Organisational Buyers

If the product or service you are selling is geared to a corporate rather then to a consumer clientele, then some of the rules change. They change because organisations are often not so price sensitive as individuals - they are often more concerned about quality than value. Organisations are not so prone to the psychological factors that motivate individuals to pay for designer brands. Organisations are more demanding about guarantees and service contracts. This is not to say that organisations are impersonal. Ultimately people within the organisations are making the purchasing decisions but their mindset will be different than if they were buying for themselves and out of their own pockets. Organisational buyers will often:

* Fear risk to their standing arising out of poor purchase decisions so they will
tend to buy from suppliers of established good reputation.
This conservative behaviour means that they're not out on a limb if things go wrong.
Everyone else is in the same boat.

* Pay more than they would if they were making a personal purchase, partly due
to a belief that if they pay more, they are getting better quality for their company.
Marketers know this and will often seek to operate tiered pricing - that's where sellers charge
companies a higher price for essentially the same thing, perhaps presenting the package with a
few more frills by way of justification. Ultimately though, real value propositions will win out.

* Be required to compare a number of competing suppliers, particularly for large purchases.
No organisational buyer will buy the first photocopier he/she sees.

* Be conscious of his/her organisation's power in the transaction arising out of the
size of its spend with the supplier and the supplier's consequent dependence on it.
This can at times mean very demanding behaviour around price negotiation, delivery, product
performance, maintenance and service arrangements. The better a deal the organisational buyer
can do at the expense of suppliers, the better he/she looks to the boss! This is most especially
the case where major capital expenditure is in question. Organisational buyers will fight tooth
and nail to get a really good deal if buying technology or property but will usually spend five
times more than they should on stationery, office plant watering services or things they don't
understand like advertising!

Can you take these considerations into account when selling to organisations? What can you do to make it easy for the organisational buyer to do business with you? Here are a few suggestions, some of which may be right for you:

* If you don't have the status/reputation to make the buyer feel protected against risk, could you try to form associations/alliances/affiliate relationships/joint-ventures/partnerships with those who have? Artefact would never buy a machine which will need a ten year maintenance contract from someone we feared would go out of business in six months - would you? Do you expect your customers to?

* Could you modify your product/service offering so as to create a high spec 'corporate' version in order to take advantage of the tendency companies have to pay more for quality?

* Can you make a comparative study of the price/product/service offerings of your competitors and then adjust your offering if necessary so as ensure that if an organisational buyer is holding a beauty contest, you will win?

* Can you organise a negotiating strategy which allows you to give ground on various fronts to the organisational buyer? These buyers need to feel that they are doing their job well, that they are knocking a good deal out of you. Of course you must have a walk away position - a point at which the deal becomes unprofitable and you must walk away rather than give any more ground but that should never be your opening position.