buyer behavior in a recession

Buyer Behavior in a Recession

Presenter:Sco&Albro,FounderandCEO,TippitDate:25February2009

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We help thousands of B2B buyers make better purchasing decisions every day

Q: Where are you currently in your considered purchase process?

Tippit helps buyers make better purchasing decisions via our freely available, open market research.

This gives us unrivaled access to real buyers and in February we surveyed 100 real B2B buyers on a variety of topics.

Topics in a typical buyer survey include purchasing priorities, feature and price analysis, vendor analysis, as well as other psychographic topics.

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The recession’s impact on buyer behavior


Buyer attention is extremely scarce right now (March Madness100)

Bailout Crisis Recession Iceland


The economic downturn is having a material impact on B2B purchasing behavior

MoreFinancialScruCny

ReducedBudgets

HeightenedPriority

NoImpact

IncreaseDiligence

BusinessProcessEfficiency

HardertoConvince

LongerTimeFrame

LowerPriority 1.00%

4.00%

4.00%

7.00%

10.00%

14.00%

19.00%

19.00%

21.00% In spite of the economy, demand for

technology and business services remains quite strong…

But how buyers behave and make purchasing decisions in these areas is changing radically (and changing forever).

As might be expected, buyers are contending with lower budgets and higher financial/ROI thresholds.

In specific areas though, buyers are also placing a higher priority on new purchases. Q: How has the current economic climate impacted the

purchases your business is making?


In spite of the general downturn, buyers are investing in specific areas for specific reasons

When something breaks, it has to be fixed – that remains the most compelling reason for a buyer to make a purchase.

Buyers continue to make purchases in areas that simply “ keep the lights on”, but also to make their businesses more agile and efficient (cost savings).

IT infrastructure (servers, security, and networking equipment) remain a top priority, as do non-obvious applications such as business intelligence.

ReplaceBrokenSystem

ReduceCosts

BusinessAgility

IncreaseRevenues 24.00%

28.00%

37.00%

11.00%

Q: What is your primary reason for making this purchase?


Buyers are gravitating towards “recession-proof” purchasing criteria

Q: When purchasing a CRM solution, what are the most important criteria involved in the decision?

Buyers are looking for purchases that they can cost justify and “slip” into the organization with relatively low transaction costs.

Upfront price is a growing factor in purchasing as buyers shift away from ROI justification and think more about “CFO sticker shock”.

Buyers are even more concerned about transaction costs post purchase (see ease of use and integration) which are critical to a successful rollout.

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Demand generation in bad economic times


awareness consideration purchase

57% of CRM buyers are buying for the first time

70% of buyers say they currently use Outlook/Excel for

CRM

3rd party objective interactions

vendor specific interactions

closing a CRM deal requires 21-30 interactions over a 6-9 month period

DOWNLOADING

BROWSING

PROJECT

SHORTLIST

DECISION

display advertising

whitepaperwebinar

analyst support

vendor sales/lead qualification

outbound email

customer feedback

offer accelerators -- demo -- RAQ -- chat…

85% of buyers rank online sources as

best and most trusted

Buyers prefer 3rd party info sources to vendor

specific sources

Among existing CRM users, ~50% are using legacy systems like ACT

Many buyers lack a compelling event to get them to the final

purchase

Buyers start on search engines, move to 3rd

party sites, and then get to vendors

Make it easy: buyers rank ease of use as the # 1 requirement

Plan campaigns that account for attention scarcity (openness + nurturing wins)


Remember that buyers want simplicity and efficiency now more than ever

Q: What advice would you give to vendors in an effort to help you as a buyer more?

Buyers can’t wait for vendors to simplify purchasing for them, rating “Information Simplification” as the top advice for vendors.

Simplicity is the buyers’ collective cry for help as they suffer from severe attention scarcity in their personal and professional lives because of the economic crisis.

Buyers tend to use three information sources in a sequenced fashion, from search engine to publisher site to vendor site, as they work their way through considered purchases.


Retool value props, messaging, and sound bytes for “bad” times

It’s critical to “interrupt” buyers with evocative messaging, particularly given the challenges that attention scarcity presents.

Recession proof messaging should be simple, focused on value, and provide reasons to use (as opposed to reasons to buy).

Develop a positioning platform per major audience type that you are targeting, traffic that messaging, and then test and optimize it.

>> HP ProCurve mail in rebate – get it now!


Do not forget to block and tackle in specific areas like conversion rate optimization

There’s low hanging fruit available to all vendor marketing departments, even in a tough economic climate like this one.

That low hanging fruit typically comes in the form of simple sales and marketing execution.

Particularly in areas like conversion rate optimization, copywriting, and the dreaded marketing to sales handoff.


Remember that recessions have been good times for demand gen professionals

0

0.5

1.0

1.5

2.0

DecreasedAdSpend IncreasedAdSpendupto28%

% in

crea

se in

ven

do

r m

arke

t sh

are

(Base: 2,000 businesses in PIMS database)

Market Share Gains in Recessions since 1920


Tippit is the world’s fastest growing business media companyFor buyers, we are an “open” research company

Research and analyst services designed to help buyers

Freely distributed and accessible all over the internet

For vendors, we are true sales and marketing experts

Demand gen products that are purpose built for B2B vendors

A deep understanding of B2B sales/marketing funnels

We connect thousands of B2B buyers with vendors who can meet their needs every day

buyer behavior in a recession

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thousands of b2b buyers

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