Application: Sales, Marketing Communications, Strategy

Figure O.1: A representation of the broad (very broad) stages in organizational buying


The Concept

One of the main differences between organizational buying and consumer buying is the more formal recognition of the role of different individuals in the business DMU. This affects the sales cycle because the sales team needs to talk to and nurture more people (see separate entry under sales); and governance rules in Western companies seem to be increasing this method of buying. For their article in the Harvard Business Review two researchers (Trailer, B. and Dickie, J., 2006) surveyed over 1,200 companies. They found that the individual “economic decision maker” was being replaced by: “committees and multiple layers of approval, all equally important to the decision to move ahead. This is partly why the length of the average sales cycle keeps increasing.” They found that companies reporting a sales cycle of seven months or more had climbed from 18% in their previous surveys to over 25% and those under three months had dropped from 50% to under 42%. Suppliers have to become knowledgeable about the roles of these different people, the weight given to different purchase criteria, and the sources of ...

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