Ashwin Bhatia

INDUSTRIA

L

MARK

ETING

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Organizational Buying Process

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What is Value ?

• May not be tangible• Value is PERCEIVED by the buyer• Can enhance value by:

– Packaging– Support services– Reliability– Warranties– Training

Value Chain

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Selling to Organizations

• Usually formal contracts• Extensive search for suppliers• Negotiation• Long buying process• Multiple suppliers• Long-term, loyal relationships

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Selling to Organizations

• Individual behavior contributes to the mission.

• Effects of Bad purchasing decisions– Interruptions in production/operations– Reduction in product quality– Slowdown in distribution– Dissatisfied customers– Wasted resources– Higher costs/lower sales and cash flow/lower profit

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Business Customers

• Fewer• Concentrated

• Need long-term relationships because they are not easy to replace

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Complexities of B2B Buying

TECHNICALCOMPLEXITIES

COMMERCIAL COMPLEXITIES

BEHAVIORALCOMPLEXITIES

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• Products and services, and their applications can be complex.

• New technology• Interface with existing technology• High standards (e.g. clean rooms, surgical

suites)

TECHNICAL COMPLEXITIES

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• So much is open to negotiation– Product, price, terms, discounts, warranties,

delivery, training, service, returns, etc.

• Liability, nonperformance • POWER • $ize of deal, characteristics of parties, the

deal, # of parties involved, complexity of products

COMMERCIAL COMPLEXITIES

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• Negotiating not just with purchasing agent, but multiple parties from multiple functional areas in the organization

• The more people involved, the more complicated it gets

• Technical and commercial complexity can exacerbate the behavioral complexity

BEHAVIORAL COMPLEXITIES

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Who’s on first?

• Key decision maker(s)• Important Product/Vendor attributes• Access to key decision makers• Customer purchasing policies and procedures

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Buying Center (Those associated with the purchase decision)

Buyer – responsible for dealing with suppliers and placing orders (e.g., purchasing agent)

Decider – has the power to make the final purchase decision (e.g., CEO)

Influencer – has the ability to affect what is ordered such as setting order specifications (e.g., engineers, researchers, product managers)

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Buying Center (Those associated with the purchase decision)

User – those who will actually use the product when it is received (e.g., office staff)

Initiator – any Buying Center member who is the first to determine that a need exists

Gatekeeper – anyone who controls access to other Buying Center members (e.g., administrative assistant)

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Ashwin Bhatia

The Decision-Making Process

• Purchasing for business, not self• Purchaser being judged on performance• Formal structure and procedures

– # bidders– Evaluation criteria– Multiple signatories

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• Emotional and Social Factors– Friendship– Like/Dislike vendor/rep– Personal/Professional Favors– Influence of others in organization (+/-)

• Personal/Departmental Needs & Objectives may not match those of the organization.

• Conflict

The Decision-Making Process

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Buystages• Need recognition (May not be decider)• Solution characteristics/quantity (Specs)• Describe solution in detail (Make/Buy)• Find qualified sources (product +)• Receive/analyze proposals (price +)• Evaluate proposalsSelect supplier• Establish order routine• Feedback/Evaluate (FOLLOWUP)

Ashwin Bhatia

Ashwin Bhatia

Buying Scenarios• Newness and past experience with product• Amount/Type of information needed by

influencers/deciders• Number of alternatives

• Common buying situations (buyclasses)– Straight rebuy– Modified rebuy– New task purchase

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Case: Kartos International

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Buying Facilitation is the decision facilitation model that gets added to sales to help buyers address the behind-the-scenes, private considerations necessary to get buy-in to make a purchase

As a decision support tool rather than a problem-solving/product placement method, it is used from the first call through the entire sales cycle, for any size product, in any industry, for B2B sales as well as retail. Used throughout the entire path of the buyer's decision process.

Ashwin Bhatia

Ashwin Bhatia

Buying Facilitation Process

1. Develop marketing materials to professionally represent your solution either on-line or in person.

2. Make an appointment to get in front of the prospect

3. Help the prospect choose the members of the Buying Center

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4. Facilitate prospect’s discovery of what sorts of strategic issues they must manage to get folks on board with potential change.

5. Lead prospects/buyers through tactical issues they must manage before they can choose a solution.

6. Follow up to see if there is anything you can do to help the prospect/buyer decide to purchase.

7. Lead prospects/buyers through the systems issues they must consider in order to determine how any proposed change will disrupt their status quo.

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8. Discuss/present your solution and show the prospect/buyer how it would fit with their need/problem.

9. Discuss how your solution fits with the internal issues that they must manage.

10. Manage objections and differentiate yourself from the competition.

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ADVANTAGES:

Increase closing ratio, even in a down economy

Support the portion of the buying journey that's beyond the scope of technology

Differentiate you from the competition and eliminates the need for price wars and objections

Enables the relationship/political and private issues buyers must handle in their buying decision process

Create a trusting, collaborative communication that forms the basis of a long term relationship

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Who has used Buying Facilitation successfully ?

KPMG (Tax Minimization Team)Morgan Stanley (Retail Brokers)Wachovia Bank (Small Business Bankers)IBM (Software Sales, Account Management)HP (Meeting Management)BOSE (Customer Care)Bose (Customer Service)

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