The context in which people consider buying something has a significant impact on how the buying decision is made and on what is (or isn’t) ultimately bought.
Hundreds of research studies conducted by cognitive scientists over the past four-plus decades have shown that contextual factors can affect everything from how we react to marketing messages and offers, to how we perceive specific products or services, to how we make buying decisions.
More recently, neuroscientists have used functional MRI technologies to identify the specific areas of the brain that are activated under various decision-making conditions. This research has confirmed that contextual factors can impact what areas of our brain are involved in making decisions.
Understanding the “buying context” is therefore vital for effective marketing. Context obviously affects how individuals make buying decisions, and I plan to address that topic in a future post.
In this post, I’ll discuss how the buying context shapes the attributes of the B2B buying process, and I’ll argue that most B2B companies need marketing strategies and programs for more than one type of buying process.
The Many “Flavors” of B2B Buying
Most of the research and published literature about B2B marketing has focused on “high-consideration” purchases that typically involve multiple decision-makers, complex decision-making processes, and lengthy buying cycles.
For example, in the 2022 B2B Buyer Behavior Survey by Demand Gen Report, 59% of the survey respondents said their average buying group included four or more individuals, and 23% said their average buying group contained seven people or more.
But, high-consideration purchases with large buying groups and long buying cycles have never represented all (or even most) B2B buying. In fact, many B2B purchases are routine, with buying decisions being made fairly quickly, often by one person.
The importance of buying scenarios that don’t fit the high-consideration stereotype can be seen in the expanding role of B2B e-commerce and, more specifically, in the rapid growth of online B2B marketplaces.
Online B2B marketplaces have become the fastest-growing segment of a rapidly growing B2B e-commerce market. Digital Commerce 360 has estimated that online B2B marketplaces will produce $112 billion in sales in 2023, up 100% from sales of $56 billion in 2022.
Research has also shown that marketplaces and other B2B e-commerce channels are no longer just for low-ticket purchases. In a 2021 survey by McKinsey, 85% of business buyers said they are willing to spend $50,000 or more on a single purchase made via an e-commerce channel or other remote interactions, and 35% said they are willing to spend $500,000 or more.
The reality is, many B2B companies derive significant revenue from more than one type of buying situation, and these different buying scenarios require different marketing strategies and programs to produce maximum results. Therefore, identifying the buying scenarios that are relevant for your company should be an integral part of your go-to-market planning.
The Buying Context Shapes the Buying Process
The characteristics of a B2B buying process are largely dictated by the context in which a potential purchase is considered, as the following diagram illustrates.
The box on the left side of the diagram contains several factors that describe the context in which potential purchases are considered. One common denominator across most of these factors is that they capture the level of risk associated with a prospective purchase. In this case, “risk” includes both risk for the buying organization and professional risk for the individuals participating in the purchase decision.
For example, buyers will likely perceive a high level of risk if they aren’t familiar with a product or service, or if the product or service has a high level of strategic importance for their company.
The box on the right side of the diagram describes the major attributes of the buying process. These include the size and composition of the buying group, the length of the buying cycle, the volume and nature of the activities performed in the buying process, and the use of formal procurement processes.
As the perceived risk associated with a proposed purchase increases, buyers will take steps to mitigate that risk, and these steps will largely dictate the attributes of the buying process that’s used.
As a result, the buying process used for a high-risk purchase will usually involve more people, include more research activities, and require more time to finish than the process used for a low-risk purchase.
Not all contextual factors are directly linked to perceived risk. For example, the explicit functional goals and the implicit psychological and emotional goals of the individuals involved in making the purchase decision will also affect the attributes of the buying process. I’ll have more to say about this topic in my next post on context effects.
The bottom line is that marketers need to understand the “buying contexts” that are relevant for their company and develop marketing programs that will fit each of these buying scenarios.
Top image courtesy of Lukas Koster via Flickr (CC).