Why Doesn’t the Buyer Buy?

Barbara Bix raises some good questions related to our survey; she goes on to say that companies are buying goods and services that they perceive as necessities.  I do not think the economy has sunk to the existence/necessity level, and believe that many purchase decisions are driven by factors other than necessities.

Buyers (or buying committees) respond to the tone or tenor of their company which is often expressed in both direct and indirect incentives.  At the current time, the tone at most companies is conservative, reflecting the management team’s doubts and uncertainty about the balance of 2009 and 2010.  Expenditures are being managed on a quarter-to-quarter basis, with monthly status reviews.  A premium is paid to those functions that exhibit “agility” and managers who commit errors that lock the company into “the wrong decision” are often castigated.

Buyers are not buying because they are incented or forced not to.  This corporate tone takes many forms:

  • Management telling each function to “do more with less.”
  • The reduction in discretionary buying authority and the establishment of endless review committees.
  • The desire of functional mangers to exceed goals/limits for a more positive review…look, instead of saving 10%, I saved 20%…reward me accordingly.

Barbara suggests that compelling ROIs, coupled with knowledge that your competitors are using your product, combined with strong reference accounts will close the sale.  I agree that all are part of any product/service offering.  However, unless the data presented is so compelling (90 days or less ROI!!!) the negative “do not buy” incentives will out-weigh the decision to buy.  Borrowing from football coach Bill Parcells’ famous “you are what you are” phrase, the economy is what it is and buyers are acting according to their self-interest.

Accepting this, Marketers in 2009 should reflect on past, similar conditions (the Great Depression) and implement the successful strategies used then.  Specifically:

  • Know, understand and cultivate your customer base. Up-sell when possible, but make sure that your key customers know who you are and what you can do when the economy turns around.
  • Build your brand awareness and differentiators within your core target market.  Use the appropriate social networking tools to accomplish this…2009 tools that are the 1930s equivalent of radio and print advertising.
  • Hone your value proposition, stressing the benefits that the buyer will receive.  Communicate this through the appropriate product mix.  Dick Lush has provided some thoughts on value propositions here.

When management loosens the reins, success will flow to those firms who have clearly established who they are and why they are better.

RHM 6/3/09

1 comment to Why Doesn’t the Buyer Buy?

  • Good clarification! I was using the term necessity quite loosely 🙂 For a young relative, necessities are high-priced jeans because all her friends are wearing that brand. Or, as the little girl on Everwood said–when her father asked her to stop treating a younger playmate as a slave–“But, Daddy I NEED one!” I probably should have used the word “priority” instead. That said I still believe, as a salesman that Bob and I worked with at Motorola once said, that you need to “create the compelling event to win the sale. That, of course means executing the three strategies that Bob recommends above.

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