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B2B Buyer Behavior | 2012


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B2B Buyer Behavior | 2012

  1. 1. 1 The 2012 B2B Buyer Landscape: New Challenges, New Complexity The 2012 New Challenges, New Complexity B2B Buyer Behavior R E S E A R C H Sponsored by Survey:
  2. 2. 2 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Today’s B2B buyers continue to investigate more research sources, involve more stakeholders and take more time to make their purchasing decisions than ever before. It’s a trend with major implications for sales and marketing professionals – especially when a surprisingly large number of buyers say they are dissatisfied with their purchasing experiences. These are some of the major findings of the third annual Inside The Mind Of The B2B Buyer Survey, conducted by Demand Gen Report and sponsored by Act-On Software. The 2012 survey, which polled more than 170 B2B buyers involved in the purchase of a solution during the past year, revealed several noteworthy trends: The following report will explore these and other findings from the 2012 survey. It will also explain why some trends uncovered in the study, including the growing length and complexity of the B2B sales process, support a growing need for marketing automation technology, and for the business processes and content required to support a marketing automation strategy. • The number of respondents who said they were dissatisfied with their B2B buying experience jumped by 50% over 2011, suggesting a serious gap between buyer expectations and vendor performance; • The number of buyers who say they now use a wider variety of sources to research purchases also increased by 50% over 2011; • Buyers who say they involve more team members in the buying process jumped by 67% over the 2011 study; • The number of buyers who said they spent more time researching B2B purchases increased by 15% over 2011.
  3. 3. 3 The 2012 B2B Buyer Landscape: New Challenges, New Complexity According to the survey, B2B buyers are adopting increasingly complex decision-making processes that require them to find, share and evaluate more information than ever before. In fact, this trend is noticeable across the board, based on a comparison of the 2012 and 2011 survey results: • 67% of buyers say they are using a wider variety of sources to research their vendor options – versus 47% of the buyers surveyed in 2011; • 55% say they spend more time researching purchases than they did in the past – compared to 47% of the buyers surveyed in 2011; • 50% allow more internal team members to provide input into the decision-making process – compared to 30% of the buyers surveyed in 2011; • 45% conduct more detailed cost/ROI analyses – versus 34% of the buyers surveyed in 2011; • Just 9% say they involve fewer team members in their B2B buying decisions – compared to 17% in 2011. While half of the respondents said they involved one to three people in their most recent B2B purchase, more than 38% said they involved between four and seven people, and nearly 12% involved more than eight people in the purchase. The vast majority (76%) of respondents said C-level executives were involved in the decision, more than two-thirds (69%) involved marketing, and at least 30% of the respondents said they involved finance, IT, operations and/or sales teams in the buying process. “These findings are consistent with the trend of longer sales cycles that most B2B organizations are facing,” said Andrew Gaffney, Publisher of Demand Gen Report. “However, they also provide deeper insights into where pipelines may be getting clogged. Companies that use the right automated tools to track the digital behavior of their prospects have seen improved deal velocity; they are able to see changing influences on buying behavior.” The Big Picture: A Longer, More Complex Buying Process Used a wider variety of sources to research options Spent more time researching this purchase than previous purchases More internal team members provided their input into decision process Did more detailed analysis of costs/ROI of solution before making a final decision Spent more time on social media to research possible solutions Fewer internal team members provided their input into decision process Relied more on live customer feedback/recommendations How would you say the decision-making process changed for your most recent purchase versus previous purchases in recent years? 66% 48% 38% 30% 20% 19% 9% 50% 38% 7% 5%How many people were involved in the purchase process? 1-3 4-7 8-10 11+ (Please check all that apply)
