Purchase Behavior
Business customers – as compared to consumers – tend to be more rational, are more concerned with quality, and look to make lasting relationships.
LEARNING OBJECTIVES
Identify the unique characteristics of B2B purchase behavior and how it influences B2B marketing tactics
KEY TAKEAWAYS
Key Points
- Notable differences exist in the purchase behavior of B2B versus consumer marketing due to the length and complexity of B2B transactions.
- Business customers are more cautious and rational in their purchasing decisions than mass market consumers.
- Though challenging due to the complexity of the industrial market, purchase behavior analytics also allow B2B companies to segment target audiences.
Key Terms
- supply side: In a market trade, the side where the supply comes from.
- marketing mix: A business tool used in marketing products; often crucial when determining a product or brand’s unique selling point. Often synonymous with the four Ps: price, product, promotion, and place.
Purchase Behavior
Business-to-business or B2B marketing targets markets where the end users or customers are the purchasers of goods and services. These customers are individuals, companies, organizations or governments, and consume industrial rather than mass market goods. Business customers also purchase a wide variety of different services, depending on their business needs.
Purchase Behavior: Lengthy and complex sales cycles influence B2B purchase behavior.
Notable differences exist in the purchase behavior of B2B versus consumer marketing due to the length and complexity of B2B transactions. However, like consumer markets, business marketers monitor and analyze customer purchase behavior to develop segmentation strategies and customer intelligence.
Characteristics of B2B Purchase Behavior
Because B2B sales cycles can extend over months and even a few years, the business customers are more cautious and rational in their purchasing decisions than day-to-day consumers. Construction materials, office equipment or accounting services can cost organizations tens or even hundreds of thousands of dollars. Commitment times are also longer, as B2B buyer-seller relationships can extend over the lifetime of the product or service delivery period. For example, a company that purchases software products may also buy installation and training services to facilitate to help employees adopt the technology. The entire customer experience can extend from the close of the transaction to the expiration date of the service contract.
Some of the behavior characteristics unique to B2B purchase behavior:
- A trend towards more rational, rather than “impulse” buying behavior
- Greater value attributed to product or service features such as quality and cost-effectiveness
- Preference for partnering with reliable, cooperative and reputable organizations
B2B Customer Segmentation
Predicting customer purchase behavior also allows B2B companies to segment industrial markets. Companies and organizations face challenges in business market segmentation since B2B markets face greater complexity in buying processes, buying criteria and actual products and services. Additionally, measuring strategic data relevant to the buyer’s target audience and overall marketing strategy is challenging due to the long and complicated progress of doing B2B transactions.
Nevertheless, companies that segment groups of potential customers with similar wants and demands are able to customize a marketing mix that works for different audiences. B2B companies also potentially work with different suppliers. The goal for every industrial market segmentation scheme is to identify the most significant differences among current and potential customers and/or suppliers that will influence their purchase decisions or buying behavior, while keeping the segmentation approach as simple as possible. Thus, segmenting the supply side of an organization can also prove value to companies.