for keeping tabs on how buyers perceive sellers is to ask sales officials to estimate how the important buyers judge the vending company and its actions. This judgement can be recorded on a continuum ranging from negative to positive. If a more detailed judgement is desired, the selling company can place its products and its people on two axes perpendicular to each other, like this:

Key selling assessments involve:

-     identifying the members of the decision making unit,
-     isolating the powerful buying centre members
-     identifying what they want in terms both priority classes and specific
-     assessing their perceptions of the situation.

Sellers must understand buying, just as buyers must understand selling. When that happens, psychology and marketing begin to come together usefully.

Major sales: Who really does the buying?

& Rankings

Equis Association of MBAs AACSB Financial Times