  4. 4. 4 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Perhaps the most surprising finding in the 2012 study, however, was a sharp increase in the number of respondents who said they were not satisfied with their B2B buying experience. When asked to rate the overall experience of their most recent B2B purchase on a scale of 1 to 5 (with 1 being most positive), buyers responded with an average rating of just 3.34 – and nearly 56% of all buyers surveyed rated their experience with a less-satisfied “4” or “5” rating. Our 2011 study, by comparison, found that 36% of the buyers surveyed were dissatisfied with their experience. “The fact that buyers are increasingly dissatisfied with the engagement process is one of the most eye-opening statistics from the survey,” Gaffney said. “Despite all of the tools available – CRM, web analytics and marketing automation – this shows that marketing and sales teams are still struggling to keep pace with the changing expectations of buyers. This also underscores that those firms that can transform their engagement models rapidly will have a decided advantage over their competitors.” What explains this growing dissatisfaction on the part of buyers? There are a number of contributing factors, all of which will be discussed below. In general, however, it is clear that buyers are taking longer to make decisions; at the same time, the decision-making process is increasingly complex and often involves more people. If marketers fail to adapt the tools and techniques required to give these buyers the content they need to make decisions – and to communicate with them in an appropriate manner, often over an extended period – then they risk failing to meet a buyer’s expectations. B2B Buyers Give Vendors Mixed Reviews Please rate the overall experience of your last purchase from 1-5, with 1 being the most positive. 4 3 2 1 48% 23% 12% 9% 8% 5 “The fact that buyers are increasingly dissatisfied with the engagement process is one of the most eye- opening statistics from the survey. Despite all of the tools available – CRM, web analytics and marketing automation – this shows that marketing and sales teams are still struggling to keep pace with the changing expectations of buyers.” - Andrew Gaffney Publisher Demand Gen Report
  5. 5. 5 The 2012 B2B Buyer Landscape: New Challenges, New Complexity One way to gain insights about this satisfaction gap is to ask buyers which factors they consider most important when selecting a vendor.According to the 2012 survey, two responses were overwhelmingly popular: • 53% said that the relevance of the information a company provided was very important; and • 57% of the respondents ranked the timeliness of a vendor’s response to their questions/inquiries as very important. The amount of content/thought leadership a company provided was also important to buyers, as were recommendations from colleagues at companies similar to their own. The prominent role played by relevant content, timely responses and insightful thought leadership all point to the vital role that marketing organizations play in shaping a buyer’s impressions of a brand – either directly (via content and campaign activity) or indirectly (via alignment with sales). These findings also suggest that sales and marketing organizations need to adopt tools and techniques that identify buying signals as they occur, and that allow organizations to engage with buyers in a timely manner. “All of the findings point to a greater reliance on marketing for the early stages of engagement in the B2B buying cycle,” Gaffney said.“Because buyers are engaging with a sales representative later in the process, the content and messaging a brand delivers really shapes the initial perception of a brand and can have a defining impression on brand preference.” Relevant, Timely Information Plays A Critical Role Timeliness of their response to questions/inquiries Relevance of the information the company provided based on my questions The amount of content/thought leadership the company provided to support our research The company’s involvement as a thought leader in industry online communities, blogs, etc. Recommendations/references from companies similar to mine Ranking from industry trade publications/press Positioning and presence at industry conferences/ trade shows 5.05 5.22 4.33 3.85 4.07 3.34 2.15 (Respondents were asked to rank from 1-7 in importance.The statistics below reflect the average rating.) Once you decided to research solution providers, how important were the following factors in selecting the provider you ultimately chose to work with?
