Understanding and talking about the Buying Center can help B2B Marketers and Supply Chain Managers for innovation. The Buying Center is a 40 year old concept attributed to Webster and Wind and can be hugely useful to both B2B Marketers and Supply Chain /Procurement managers today. The Buying Center is a part of the informal organization and involve a bunch of people who have varying influence on the B2B buy decision. The individuals in the Buying Center can have one or more of the following roles:
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[ Note: Thank you dear readers for your overwhelming interest in this post originally published on June 7, 2012.The image is updated March 9, 2021.]
- Initiator: This is ideally the person who will actually use the product or service and feels the need. So a machine operator might initiate the requirement for a particular tool or a salesperson might show interest in getting some leads from website visitors. Frequently however, the user may have no knowledge at all that a requirement has been initiated! The latter can happen when say a consultant suggests a purchase.
- Decision maker: in the above examples would be the Production manager who must request Procurement/Supply Chain and Sales Manager who might ask the website team/IT and not even contact the Supply Chain folks.
- Controller/Finance: Should be able to confirm that there is money in the budget for the purchase.
- Purchasing Agent: This could be a Commodity Manager/Supply Manager in the Supply Chain function who for higher value items develops an RFP,seeks bids,negotiates,places orders. In other cases, where if the item or service is specialized the order is placed based on the decision maker’s inputs.
- Influencers: are hard to identify even by the supply manager as they could be users, departments like fire and safety who may weigh in or the hard to believe example of the Chairman’s wife who likes a particular Ad pitch among several Ad agency pitches.
- Gatekeepers: could be the secretary who does not transfer calls or an engineer who does well meaning edits to whatever suppliers propose. The edits can harm the proposal but the engineer is a trainee who is helping the Supply Manager co-ordinate and this fact is unknown to the bidders.
Since the buying center is a concept from the informal organization, it appears as an elephant in the room among groups of B2B marketers, groups of Supply Chain managers and even mixed groups of Buying/Selling managers. Everybody knows about the Buying Center but there is really no document that lists the members (being informal) . Thus the discussion rarely achieves focus and output about what the Buying/Selling managers can do to address the mostly legitimate concerns of the members of the Buying Center.
Given that Buying Centers are alive and well despite globalization,the Internet and the 21st Century it probably is a good time for B2B Marketers to ask and Supply Managers to tell about who the buying center members are. Also since stuff is mostly shared by email both the buying and selling organizations should encourage digital documentation that can be shared by the Buying Center members.
Innovation in the Buying organization can happen if the supplier get a chance to perform. By recognizing the Buying Center and its concerns both Supply Managers and B2B Marketers can help innovation.