Psychology of the Buyer

Posted: 11th May 2015

Psychology of the Buyer

This can be quite an important subject for all of us involved in selling, and that is ALL of us isn’t it? After all, as Geoff Burch says “selling is the only activity we do that brings money into our business, everything else generates cost!” The fact is that we need to sell to survive.

This is of course a massive topic, and this piece will really not drill too deeply into psychological analysis. Instead we will try to point out some things which are often common sense, but which are often neglected unless you have a checklist to tick off!

Firstly there are two types of buyers (broadly speaking):

  • Consumers
  • Professional Buyers

There is some blurring of the edges. Many small business people behave like consumers rather than professional buyers. If we explain to you the most important reason why professional buyers are different you will also understand why small business buyers (which includes most WiRE members) often behave more like consumers.

A consumer, you, me, or anyone who walks into a shop on the high street (or a site on the web) to make a purchase will frequently make unwise or emotive buying decisions. We all have items of clothing sitting in our closets which we have never worn. We all have kitchen gadgets we never use, books we have never read. Have we ever sacked ourselves for making such a purchase? Have we ever given ourselves a bad appraisal? A reduced pay rise? Withheld a bonus payment? Demoted ourselves? Taken ourselves to task humiliatingly in a board meeting? Of course we haven’t! People buy unwisely all the time, and although we may feel daft

For a day or two, generally speaking there is no negative long term impact on our life. If a professional buyer makes an unwise purchasing decision all of these potentially very negative career implications are possible.

So the first truism we need to know is this:

  • Professional Buyers spend their boss’ money more carefully than they spend their own!

Partially because of this important differentiation and partially because of limitations of space we will focus the rest of the article on the behaviour of professional buyers. The second truism however applies to both types of buyers anyway:

  • The buyer decides what is valuable and what is value added – not you!
    • This needs a bit of explanation. Some buyers DO value that you spent umpteen days hand knitting a pullover and that it is unique. Other buyers think it is directly comparable with a £8 jumper from Primark. You can never persuade them otherwise.
    • A more obvious example is the company that made car fan belts that were 20% more expensive than all their competitors because they came in 33 different colours and shades. They made no sales because no buyer of a car fan belt places a value on what colour it is!

The third truism is very unique to professional buyers, and also needs a bit of explanation:

  • To a professional buyer benefits almost always need to be translatable into financial terms. They want to see/make profits or savings for their business not “things” or “features”
    • If you want a professional buyer to pay for a more expensive, higher quality version of something, they won’t do it because it’s “nicer” or “presents a good image”; there need to be clear financial benefits –
      • It’s more reliable so there is a cost saving on servicing and repair
      • It lasts longer so you replace less frequently, thereby saving money

The fourth truism is to do with larger scale purchases.

  • You will rarely get an instant decision from a professional buyer. The length of the process will frequently increase with the size of the deal involved.
    • A good sales response to this is:
      • You need to make clear progress in each meeting.
      • Have a strategy which sets you a concrete goal for your sales meeting. This might be a diary date for the next meeting, and agreement to see a presentation or a prototype.
      • It must be concrete, not just a generic expression of interest and an intangible and unconfirmed agreement to talk again!

Our final truism for this piece is as follows:

  • There are many needs in the professional buyer’s head BEFORE you even get to price. You have to tick all these boxes AS A GIVEN before the price negotiation even begins:
    • Available
    • Reliable
    • Service consistency
    • None of these are a reason for a buyer to pay more, they are the minimum standards (as defined by buyers, not by sellers) before a price negotiation can even take place!