  6. 6. 6 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Budgeting for B2B purchases has also shifted significantly in favor of firms completing purchases that were initially unbudgeted, but that were deemed necessary after looking at a solution’s impact on other adopters and building an internal business case for the solution. In 2011, just 11% of the respondents to the B2B Buyer Survey reported making their most recent solution purchase in this manner; in 2012 that number jumped to 48%. While there may be a number of factors contributing to this budget allocation trend, such a shift has major implications for B2B marketers: • First, it demonstrates yet again that B2B buyers are taking more time and involving more decision-makers in the buying process. • It also suggests that buyers will require more content designed to build a business case and to demonstrate ROI for a particular product or solution – a trend borne out by other findings in this year’s study. B2B Buyers Report More Unbudgeted Purchases The project was initially allocated after we determined the solution’s potential impact by looking at other adopters and building an internal business case for it. Budget for project was pre-approved and allocated at the beginning of the year Budget was allocated as part of a larger line item once need was established and ROI was clearly demonstrated Budget was determined after soliciting multiple bids 48% 23% 15% 14% How would you describe the budgeting/approval process for this recent solution purchase? Does Social Media Really Matter To B2B Buyers? Is social media truly an essential part of the B2B buying process? Previous B2B Buyer surveys offered a mixed bag of answers to this question; while 65% of buyers in 2010 said they used social media during the purchase process, just 35% of the buyers surveyed in 2011 said they did so. This year, 72% of our respondents said they used social media to research their solution purchase. The difference, however, is that this year’s survey offered a number of specific social media activities for respondents to choose. As a result, while more than 53% said they followed group discussions to learn more about business solutions, just 14% said they connected directly with solution providers over social networking channels. One conclusion is that social media does play a critical role in the purchasing process, even though most buyers avoid direct contact with vendors over social media. This suggests that B2B marketers must adopt sophisticated strategies for monitoring social media conversations and tracking buyer behavior – even when they don’t necessarily make direct contact with buyers. When asked which social media sources they found most influential, blogs and LinkedIn stood out, with influence scores (on a 1-7 scale) of 5.29 and 5.28, respectively. SlideShare and YouTube/video content also did well, while Twitter, Facebook and Pinterest showed low to moderate levels of influence. Followed group discussions/conversations/ threads to learn more about the topic How did you use social media to research your solution purchase? (Please check all that apply) Posted questions to social media asking how others solved a similar business challenge Connected individually with thought leaders in the space through social networks I did not use social media Connected directly with potential solution providers via social networking channels 54% 28% 24% 22% 14%
  7. 7. 7 The 2012 B2B Buyer Landscape: New Challenges, New Complexity As noted previously, B2B buyers continue to push back their initial point of contact with vendors – including the vendors they finally select. In the 2011 B2B Buyer Survey, 22% of respondents said they interacted with a contact from a solution provider almost immediately, as soon as they started their initial research. In the 2012 survey, that number dropped to just 6%. ➤➤ At the same time, the number of respondents initiating contact with a vendor only after compiling a short list of candidates jumped from 24% to 51%. ➤➤ While buyers are waiting longer before initiating direct contact with vendors, this trend hasn’t cut the number of contacts they have with a solution provider. In fact, more than a third of respondents (35%) reported at least four contacts (via sales calls, email or other methods) with the winning vendor, and 31% said they had eight or more contacts. “These findings really validate the critical role that multi-touch lead nurturing campaigns are playing in the buying process,” Gaffney said. “Buyers expect to be contacted multiple times by solution providers, but they also expect that those touches be relevant to their current information needs. If they have already engaged with a brand and attended three of their webinars, they don’t expect (or appreciate) messaging that treats them like a new prospect. Relevance is really becoming table stakes, and the ability to guide and accelerate the buying process is critical.” Vendors Get Mixed Reviews On Their Contact Choices After establishing a preferred list of vendors At what point did you interact with a contact from the solution provider? After conducting initial research on options When we put out RFPs Other When we were ready to negotiate terms Immediately when research began 51% 28% 8% 6% 5% 2% How many times did the winning vendor contact you vial sales calls, email or other methods before you made a final decision? 4-7 1-3 8-10 11+ 35% 34% 17% 14%
