The concept of Buying Center in B-to-B marketing involves reaching the different members of the Buying Center crossing the “gatekeeper” .
Have you ever called a “Decider” a CxO like the VP of Manufacturing if you are trying to sell equipment or called the CIO if you are trying to sell enterprise software? If you have, the Secretary ( Assistant or Admin in the US) would pick up the phone. And here is how the conversation would go:
[ 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.If you are a business and want to get more success out of your B2B Digital Marketing budget, and would like to consult with Dr. Roy- please send an email to Serve@StratoServe.com to schedule a Zoom call.}
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:
Concept testing in new product innovation is worth the cost. In B2B there are normally fewer customers and concept testing is easier and less expensive. But if you are in B2C with millions of potential customers for your new product, concept testing costs do work out.
[Note: This post was originally published on May 30, 2012. Thanks to reader interest we have done minor updates to the post on March 9, 2021.]
For prices starting at under 100,000 $ from leading concept testing agencies, you can get to know what your potential customers think about your new product concept. For consumer food products, let’s say you get one bit of feedback: some folks are wondering about the high sodium level. You can come up with a low-sodium variant and grab large sections of the older population that’s trying to watch its sodium and salt intake for blood pressure. Think of the millions of new customers that the product would have missed without a timely concept test !
The tyranny of buy-class relationships hinders innovation. Buy-classes are a part of the Buy Grid that also considers Buy Phases. The Buy-Grid is an old model of looking at buying decisions in the supply chain. Robinson, Faris and Wind in 1967 (here is a nice summary) came up with the buy-grid to say that organizations have different processes depending on whether the B2B buy was a straight rebuy, modified rebuy or a new buy.
Jeffrey Pfeffer has a new book (2010) out on Power and you tend to listen to Pfeffer given his huge eminence in the field of power in organizations. This blog’s interest in Pfeffer really goes back to how power works in B2B,Distribution Channels and Supply Chain relationships.In this latest book, the most fascinating point to me was the “just world” hypothesis. We tend to believe that if you do your job well, are fair in your dealings – the system will take care of you- and you’ll be all right i.e. you’ll get promoted, keep getting business or supplies etc. etc.
The media coverage of the BP report highlights the blame game between BP and its subcontractors. But to be fair to the BP report there is a part in the full BP report (Section 6 Part 5 page 185 of 192) that spells out what BP and the offshore oil drilling industry might like toContinue reading “Let’s be fair to the BP report for recognizing B2B and Supply Chain control and oversight”
The contrast between the buy side folks and the sell side folks of the same firm is truly fascinating. Here are three fun differences between the buy side (supply chain, procurement,purchasing ) folks and sell side (marketing and sales people) of the same firm. As a CEO try using what applies to your firm:
A recent (2010) article in the McKinsey Quarterly suggests that the “push push” and “constant contact” approach in sales is avoidable in B2B sales particularly for high-tech products and services. 35% of the 1200 firms surveyed felt that they were contacted too much!
The IBM Study (Accessed February 2009) points out that visibility and risk are important concerns of supply chain managers. The summary of the report suggests that companies seem to be more in touch with their suppliers than their customers when it comes to aligning supply with demand. More bluntly the buy side and the sell side have little clue about what’s developing on either side of the firm’s value chain.
Supply Chains and B2B is about the flow of goods and services across links of the value chain. Three components that make up this flow is the actual good or service, information about demand and supply at various points of the value chain and money that moves from B2B in reverse. The money pays for the variable costs (like direct raw material) and other fixed costs like salaries, rent etc.
