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Winning the battle of purchasing

February 28, 2022
Timo Kruskopf

If you thought selling is a challenge, buying is a deadly game.

Once again, I’m in the hot seat in front of pale faces who have my future in their hands. I can feel mine sweating, but trying to keep my body language positive and professional. I’ve practised this so many times and still, I have butterflies in my gut. This is a case we have to win. It’s a must.

Only one on the opposite side has a hearty smile on his face. One concentrates on his laptop screen; the third’s laser eyes burn holes in my chest. Over the past 30 years of my professional career, I’ve learnt nothing. It still feels like being cooked in a wok.

Selling intangible investment services – like marketing – is not a one-time shot. Usually, it takes over half a year to get in front of the buying committee (my personally high score is close to 5 years). Hundreds of times I’ve wondered how purchasers think and make decisions. I try to imitate a crime-series profiler, reading micro expressions from every face. Where can I find the magic wand and pick the winning rabbit from the hat – the killer argument that puts the case in our favour?

Every purchase is a risk

The ancient one-liner from businessman and philanthropist Charles Revson is more valid than ever: “In the factory we make cosmetics; in the store we sell hope.” That’s how Revlon has operated ever since. It’s a valid dictum for emotionally-charged products like cosmetics, but is it also valid for purchasing a 100-ton bulldozer or an enterprise-wide ERP platform?

I’ve thought selling is hard, but purchasing is even harder. By purchasing, I mean everything where you agree to pay something for products or services: investments, agreements, contracts, etc.

The main reason is choice overload. I can imagine how frustrated also marketing purchasers are with an immense lack of differentiation from vendors trying to do business with them. In this world of category specifications and ISO standards, manufacturers and producers focus on cost competitiveness. It’s rational and can easily be compared on a spreadsheet. But should we compare agony, torment, mental torture and grief with overall usability and user satisfaction? We now turn it into efficiencies: how many tons a bulldozer moves in an hour, or the amount of data transferred through an ERP.

Buyers don’t care about making the right decision—they care about avoiding the wrong one! Afterwards, they might brag about being good decision-makers but the reality is that in this world of identical services and products, making the right decision could be called ‘mission impossible’. And the customer-perceived risk is even more important when buying knowledge-intensive solutions and intangible services.

The reality is that 99% of us are totally out of our comfort zone even when confronted with an array of mobile phones. I think I can still manage to buy a coffeemaker from a supermarket, but I need expert support in selecting the right espresso machine. The pleasure of not making the wrong decision is not just a privilege of B2B purchasing departments. We all live in a dangerous world of uncertainty.

The Harvard Business Review tells us that the number of people involved in the buying process has grown from 5.4 two years ago to 6.8 today. Complex structures of products and services require more vertical expertise, and nobody can master everything. Our lives are led by FOMMfear of making mistakes. We feel the pain of loss twice as much as the pleasure derived from gains. Psychologically, purchasing is a mental minefield. If you can avoid it, run.

The unbearable lightness of buying

Earlier this year out of the blue we were approached by a multi-national bank requiring highly technical marketing services. We found out we had previous connections to the new top management and got invited to the pitch for that reason. Our evaluation made it clear that there would be too many with such high references, skills, team experience and added values as we did. Through 2 initial phases, we got through in good spirit and dialogue.

We acknowledged the young relationship got serious: 5 weeks of answering detailed questions from their purchasing department, diving deep into payment terms and deployment timings and locations. Every additional correspondence made me more certain that we would be the winner because nobody would request such detailed data from a losing party.

Then—at the end—I get a call from the darkness in telegram style: “Thank you, you were not chosen.” Period. After some digging, cajoling and threatening I get an additional sentence: “We chose the existing partner.”

Being just as good or a little bit better is not enough. To win this marathon, you need to win by half an hour, not just a bit better.

In studying purchasing, I’ve wondered how we can alleviate the inherent pain involved. Evolution (and perhaps natural selection) has shaped buyers to pursue PMRthe Path of Minimised Risk. The most common example is repeat purchases because standard purchases represent the lowest risk. When you choose to renew an existing contract with a partner, you have succeeded in minimising all related hazards.

