The ACD of buying behaviour


Many organisations that we work with struggle as their customers often prevaricate when it comes to simply saying yes we will go ahead and buy what you have proposed. Although not the preferred answer, even a no would be acceptable because it is at least certain. What none of us likes is the uncertainty of will they won’t they.

Understanding what happens in someone’s mind when considering whether or not to buy can help the seller both to understand why there might be a delay in the decision and more usefully what can be done to minimise or eradicate that delay. The three main stages in a buying process are Awareness, Consideration and Decision. The solution to eradicate or at least minimise delayed decisions can be found in the earlier stages of awareness and consideration. Waiting until the prospect has entered the decision phase to influence how it might proceed is too late and the seller has, in the main, become a passenger in the process. That said, many “purchasers” don’t have a process for making the decision so there is nothing obvious the seller can do to apply influence.

By the way; I am of course fully aware that the majority of people reading this wear both hats; sellers and buyers and understand the ACD of buying behaviour can benefit all.

Looking at the three stages and what happens in them gives a valuable insight to what sellers can do to influence buying behaviour. The messages in the article are designed to be of equal use regardless of which hat you may be wearing; seller or buyer – no one wants to waste time prevaricating over a decision any more than they would wish to wait for that decision.

Awareness

This is the point or, more likely, series of events that makes a prospect aware that they have a problem that may need to be solved. Imagine; you have had an occasional mystery noise from the car but ignored it. Then there comes the rainy night when it won’t start but eventually it does, then it does it again, then it runs badly in hot weather. Eventually you will conclude that this series of issues might just be clustering together into a real problem. You are now aware.

The above scenario is common in a domestic setting but there is another more common scenario in the business world. As business leaders and other decision makers typically have a multitude of competing issues to consider, the process of issues “clustering” to create an actual problem may take quite some time. This is where the role of a sales person or account manager can provide a valuable service to the prospective buyer. The sales person who understands the industry that the prospective buyer is in will be familiar with the typical issue and problems of that industry so can play a valuable part in raising awareness and in many cases before the problem stage is reached.

Consideration

LI Choice
This will include; can I ignore it or must I fix it, when does it need to be fixed by, can I fix it myself, how much will it cost to fix/ignore, how will I finance it, what impact will the decision have on the business? There will be many other factors especially when making complex business decisions or potentially costly personal ones.

We have written in previous articles about the research which suggests that a “buyer”, especially for a complex or bespoke solution, will on average be 57% of the way through the buying journey before they engage with potential suppliers. We have also publicised another piece of research that found some 75% of new business orders go to suppliers who engage before the potential buyer has reached the 25% mark in their buying journey. We have drawn a number of conclusions from these two sets of findings:

  • The supplier who engages early will be in pole position to win more of the available business
  • The suppliers who wait for the buyer to engage them will be left fighting against pre-conceived ideas, or just fighting over the crumbs and in most cases will need to compromise on price and margin to win the work
  • The buyer who engages early benefits from the suppliers’ knowledge and experience to inform the process of consideration
  • The buyer who engages with suppliers late in the process may fail to get the optimum solution as the engagement process typically focuses on price not value. Critically, they may also address only symptoms and miss the root cause leading to new symptoms popping up. (the operation was successful, but the patient died)

Most cases of prevaricating buyers are found in late engagement scenarios. This is bad for both sides; the buyer is delaying solving the problem which often causes waste (time, money and other resources) and the seller does not have a clear picture of future revenue as the sales forecast cannot be relied upon.

Decision

Hopefully this won’t offend too many of our readers but most people are poor at decision making. The cause is the lack of a systematic process for evaluating and selecting a solution. That process should mainly focus on clinical matters such as; performance, reliability, quality, service levels, etc. It is also natural that the process will include an element of emotion as the decision maker will be concerned about the consequences of making a mistake and this leads to risk aversion behaviour driven by fear, uncertainty and doubt.

A common mistake made by both sellers and buyers is to try to mitigate the risk by doing a financial deal. How odd – “I am uncertain about your offer but if you make it cheaper I will go ahead”. Who is kidding who!? How can a lower price suddenly make a risky purchase acceptable? Similarly, how can a lower price make something that was not ideal for the job at a higher price an acceptable option?

The decision process is always smoother and more predictable, for both parties, when the initial engagement point occurs early in the buying cycle. One key reason is this gives more time for the parties to work together which means more time to test the potential relationship; principles, ethics, capability, delivery mentality, etc. It also allows time for the seller to meet and understand everyone who will be involved in the decision and for the parties to work out a mutually acceptable decision making process.

Another important factor in decision making arising from early engagement is that it gives suppliers time to understand the real problem, not just the symptoms, which in turn enables them to offer the correct solution. Some of the more cynical amongst us might consider this allows the suppliers to have too much influence over the thinking of the buyer to which I would say the buyer always has the ultimate sanction – “NO!”

In summary:

  • Engage early – this is good for both seller and buyer but is more likely to be driven by sellers.
  • Engage widely – both sides need to meet all key people who will be involved in the delivery and operation of the solution as part of the process of deciding the best fit for a successful implementation.
  • For the buyer – choose your preferred supplier before starting to look at solutions; someone that understands your problem and empathises with its impact on your business. A key reason leading to delayed or failed decisions stems from confusing the selection of the supplier with the decision over the product or solution. The initial effort should focus on building the working relationship including how and when a decision will be made.
  • For the seller – decide who you want as your customers and proactively approach them. By all means accept introductions and referrals but beware of compromising your market strategy – you don’t have to say yes to everything!
  • Once the parties have agreed they wish to work together then they can focus jointly on designing and building the solution. This can now be done from a position of mutual trust and interest which is the best way to get the optimum solution while controlling the risks.

Get the ACD right and the decision will flow naturally from the process with a contract close behind!

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