1. Demographic Preferences in Selection of Decision Criteria When
Purchasing Professional Service Providers
Adriana Cuevas
April 29, 2016
The University of Texas at San Antonio
Abstract
This study examines the selection of decision criteria for purchasing professional services in
sales training and negotiations and whether changes in demographic differences alter the selection
process. An online global survey was conducted to measure what purchasers look for when acquiring
professional services, and responses were then analyzed using statistical techniques such as Chi-
squared testing and Analysis of Variance to reveal the significant associations between the
demographics and rating of each decision criteria. Results proved that cost is the least significant
variable when making purchasing decisions, especially when the decision comes from the Learning
and Development department, who is typically willing to spend additional funds on service providers
with a large degree of knowledge and competence. Data additionally showed that larger companies
preferred larger service providers who have the resources to focus more on providing organized and
consistent solutions customizable to each client. Aside from promoting a more efficient way of doing
business, this study presents service providers with a better understanding of what their customers
need and will make them aware of where they need to excel depending on what type of client they
wish to acquire.
Keywords service definition, professional services, sales training, skills training, decision criteria,
purchasing process
Introduction
Today’s corporate environment continues to see an increase in the purchase of varying levels
of professional services. Professional service providers can be loosely defined as “any organization
or profession that offers customized, knowledge-based services to clients” (Source: mindtools.com,
accessed 5 April, 2016), yet despite their ongoing emergence very little research has been conducted

2. into the selection of decision criteria when purchasing professional services such as: accounting,
training, consulting, legal and financial advising, etc. This research aims to determine the current best
business practice in the procurement of business-to-business professional services in training in
sales and negotiations specifically.
According to the 2014 Corporate Learning Factbook, US expenses on corporate training saw a
15% increase from the previous year—the highest growth rate in seven years (Bersin, 2014). In
addition, reports collected from the U.S. Bureau of Economic Analysis along with data from annual
Top Training Company studies show that in 2015 spending by corporations to institutions for
corporate training initiatives reached $160 Billion in North America and $355.6 Billion worldwide
(Source: trainingindustry.com, accessed 5 April, 2016). Hence, in today’s increasingly competitive
global business climate purchasers can enhance their learning curve and gain a competitive
advantage through the correct selection of training service providers.
Aim
This study examines the selection of decision criteria for purchasing professional services for
training in sales and negotiations and whether changes in demographic differences alter the selection
process. Do particular attributes such as: company size, purchaser’s department and position, and
industry alter the finalization of decision criteria when procuring professional training providers?
Literature Review
The U.S.’s consistent economic growth has allowed for the development of a sophisticated
tertiary industry—the sector of the economy that provides services to consumers (Source:
investopedia.com, accessed 6 April, 2016); however there is still some conjecture of the correct
definition of a service. Literature on services marketing holds that the following four characteristics
are the basis for the separate treatment of goods and services: intangibility, heterogeneity,
perishability, and inseparability of production and consumption (Zeithaml, Parasuraman, & Berry
1985). Services can be further broken down into two categories: generic and professional (Hill,
Neeley 1988). Professionals possess expertise developed through formal higher education and
exercise expert judgment when delivering the service, thus generally requiring a higher cost (Hill,
Neeley, 1988). In addition to cost, several other factors such as: the importance of said professional
services, the intangibility and credence qualities, the confined number of objective evaluative criteria,
and the typically low purchase experience have led some researchers to conclude that the purchase
and adoption of professional services yields a much higher level of perceived risk than the
procurement of any other form of service (Mitchell 1998).

3. Data Description
Working regionally and with a large international client database, data was collected through
an online questionnaire of anonymous organizational buyers. Since the survey aimed to discover
what purchasers look for when buying a professional service, respondents were asked to rate their
purchasing preferences on a Likert scale from most to least important. Selection processes from a
range of buyers in multiple industries were then identified upon examination of survey results.
Statistical techniques such as Chi-Squared tests and Analysis of Variance tests were used to disclose
any significant connections between the decision criteria and the person doing the purchasing. The
Chi-Squared test revealed any associations between demographics and the importance rating of
each decision criteria. Similarly, ANOVA tests revealed whether the mean importance rating of
decision criteria differed according to the various demographics being analyzed.
Respondents Company Size Departments Positions Industries
316 3
- Small (less than
$100 mill)
- Med ($100 mill -
$1 bill)
- Large (greater
than $1bill)
3
- Human
Resources
- Learning &
Development
- Sales &
Marketing
4
- Director
- Manager
- Trainer/coach or
assistant
- Consultant
21
-Oil & Gas
-Alternative Energy
-Chemicals
-Construction & Materials
- GeneralIndustries
-Food Producers
-Electronic & Electrical
Equipment
-Mobile
Telecommunications
-Financial Services
-Software & Computer
Services
-Technology Hardw are &
Equipment
- Etc,
• Association (p-value < .050): There is a significant association between the demographic
(purchaser’s company size, department, position, and industry) and rating of the decision criteria.
• No: No significant association was found between the distinct demographics and the final
rating of each decision criteria.

