For the past several months, I’ve been following developments relating to a research and thought leadership initiative launched by LinkedIn in collaboration with Bain & Company. The goal of the initiative is to identify what causes a B2B buying group to purchase a particular company’s offering.
This initiative has been led primarily by Jann Schwarz, the Senior Director, Marketplace Innovation & Strategy at LinkedIn, Mimi Turner, the Head of Marketplace Innovation at LinkedIn, and Jamie Cleghorn and colleagues at Bain & Company.
The researchers at LinkedIn and Bain have coined the term Buyability to describe what business buyers need to believe to have the confidence to make or recommend a purchase.
A survey of 750 B2B buyers conducted by the initiative’s researchers identified five main factors that business buyers need to feel confident about. When the researchers analyzed the survey results, they found that the most important factor buyers identified is to feel confident they can defend their decision if the purchase goes wrong. This was slightly more important to buyers than feeling confident the product or service they recommended could do the job.
These research findings strongly suggest that an essential element of Buyability is that business buyers must perceive a prospective vendor’s product or service to be a “safe” choice.
Buyer Risk Aversion Isn’t New
The bias of business buyers toward “safe” purchases is not new. It has been discussed frequently in the B2B marketing literature for many years.
For example, in his 2009 book, The BuyerSphere Project, Gord Hotchkiss emphasized the importance of buyer risk aversion in the B2B buying process. He wrote:
“B2B buying decisions are usually driven by one emotion – fear. Specifically, B2B buying is all about minimizing fear by eliminating risk . . . The importance of risk aversion on the part of the buyer cannot be overstated. It’s the essence of B2B buying. To state it in plainer terms, ‘99% of B2B buying is about covering your butt.’ “
The Corporate Executive Board (CEB) (now part of Gartner) and Google also pointed to the importance of buyer risk aversion in their popular 2013 white paper, “From Promotion to Emotion: Connecting B2B Customers to Brands.” CEB and Google observed that B2B buying often exhibited greater emotionality that B2C buying and offered this explanation.
“B2B purchases entail personal risk – far more than most B2C purchases. B2B purchase stakeholders fear:
Losing time and effort if a purchase decision goes poorlyLosing credibility if they make a recommendation for an unsuccessful purchaseLosing their job if they are responsible for a failed purchase” (Emphasis in original)Unbalanced Incentives Cause Buyer Risk Aversion
Most business buyers are predisposed to favor “safe” purchases because of unbalanced incentives. Most buyers perceive that they will receive only minimal rewards (tangible or emotional) if they recommend buying something that works well, but they also believe they can significantly damage their career if they recommend a purchase that goes badly.
As a result, most buyers are inclined to choose what they perceive to be the safest solution that meets basic performance requirements, rather than one that appears to be “better,” but more risky.
Buyability Has Great Potential
So, the buyer risk aversion component of the Buyability model isn’t really new, but that doesn’t diminish the importance or the potential value of the LinkedIn/Bain initiative.
The initiative has already generated a significant amount of interest in the B2B marketing community, and several industry organizations – including, among others, WARC, the Association of National Advertisers (ANA), and the International Advertising Association (IAA) – are supporting the initiative, which should further increase interest among B2B marketers.
In addition, during a recent presentation, Jann Schwarz and Mimi Turner stated that they are now beginning the work needed to operationalize the Buyability model. This probably means they will soon be providing examples of actions that B2B companies can take to nurture a perception of safety in the minds of their potential buyers.
While we await these examples, the research already done by the initiative’s leaders makes three things abundantly clear.
The most influential factor for building a B2B buyer’s confidence in purchasing from a prospective vendor is having previous personal experience with the vendor.
