A new study of business buyer motivation offers convincing evidence that the many factors recently at work in U.S. business, from downsizing to niche marketing, have changed the relationship between business and its customers, probably forever. The "Know The Buyer Better" study was conducted for Penton Publishing, a publisher of business, professional, and trade magazines, by George R. Frerichs Inc. (GRFI), Chicago. The study's objective was to "probe the chemistry of business buyers, explore their concerns and aspirations and how they are setting their own goals - all against a backdrop of a vastly changed business environment."

To do this, focus groups and one-on-ones were conducted in ten major markets with over 100 buyers and "buying influentials" in management, product development and design, operations and production in manufacturing and service firms. Industries represented include electronics, machinery, automotive, lodging, food service, pharmaceuticals, and consumer products. The sample was obtained from the circulation lists of various Penton publications.

The buyers talked about their work life, the shifts they see in job priorities, their relationships with associates, and how they juggle their efforts to help their company achieve its goals while working on personal goals.

In general, they feel time-poor/demand-rich - which is nothing new. But the usual work-related stress has an added sense of urgency because of the gloomy job picture. In the past, if you didn't do your job, you were demoted or passed over for advancement. Today, it's more likely you'll be fired.

Some respondents reported that the lines between job responsibilities have blurred as staff reductions force people to "wear many hats" and perform more than one job function. For example, in the company of one respondent, R&D people are now a major part of the sales effort.

Build your franchise

The buyers said that they are spending more time on people-related issues (communicating, motivating, training, coaching) and less on technology or product concerns. Building relationships with customers, vendors, suppliers, and fellow employees is important for them. Because there is less time available for investigating unknown brands, the respondents seem to be telling vendors to build their brand franchises, through advertising and by improving product and service quality. As the report states: "Trusted brands and sources will be more important because of the time scarcity in looking for and investigating unknown brands, the shift in job priorities and the increased need for quality in both products and services. Trust is simply a code word for quality and performance."

"Product has become a broader term," says Howard Gordon, principal, GRFI, Inc. "It may also include a high level of service. The buying decision makers today are buying the vendor's intellect more than they are the product because in many cases technology is advancing far in excess of our ability to consume it. Technology is in fast forward but our ability to use it is in slow motion. Many vendors may have to devote time to educating their customers."

The study report includes a story from the interviews to illustrate this point: "A very competent manufacturing engineer was given the responsibility for acquiring a new piece of machinery for the production process in her personal care products plant. When she met with a sales rep from a supplier company, the rep asked her what her objectives were for the new machine. While she could provide a general concept for the machine, she wasn't sure about the needed specs. The rep replied that he couldn't help her until she knew the specific objectives. She needed assistance with identifying the objectives but she didn't get any help from the rep. He said, 'Let me know when you have your objectives.' She subsequently purchased machinery from a company whose rep did indeed help her develop specific objectives. And the rep from the first company simply lost a sale - largely because he wouldn't educate."

Ignoring chain of command

As younger people move into buying positions they are changing the way things are done, the study found, by circumventing or ignoring the usual chain of command in the buying process and in the climb up the corporate ladder. In addition, to improve efficiency some firms are experimenting with methods of employee empowerment, which in this case means putting purchasing responsibility in the hands of "junior" employees. In terms of buyer behavior trends, 81% of buyers claimed a trickling down of decision making in their company. One buyer noted: "People who work for me are making the decisions as to what they want to buy instead of my having to do it. I find myself signing a lot more regs instead of investigating and writing them myself."

Another stated: "We've tried to push a lot of decision making and smaller dollar items to lower level people. Everyone 'sheen very responsive and productivity has increased. They can get a tool this week instead of waiting for the order to rest on somebody's desk for a month."

Added importance

The study showed that the buyer-vendor relationship has taken on added importance. 36% said they are working with fewer suppliers. And some indicated that they are talking with their suppliers about "vendor co-destiny," inviting and allowing the suppliers to become more involved in determining the company's success.

"My biggest worry with suppliers is complacency - you have to watch out for the 'I-don't-do-windows' attitude. Vendor co-destiny is the key today..."

"There is a trend toward reducing your vendor base and establishing long term partnerships. We're aiming for a 50 percent reduction in suppliers."

When asked where they saw opportunities for suppliers to build supplier/buyer relationships, the respondents identified these areas (multiple responses were allowed):

  • Build honesty/credibility/trust. (Cited by 47%)
  • Strengthen communications/understand our needs/be an extension of us. (43%)
  • Be a technology source. (34%)
  • Concentrate on service/parts availability. (18%)
  • Work on quality improvement. (15%)

The bottom line for business: know thy customer.