Vorlesung 3 Buying Center

The difference is defined by the different customer demands:

• The B2C market is the demand of private consumers (single persons or groups)

• The B2B market is the demand of professional organizations

From the private industry segment or public sector:

• The professional buyers organization: The buying center

The main objective of a Buying center analysis:

• It is important to know all persons who are involved in the purchase process

• We have to get access to all members of a buying center to understand the real demand of the customer

• By knowing the specific requirements we can optimize and customize our solution to the specific case

• During the dialogue with the customer we can demonstrate our competence, our strength, our added value and our unique selling points (USP)

Ideally we are able to move through the customers organization without any barriers or being blocked (from someone) before the tender has been send out!

The prerequisite:

Being accepted as trustful (dialogue) partner !

• Early identification of the individual persons on customer side and their roles within the purchasing process

• Come away from simple technical details and product selling up to a solution & consultative selling

• For each role and person we have to develop an individual value proposition (Nutzenversprechen)

The Approver:

• Normally the person with the highest hierarchy level

• Takes the final decision - formalistically

• It is a single person or a committee (i.e. the board of managing directors)

• Is able to sign off the budget, sometimes increases or reduces the budget

• Agrees on the proposed solution of his organization

The Decider

• The most important player at the Buying Center

• Mainly a single person – one hierarchy level below the approver

• Owner of the Budget – his organization is the requester and the user of the solution

• Takes the main responsibility for the project success

• Sometimes identical (same person) with the approver (in midsize-organizations)

The Gatekeeper

• Controls the information flow between purchasing, decider and other members of the Buying Center

• A person who takes care on the objectivity / a correct proceeding of the decision making process

• Sometimes an assistant of the decider (i.e. personal or project assistant)

• Can develop a decision matrix with weighted criteria

• The approval from a Gatekeeper is necessary to pass to the next stage of negotiation

The Influencer

• Subject Matter Experts who have an influence on the decision making process in any way

• Single persons or persons from institutions - direct members of the Buying Center or from external parties (Vendors, independent Engineering office, Consultancies, contact persons from a friendly competitor, lawyers)

• Often directly involved / introduced from the management or from the sourcing department

• Delivers a technical assessment or an evaluation on the basis of commercial assessment

• Sometimes involved in the negotiation process

The Buyer

• Has the formalistic authority for purchasing and Sends out the tender, based on the technical requirements

• Normally a member / members of the professional sourcing / purchase department

• Is involved in the general decision on partners and manages the business relationship to them

• Chief negotiator / major counterpart for the negotiation on pricing, terms & conditions and formal contractual agreements (contract duration, penalties, bonus & malus system…)

• Signs the contract on behalf of the company (sometimes together with the approver)

The User

• Is the future end user of the technical solution, is directly participating from the benefits of a solution

• A single person or a group of representative users (key users) from different departments • Often the primary initiator of the specific demand / generating new demand

• Often involved in the description of the requirement specifications

• Sometimes involved in the testing of a technical solution (test user), delivering a feedback

1. Try to get or to find out the organization Chart (Org chart) from your customer !

2. Try to identify the members of the Buying Center and map the individual persons with the OrgChart and BC roles!

3. Try to find out your Coach / Supporter in the organization: A single person, or better, many persons from different areas who are willing to support you! Idealistic an Opinion Leader in the customer´s organization.

4. Is there someone who supports / prefers your competitor ?

5. Are there some specific relationships between the single persons that have to be considered in the communication strategy ? (sympathy – antipathy / might rivalries / rivalries on competences…)

The 4 qualification stages are a kind of standard template:

1. The lead management process begins with the generation of inquires.

2. Once generated, inquiries will flow through a qualification and nurturing process to identify qualified leads

3. Assessing the quality of prospects and tracking them through the sales qualification process:

• What is the potential of the customer (also beside the actual lead) ?

• Is the lead aligned with the strategy / portfolio of our company ?

• What is the expected profitability / the target price & margin ?

• Is there a chance of ongoing following / business (like annuity services) ?

4. After the qualification process: „Go“ or „No go“ decision from sales management for the opportunity !