I had the pleasure of producing Enquiro’s recent webinar titled Beyond the B2B Buying Funnel. Being a B2B marketer myself, I’m quite fond of the funnel concept and use it to map things like lead volume vs. position in the sales/marketing cycle. An interview I conducted with Jim Sterne takes a look at funnels of different shapes and how they reveal demand generation ailments and successes.
But where does the funnel fall short? One of the main messages I’ve taken from the material is that we shouldn’t look to the funnel model to imply a clear top-to-bottom progression in the sales process. Gord Hotchkiss refers to new research which shows that buyers are prone to experiencing a “risk gap” which, if not addressed by the marketer, acts as a plug in the funnel.
Risk is a fascinating concept in the field of B2B buying. One of the webinar presenters, Jon Miller, pointed out that a bad purchase decision can cost you your reputation or even your job, while good decisions will often benefit the company more than the individual.
So how does an individual mitigate risk? In-depth interviews with buyers, which were a part of the research methodology, show that buyers gravitate to six ways of dealing with it:
- Rely on own past experience and drawing upon company-approved vendors
- Listening to word of mouth and experience of others
- Asking their existing vendors for advice
- Assessing the credibility of the potential vendor
- Checking out the vendor online, including on search engines
- Weighing price options
Keep in mind that there is the risk to the individual, other individuals involved in the purchase decision, and risk to the organization as a whole. It becomes complex very quickly when risks to the different buyers aren’t the same – and they rarely are. And while companies have ways of giving structure to buying, e.g. through RFQ processes, findings show that the important decisions on a personal level aren’t always necessarily rational. We depend on our own library of heuristic shortcuts to come to decisions which can be irrational. Gord Hotchkiss also talked about these shortcuts, and how they are based on existing belief structures in this post on Herbert Simon’s concept of bounded rationality.
While it may be difficult to market against irrational buying decisions, there is hope, especially if we understand how irrational behavior is linked to risk. Part of eliminating the risk gap includes going back to basic sales and marketing principles, identifying and developing a market before we sell to them. As marketers, it is vital that we understand the specific risk gaps associated with buying from our company, in our industry, and help the buyer bridge those more effectively.
The 60-minute webinar was recorded and is available on demand. In it, you’ll hear Gord Hotchkiss present the new research along with Mark McMaster (Google), Ben Hanna (Business.com), Jon Miller (Marketo), Matthias Blume (Covario) and Chris Golec (Demandbase). The B2B Expert Series of webinars is moderated by Bill Barnes.