Leader Marketing Partnership provides integrated Marketing & PR Services from its home in Stratford-upon Avon to businesses across Warwickshire, the Midlands and beyond.
Most of us would like to think that we are cool and rational decision makers, especially in the workplace.
We might admit to being swayed by brands and advertising when we buy consumer goods and services, but surely in the business environment we are all focused purely on the facts?
Unfortunately, and however difficult it might be for us to accept, this simply isn’t the case.
An established and mounting body of evidence from neuroscience, psychology, and behavioural economics, as well as simple day-to-day experience, points to the fact that few, if any, of us are economically rational in any of our decision making, whether at home or at work.
This has profound implications for business-to-business (b2b) sales and marketing.
Traditional sales and marketing theory, put simply, says that consumers buy with emotion and businesses buy with reason.
Hence all those evocative and aspirational advertisements for consumer goods from cars to cosmetics, alcohol to electronics. And all those dry, factual (and let’s face it, dull) business sales emails.
But what if business buyers are actually as emotional (and even irrational) as their consumer counterparts? Then surely a lot of that b2b selling would be missing the point…
Would this mean, for example, that b2b sales and marketing should become more ‘sexy’, emotional, and aspirational? Well, perhaps that wouldn’t hurt on occasion, but it’s a difficult trick to pull off without looking frivolous.
And good luck with making office supplies or business accounting look sexy!
In fact this is almost certainly the wrong lesson to draw from the science. While imperfect and non-rational decision-making is evident in both consumer and business purchasing, the actual causes – the balance of biases and instincts at play in each – is different in each.
In consumer markets, those beautiful adverts are targeting our known preference for products which we believe will impress those around us; items are already popular among our peers; or brands which aligns to our existing self-image and beliefs.
But this kind of signalling, herding and self-affirmation is far less a factor in b2b market (although by no means absent).
What is likely to be much more significant in the b2b environment is a cognitive bias known as risk aversion.
Cognitive biases are systematic errors in thinking and decision-making which everyone makes when people are processing and interpreting information. Dozens of biases been identified, tested, and documented, building on the pioneering work of behavioural economic Daniel Kahneman and his colleague Amos Tverskey (resulting in their Nobel Prize winning paper Prospect theory: an analysis of decision under risk, and Kahneman’s seminal book Thinking, Fast and Slow).
The bias of risk aversion means that people are generally more risk averse when considering a gain than they are when considering a loss.
This sounds simple, but it has profound implications in b2b purchase decision making.
In this context it means that buyers will be more risk averse than is strictly rational when considering whether to improve their current product or service outcomes.
(Conversely of course, it also makes them much more likely to risk a switch if faced with a loss of benefit or utility, which explains why maintaining the quality of the customer experience is critical for client retention – this is a subject for another day though).
In other words, all other things being equal, your sales prospect is much more likely to prefer the status quo – ‘the devil they know’ – than to taking a chance on something new – even if the logical argument for making the switch looks compelling on paper.
This tendency towards buyer inertia is a fundamental challenge for b2b sales and marketing professionals.
So, what on earth do you do when the prospect’s own subconscious mind is screaming at them not to switch to your product or service?!
Well, first it’s important to remember that risk aversion is just a bias which affects decision making – it is not the entire decision-making process in and of itself. So to be in with any chance at all, you must still take care of the basics by making sure your core proposition is clear, competitive and – yes – logical.
But as we’ve seen, simply winning the argument is unlikely to win the sale. To do that, we need to step up a gear.
So no matter how compelling your b2b proposition looks on paper, simply winning the argument is unlikely to be enough to close the sale.
No matter how much better you believe your product or service to be than the prospect’s existing solution, their natural risk aversion is likely to be creating a powerful inertia effect which is working against you.
The first bit of good news is that by becoming aware of this problem, you have already taken the first step towards tackling it!
The second bit of good news is that, as we have seen, there are plenty of proven sales and marketing techniques which, if used properly and consistently, can help you encourage, reassure, and help your prospect through their inertia and over the line.
To discuss how Leader can help you achieve your b2b sales and marketing goals, contact us today.
Following successful projects with its Water & Energy team, Leader has recently been appointed to manage campaigns for Kingspan’s Access Flooring Division and Kingspan Klargester.