  8. 8. 8 The 2012 B2B Buyer Landscape: New Challenges, New Complexity ➤➤ A related question is whether buyers are satisfied with vendors’ choices about how and when to contact them.This year’s survey reported mixed results on this question:While 59% of buyers said their vendors did a good job of maintaining appropriate contacts, 33% said vendors did only a fair job at this task, and another 8% said vendors did a poor job. ➤➤ The fact that 4 out of 10 buyers rated their vendors as “fair” or “poor” on this count could be another contributing factor to the relatively low vendor-satisfaction ratings the survey uncovered. It also suggests that vendors need to invest in solutions that give them greater control over how, when and why they contact potential buyers. “These stats speak to the challenges most B2B marketers face when creating lead nurturing campaigns. Knowing when to communicate and what to say is crucial to building trust with your buyers,” said Atri Chatterjee, CMO at Act-On Software. “Today’s marketing automation platforms are so sophisticated that marketers can run highly targeted nurturing campaigns based on a buyer’s online behavior.” One point where buyers appear not to have a problem is with the quantity of content vendors provide: More than 87% said they are satisfied that vendors provide ample content to guide them through the decision-making process. How would you describe the vendors’ choices about how and when to contact you? Good: their contacts were appropriate and helpful Fair: they could have adjusted their contact frequency to reflect my needs more efficiently Poor: I was contacted more times than necessary 59% 33% 8% Did you feel like the solution provider you chose provided ample content to help you through each stage of your research and decision-making? No Yes87% 13%
  9. 9. 9 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Not surprisingly, buyers begin their vendor search process with a wide range of research tactics, including web searches, visits to vendor web sites, downloaded white papers, and social media or peer reviews. A majority of buyers use these tools as part of an informal research process where they gather information related to a specific business challenge. Many buyers place a special emphasis on industry-specific articles and research during their initial search process, while a smaller but still significant number seek out case studies involving companies similar to their own. Buyers Favor Industry-Specific Content At the start of your search process, what marketing/media channels influenced your selection of solution providers in this purchase? (Please check all that apply) Web search 78% Vendor web site Social media/peer reviews Responded to an email offer Downloaded white paper Attended an industry event Responding to direct contact from a sales rep 19% 21% 30% 50% 55% 78% How did you initiate your information gathering process? 54% 27% 12% 8% Started with informal research/information gathering around a business challenge Conducted anonymous research of a select group of vendors via their web sites and other public information Engaged with peers who had addressed a similar challenge and learned more about the solutions/processes they used Followed industry conversations/coverage of the topic and used that knowledge to engage with one or more potential solution providers 45% 13% 15% 27% Articles and resources targeted to my industry Case study examples of other companies similar to mine Made relevant professional connection with others who operate in m industry and/or could help with my search process (e.g. connecting on LinkedIn) Research briefs What particular types of information did you seek out in your initial search?
  10. 10. 10 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Virtually all B2B buyers (94%) view multiple pieces of content from the vendor they ultimately select.While this is not surprising, it reinforces the need for vendors to develop coherent content marketing strategies. The next step in the buying process, according to nearly half (43%) of respondents, is to develop a short list of potential vendors to discuss internally, while 36% say their next step is to build a business case for the vendor’s product or service (and, presumably, to carve out budget for the purchase). Both of these likely next steps indicate that B2B buyers now go through an extended, and largely internal, decision-making process before they need – or want – closer engagement with vendors. They also illustrate the role that a sophisticated lead nurturing program can play in ensuring that B2B buyers get appropriate content as exactly the right point in the vendor evaluation process. After you began your initial search, what was your next step? 43% Developed a short list of potential solutions or services to discuss internally Collected initial information and resources to build the business case/need Looped in relevant internal stakeholders Initiated budgeting discussions internally 36% 15% 6% 94% 6% Did you view multiple pieces of content from the vendor you ultimately selected? No Yes
  11. 11. 11 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Buyers were also asked to comment specifically on their impressions of their chosen vendors’ web sites – still the first (and often only) stop for content and research tools. According to the survey: • Buyers were most likely to cite both the breadth of relevant product information and the educational value of that information as the most compelling elements of their chosen vendor’s web site; • More than half (51%) said they did not have to log in to access a vendor’s content, and 29% said they were required to provide information only once, even if accessing multiple pieces of content; and • A large majority (73%) said they aren’t interested in using social sign-in tools to access content. The second and third points here both illustrate a single conclusion: Buyers are inherently (and perhaps increasingly) hostile to any form of gating on a vendor web site, whether or not it involves social sign-in or other usability improvements. This suggests that vendors must be especially careful in terms of when to gate content and what information to request when content is gated. Web Site Content: Relevance, Diversity Are Important How did you access content provided by the vendor?What did you find to be the most compelling element of your chosen vendor’s web site? Breadth of product information as it related to my search Valuable educational content (e.g. industry-relevant white papers) Relevance of individual content (e.g. presented by role or vertical) Design aesthetic (easy to navigate and access information) 30% 29% 19% 14% 8% Interactive info (i.e. customer success videos) 51% 29% 15% 5% I did not have to log in to access the vendor’s content I logged in once (name, email, company) and was not required to thereafter I was able to use social sign-in to access content I was required to login each time
