Some long-standing beliefs about how to sell to other businesses are no longer relevant and out of touch with the current business-to-business landscape, according to the results of a new study sponsored by global communications consultancy Hill & Knowlton and executed by research firm Penn Schoen & Berland Associates.
The survey found that much of the conventional wisdom about B2B purchases doesn’t address today’s complex realities, including trends toward multiple buyers and information sources and the growing importance of word of mouth.
“Our research shows that business purchases are decided by a wide array of buyers and influencers,” said Harlan Teller, president of Hill & Knowlton’s worldwide corporate practice. “Marketers clearly can’t directly reach everyone they need to influence. Public relations is the ‘amplifier’ for the word-of-mouth information that helps drive B2B sales.”
The survey, based on telephone interviews of 100 executives with purchasing responsibilities at Fortune 1000 companies, contradicted a number of B2B marketing myths:
Myth: The higher up the corporate “food chain” marketers target their message, the better off they are, especially when selling big-ticket items and contracts.
Reality: Today’s business purchases are decided by groups that span levels and functions, and procurement directors and department heads, not C-suite executives, most frequently take the lead in large purchase decisions. When asked who plays the lead role in large purchase decisions, the respondents cited procurement directors more often than any other type of executive (36 percent), with department heads a close second (31 percent). CIOs, CFOs and CEOs were cited as taking the lead by only 19 percent, 13 percent and 9 percent respectively. Meanwhile, 84 percent of executives surveyed said that multiple executives are involved in purchasing decisions. Only 28 percent of even C-suite executives said they make purchasing decisions alone.
Myth: High-cost marketing methods such as advertising, direct marketing and collateral are the best ways to drive B2B sales.
Reality: When evaluating suppliers, buyers rely on multiple sources, but are most influenced by word of mouth and events. When asked what information sources they regularly turn to when identifying a short list of suppliers, 71 percent of the executives surveyed cited word of mouth, while 56 percent mentioned events. These sources, along with Internet sites (46 percent) and news coverage (40 percent), were mentioned more frequently than collateral (29 percent), direct marketing (16 percent) and advertising (13 percent).
Myth: Advertising and direct marketing are especially critical when targeting high-end customers.
Reality: The survey found that the highest-spending customers (those who spend more than $10 million annually) actually rely more on word of mouth than those with budgets under $1 million.
Myth: Purchasers make their decision on product requirements and price alone.
Reality: Though the executives agreed price is critical, they also said that relationships and company reputation weigh more in their purchases than considerations of products’ quality, reliability, and ability to meet their requirements.
“Today’s B2B marketers are facing an unprecedented web of buying influences, driven by corporate consolidation, centralized purchasing and collective decisionmaking,” says Teller. “To get on the short list and make the sale, marketers need to build strong relationships, referrals and reputation. And that means going beyond advertising and direct marketing to build targeted public relations and event management, backed by superior research and media strategy.”