4. Company Size
(Annual
Revenue)
Department Position Industry
Access to references
No No No No
Examples of success
stories No No No No
Length of time in
business No No No No
Previous successful
relationships No No No No
Recommendation
from internal user No No No No
Corporate
membership No No No No
Publications in
subject area No No No No
Top 5 clients by
revenue No No No No
Size of company
Association Association No No
Depth of personnel
No No No No
Training in local
language (if not
English)
Association No No No
Intellectual property
on materials No No No No
Consistency
Association No No No
Flexibility No No No No
Range of options No No No No
A “tried & tested”
solution No No No No
Range of products
No No No No
Customizing solution
to client needs Association No No No

5. Participating in pilot
session No No No No
Most innovative
methods No No No No
Training internal
personnel Association No No No
Cheapest price No No No No
Bringing added value
No No Association No
Tangible ROI No No No No
Ability to measure
training effectiveness No No No No
Helping build case
internally No No No No
Knowledge of client
via research No No No No
Knowledge of industry
sector issues No No No No
Understanding of
cross-cultural
challenges
No No No No
Strong personal
relationship No No No No
Personal contact No No No No
Real world
experiences and
anecdotes
No No No No
Evidence of similar
projects completed No No No No
Charisma and
personal presentation
of trainer No No No No
Personal assessment
of trainer No No No No
Qualifications of
trainer (MBA, PhD,
etc.)
No No No No

6. Ability to challenge
thinking No No No No
Reputation No No No No
Organizational
Capabilities Association No No No
Product No No No No
Cost
No Association Association No
Knowledge and
understanding of
trainer
No No No No
Competence of
individual trainer No Association No No
Results
Company Size (Annual Revenue)
 The size of the company, measured by annual revenue (p-value = .017)

7. The initial Chi-Squared test shows a considerable difference between small and large
companies’ rating of service providers’ size. Results show that of the smaller companies who earn
less than $100 million per year, 35.6% of them consider the size of training provider’s company to be
one of the least important selection criteria. ANOVA results further validate this claim by proving that
the mean difference between small and large companies is significant at the 5% level.
 The provider can offer an option to train delegates in their local language if not English (p-value =
.001)

8. Results show that the mean difference for small companies and medium and large companies
is statistically significant at the 5% level. Companies that make more than $100 million per year
(medium and large) place great importance on a service providers’ ability to provide training in a local
language different from English. This is perhaps attributed to a greater supply of resources that allows
such companies to focus on more sophisticated characteristics such as language options.
 That there is consistency in training delivery and materials across multiple countries (p-value = .000)

9. A notable difference is once again apparent between small and large companies, with 87.6%
of the larger companies placing critical importance on the consistency of a training provider’s
solutions. There is no significant difference in the mean ratings for medium and large companies,
meaning they both place relatively high importance on hiring a service provider who can provide
consistent results.
 The ability of the provider to customize the solution to our needs (p-value = .005)
Analysis shows that companies of all sizes place great significance on a service provider’s
ability to administer customizable solutions to their clients. This proves that in order to be successful,
a training provider must be able to customize different training methods for specific clients. In
addition, results continue to exhibit the trend in which larger companies with better resources place
greater significance on characteristics not attributed to cost.

10.  The opportunity to train internal personnel to deliver the training (p-value = .021)
Though all-sized companies consider the opportunity to train internal personnel highly valuable,
companies who make more than $100 million a year consider it a slightly more important selection
criteria. Perhaps larger companies who have a greater number of employees practice in-house
training to a higher degree and therefore appreciate the option to have service providers train internal
personnel.

11.  Provider’s organizational capability (p-value = .031)
Results demonstrate that large companies place greater value on a training provider’s
organizational capabilities. Only 33.9% of small companies and 34% of medium companies consider
the service provider’s organizational capabilities to be important, while nearly half (49.6%) of large
companies considered it an important decision criteria. Thus, a training provider hoping to attract a
large client should accentuate examples of their organizational capabilities.
Department
 The size of the company, measured by annual revenue (p-value = .037)

13. Chi-Squared and ANOVA results show that the mean difference between Human Resources and
the other two departments (Learning and Development and Sales & Marketing) is significant at the
5% level. According to these results, the majority of the HR department (83.4%) places some degree
of importance on size of the training provider, so smaller service providers would have a better
opportunity of being selected when purchasing is done through the other two departments.
 Cost (p-value = .039)
Though cost is not an important deciding factor, Human Resources considers it far greater than
other departments. This study hypothesizes that since the Learning & Development and Sales &
Marketing departments’ goal is to increase the financial strength and competitive advantage of a
company, they are willing to spend more on innovative and competent service providers.

14.  Competence (p-value = .040)
These results prove that the L&D department value supplier competence greater than the
other two purchasing departments. A majority of 76.4% of the L&D department considers
competence to be the most to third most important decision factor in procuring a professional service
provider.
Position
 Cost (p-value = .031)

15. The results show a significant difference between the cost ratings of directors and consultants
and trainers and assistants. Data suggests that those higher up the corporate ladder care less about
cost. This is perhaps because directors have greater agency and care more about the holistic
strength of the company and are willing to pay additional funds to competent service providers who
add to the value of their business.
Industry
No significant associations were found for “Industry” because data was collected from a wide
range of industries. Since this study wanted to find the best purchasing process across a broad scope
of enterprises, different industries could not be collapsed together. Had the focus been on a single
industry, much more associations in the selection criteria would have been found.
Conclusion
By providing an analysis of the selection of decision criteria shaped by firms’ demographic
differences, this research benefits both the buyer of organizational services and the supplier. Aside
from presenting service providers with a more holistic understanding of what their customers need,
the distinguishing factor between pre-qualifiers and final-stage differentiators will allow them to be
aware of where they need to excel in order to remain competitive. Training providers can now

16. customize their bid based on what client they want and who is doing the purchasing. In addition,
buyers of said professional services can minimize cost to a growing portion of their company’s
structure while providing a more efficient way of doing business.

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