  12. 12. 12 The 2012 B2B Buyer Landscape: New Challenges, New Complexity “Understanding B2B buyers’ behavior and their information consumption is crucial to nurturing a successful partnership,” said Chatterjee. “Making sure content is easily accessible, relevant and delivered with the least number of gating features will benefit your business in the long run. Today’s online marketing tools employ sophisticated techniques to streamline the lead form submission process by pre-populating data capture fields and requiring the visitor to fill out a form only once to download multiple assets. These minor adjustments to your lead generation program can have a big positive impact on your results.” Would you prefer the option to use social sign-in to access content? 73% No Yes 27% Selected B2B Buyer Comments As part of this year's survey, Demand Gen Report asked respondents to provide optional comments on their vendor experiences. Several of these comments expressed often- repeated sentiments that offer some insights into why buyers are dissatisfied with the vendors they work with. Several buyers expressed dissatisfaction with the late-stage buying process. "The original quote was ridiculous," noted one respondent. "The final price was less than half of the original price…the process felt a little sleazy." Others reflected dissatisfaction with the type of content available from vendors: "Availability of a free trial or test environment would have been very helpful," stated one buyer, while another noted "If I am buying a product… all the thought leadership in the world is irrelevant if I cannot get to product-level information. If I cannot get this information, you are often off my list very fast and may never come on again." Another commenter echoed the previous sentiment: "More product detail on websites is essential for a B2B buyer." Finally one commenter summed up a number of other complaints about sales calls that were either inappropriate or simply too aggressive. “Stop all the phone calls and worthless emails from the sales reps,” the commenter said. “If and when I’m really interested…I’ll reach out to you. Don’t HOUND me or my team.”
  13. 13. 13 The 2012 B2B Buyer Landscape: New Challenges, New Complexity This year’s study also looked at the specific impact of late-stage content on B2B buyer decisions. In this area, a few key conclusions stood out: • More than 72% of buyers cited tools designed to support the business case for a purchase as having a significant impact; • Nearly 63% said case studies played a role in moving them towards a final choice, although significant numbers also cited checklists/guides (47%), analyst reports (45%) and ROI calculators (34%). • Online demos (cited by 69%) and free trials (42%) were the most commonly cited pieces of content used to make a final vendor decision. Demos, Comparison Content Drive Late-Stage Decisions How did the solution provider help you through your decision- making process? (Please check all that apply) 72%Provided tools to support the business case for my purchase Brought in high-level executives to share thought leadership expertise Invited me/my team to an industry event or analyst webinar Other 34% 34% 17% After you moved past the initial search phase, what information did you seek out as you started to consider specific solution providers? (Please check all that apply) 63%Case study examples Action-oriented checklists or guides Analyst reports ROI calculators 47% 45% 34% “B2B buyers clearly want to test drive solutions before they commit to integrating them into their business. Those organizations that help prospects get comfortable seeing how a solution works in their own environment have a much better chance of winning a long- term customer.” - Andrew Gaffney Publisher Demand Gen Report
  14. 14. 14 The 2012 B2B Buyer Landscape: New Challenges, New Complexity “B2B buyers clearly want to test drive solutions before they commit to integrating them into their business,” said Gaffney. “This is especially true in enterprise software, but is also becoming the case with services businesses as well. Those organizations that help prospects get comfortable seeing how a solution works in their own environment have a much better chance of winning a long-term customer.” Finally, when asked what was generally missing from solution provider web sites, a plurality of buyers (37%) cited issues with the relevance of the content they viewed, in terms of criteria like job role or industry vertical. Smaller but still significant numbers cited a lack of breadth in content and a lack of high-quality educational content as problems. Which types of content were most helpful in finalizing your vendor decision? Online demos Free products/free trials Assessment tools ROI calculators Video testimonials N/A 69% 15% 26% 40% 42% 9% (Please check all that apply) 37% Relevance of individualized content (i.e. presented by role or vertical) 20%Valuable educational content (e.g. industry relevant white papers) 19% 14% 11% Breadth of product information as it related to my search Interactive info (e.g. customer success videos) Design aesthetic (easy to navigate and access information) Looking back on your entire purchase experience, what would you say was generally missing from the solution providers whose web sites you visited?