The second most common example of minimised risk comes with repeat modified purchases. These are upgrades, like improved corporate software or outsourcing packaging to an existing logistics partner. There are lots of products or services that are subject to change, and therefore re-evaluation is needed from time to time, e.g. computers, software, IT systems and other technological purchases.

Blank-slate purchases are the riskiest buys. That’s when there is no prior experience, i.e. brand new technologies or major ‘net new’ expenditures.

In the IT sector, half of the companies typically simply renew with their existing vendor. The other half will go with an open bid, and half of those will end up with their existing partner anyhow. Potential new partners have little chance of winning the battle. These are figures from an old Gartner study. Overall, there are only a few studies that really crunch this data. But at the end of the day, the art of selling a product means convincing a buyer to jump into the unknown.

Winning the asymmetric warfare of purchasing

People will not always behave in ideal ways. Purchasing does not follow a linear process from zero to a signed contract. Successful sellers have to have the talents as a world-class detective, profiler and combat leader all rolled into one, just to keep all strings in hand.

Fear of the unknown is common. As mentioned earlier, buyers try to avoid making the wrong decisions. Combine that with decision fatigue and it’s no wonder that we tend to go with what’s familiar. As buyers make purchasing decisions, they look to find ways to allay their concerns and worries. To minimise pain and maximise gain.

I’ve found selling a service involves convincing buyers to venture into the unknown. To succeed in demanding value selling, salespeople should not only focus on demonstrating solutions USPs. Especially with B2B customers, managing uncertainty during the sales process is just as important. Addressing prospects’ perceived deployment-related risks, for example, should be an essential part of the process.

Salespeople and managers need to observe and directly address customers’ perceived risks and assuage their fears. Confronting perceived risk during the sales discourse has positive implications on perceived value and so increases the possibility of success.

The strong role of marketing alignment

Marketing is close to religion in its intangibleness. I’ve tried several methods to make our offering more concrete, something our prospect could grab with both hands. One way I’ve tried to allay fears is by demonstrating my own confidence. Last year again I successfully used a profit-sharing model as an early-stage point of entry: showing our willingness to charge based on the marketing operation’s profitability. It quite easily led us to initial purchase discussions. But again, when dear prospect began to imagine fortunes ending up in the wrong pockets, we returned to the standard agreement model.

Nobody buys if they feel uncertain about the path forward. Addressing potential customers’ after-sales-related fears during the marketing and sales process should be seen as an essential part of managing the experience.

The whole reason why marketing takes a dominant role over sales is just this: we can control processes, not outcomes. Marketing touches potential buyers’ miles before sales does. New channels and vehicles give an abundance of choices of how to relieve the poor buyer from the pain of making the wrong decision; marketing can convince purchasers that they are making the right decision.

What could you do to drive revenue as a marketer? Instead of concentrating all your brain power on product benefits, you should gain insights on removing the risk of disappointment, embarrassment or fear of paying too much, of missing ‘the’ product, of not waiting for the next product evolution. Will the newest smartphone stay on the shelf because I’m afraid that I don’t know how to use it and lose face in front of people? Every year, this single fear blocks sales of goods worth billions.

Making risks visible is a precondition for minimising, removing or solving them. Tools for evaluation, ROI calculators or productivity devices are simple to build and makes intangible tangible, but we need more. Emotionally fear of losing face is a big fear that a crowd can alleviate sharing the decision process with peers, hearing what others have done in the same position builds courage. Anything you do, keep it simple, test them and scale-up. Remember that all kinds of content will help to avoid uncertainty. Remember that fear, phobia, worryany kindare emotional states. Rational explanations do little to dispel them. Emotions do.

“I have not failed. I’ve just found 10,000 ways that won’t work.”—Thomas Edison

 

Timo Kruskopf
“Companies don’t buy anything. People do. Always. Your only challenge as a marketer and salesperson is to know why and when someone wants to buy and on what grounds s/he makes her/his choice. Even a nuclear power plant supplier is selected, or unselected, on an emotional basis. So why not smaller purchases. In the end, the winner is the one you trust and believe the most – you make the deal that feels like the best deal.” Timo develops solutions that enable companies to acquire and retain more customers. Rest of the time he likes to spend on the golf course or dive into the scientific literature.

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