Every time you ask Joe what’s most important to him when choosing a supplier he gives the same answer – “it’s price; they’re all the same, price is the only thing to go by”. And yet, when you dig deeper into Joe’s purchasing habits you find out that he hasn’t changed his suppliers in years despite the fact that the incumbents aren’t always the cheapest. So what is going on?
Are respondents purposefully not giving us the full picture? Are they even aware that they are hiding something from us?
To answer these questions it is important to look at what may limit Joe’s ability to provide a true answer.
There are two factors at play here. The first is people’s inability to understand their true motivations. The second is the brain’s immediate response to make life easy and fall back on gut feeling. We call this bias or heuristics.
Another important question is whether this impacts B2B markets in the same way as consumer markets.
Traditional views of B2B decision making suggest that B2B decision-makers are more rational, and make decisions based on what is best for their organization. However this isn’t always the case:
● B2B decision-makers feel less safe and require more reassurance during a purchase decision,
● The majority of buyers purchase from one of their 3 top of mind brands, even when given the option to examine new suppliers,
● Relationship factors are often the strongest drivers of satisfaction rather than factors like price.
B2B buyers are more emotional than B2C buyers as there are wider implications if a purchasing decision goes wrong. Here are some cognitive biases that are driven by the emotion at play during a B2B decision:
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What causes bias
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What it is
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A practical example
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What this means for marketers
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Fear of losing something and the desire to stay with the devil you know – we call this loss aversion
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The tendency to prefer a current supplier, fearing a loss in performance over anticipating a gain
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Rates of switching auto insurance suppliers are low even when significant savings can be made from by-passing the auto renewal
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Messaging needs a very strong pull component, while communicating how any switch will be handled operationally
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Having a greater belief in what we have experienced and the fear of the unknown. We call this the endowment effect
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People place a higher value on something they have experience with
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Amazon Prime is offered as a free trial to encourage take-up rates – these customers spend twice as much as normal customers
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Free trials can prove very convincing to encourage switching
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Seeing things in a context that is understood. We call this cognitive framing
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Different presentations of information can inform how it is interpreted
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Bleach companies say that 99% of all germs will be killed rather than saying only 1% of all germs survive
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Don’t fear going bold with any messaging. Large figures are likely to impress
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So, don’t be fooled by someone’s immediate response, especially when they say they always buy on price. The truth is out there if you look for it, especially in those responses that are emotional. It is the emotional responses that weigh heavily in business-to-business decision-making even though most buyers would deny this.