  15. 15. 15 The 2012 B2B Buyer Landscape: New Challenges, New Complexity Based on current research, it is possible that today’s shifting B2B marketing landscape may soon settle into a more stable environment. Most buyers now engage with vendors late in the selection process and involve multiple stakeholders in decisions; most also require multiple touches, and exposure to multiple content assets, in order to select a final vendor. The challenges, then, involve what vendors can do to improve buyer satisfaction, deliver quality content to the right decision-makers at the right time, and maintain contact without coming across as overbearing. These challenges are particularly important, given that a growing number of buyers say they are not satisfied with their experiences. Many B2B marketers now agree that marketing automation – when combined with quality content and good sales/marketing alignment – provides an effective solution to these issues. Marketing automation enables complex, long-term lead nurturing campaigns; it also allows marketers to segment their prospects and deliver targeted, highly relevant content. In the process, marketing automation could help B2B marketers overcome the dissatisfaction many buyers report during their dealings with vendors. About The Survey The 2012 “Inside The Mind Of the B2B Buyer” Survey includes responses from more than 170 respondents actively involved in purchasing a business solution within the last 12 months. Of these respondents 29% described their role in the process as a “recommender,” developing project guidelines and selection criteria. Another 36% described themselves as “influencers,” helping to develop the business need for a solution; 25% described themselves as the final decision- makers for a purchase; and 10% said their main role was to approve or allocate the budget for a purchase. Most of the respondents (63%) reported annual company revenue of less than $25 million, while 26% reported revenue of $25-$250 million. Approximately 5% reported revenue of $250-$500 million, and 7% reported revenue of greater than $500 million. Conclusion: The Road Ahead For B2B Marketers Influencer (helped develop the need) Recommender (developed project guidelines/vender selection criteria) Decision maker (made final decision) Was not directly involved in the purchase of a B2B solution during the past 12 months Buyer (approved/allocated budget) 30% 25% 21% 15% 9% What role did you play in the purchase of a B2B solution (i.e. software, professional services, technology) in the last 12 months? Please describe your company’s annual revenue: Under $25 milllion $500 million to $1 billion $250 million to $500 million More than $1 Billion $25 million to $250 million 63% 26% 6% 5% 1%
  16. 16. 16 The 2012 B2B Buyer Landscape: New Challenges, New Complexity About DemandGen Report 411 State Rt. 17 South, Suite 410 Hasbrouck Heights, NJ 07604 P: 201.257.8528 F: 201.257.5281 About Demand Gen Report Demand Gen Report is a targeted e-media publication spotlighting the strategies and solutions that help companies better align their sales and marketing organizations, and ultimately, drive growth. A key component of the publication’s editorial coverage focuses on the sales and marketing automation tools that enable companies to better measure and manage their multi-channel demand generation efforts. About Act-On Software Act-On Software provides marketing automation for the Fortune 5,000,000. We give small and mid-sized businesses the ability to do sophisticated, multi-channel marketing, via a simple yet powerful package of integrated capabilities. Our customers increase their revenue, reduce their cost of customer acquisition, and interact with their prospects and customers using online capabilities including email, the web and social media. Until now, these capacities were available only to large enterprises spending hundreds of thousands of dollars in software and resources; Act-On has changed all that by levelling the playing field.With a relentless focus on customer success and continuous innovation,Act-On today is the fastest-growing marketing automation company in the industry. Headquarters 8405 SW Nimbus Ave, Suite E Beaverton, Oregon 97005 +1 (877) 530 1555 International: +91 80 4098-5338