Business Market Segment: Decision Maker Characteristics 1

Selecting the best business market segment for your B2B business includes segmenting purchasing decision makers as well businesses.

Although you are selling to businesses, it’s people that make purchasing decisions and it’s people that you have to build and maintain mutually beneficial relationships with.

Former posts and my recent article on selecting a business market segment have dealt with organizational, product and past purchasing characteristics. This post takes a different look at your business customers and target market by concentrating on the people that actually decide to, or not to, purchase your B2B products or services.

It includes three main categories of decision maker characteristics:

• Business Market Segment Based On Purchasing Function
• Business Market Segment Based On Risk Acceptance
• Business Market Segment Based On Personal Characteristics

Business Market Segment Based On Purchasing Function

The business culture is a major influence on the purchasing function and all purchasing decision makers. It specifies the roles of purchasing decision makers and determines how much freedom and responsibility they actually have in purchasing decisions.

For instance, some business cultures require working with a select few vendors that have a long-term relationship with the business. In that culture, the only real choices that decision makers have is which long-term vendor to use for a particular product or service. In this culture, purchasing from a new supplier is risky for the decision maker, and, thus generally avoided.

Other business cultures encourage purchasing decision makers to constantly be on the look out for new vendors, new products, new services that can better meet the business’ needs or save the business time and money. In this culture, purchasing decision makers have far more freedom in purchasing decisions and take less risk when they do so. In fact, they may be rewarded for finding new solutions to the business’ challenges.

Thus, the roles of decision makers in these each business market segment are very different as are the number of decision makers in the purchasing unit. If all purchasing does is complete paper work for the same orders over and over, it takes fewer people. But if the purchasing department is responsible for finding new vendors, products and services, it needs many more people.

Business Market Segment Based On Risk Acceptance

I spoke to risk above, relating it to the business culture, but risk is also a personal characteristic. Some people are naturally risk takers while others are risk avoiders.

Ideally the risk takers will be in the business culture that encourages new solutions and the risk avoiders will be in the business culture that basically requires just ordering the same items frm the same B2B vendors again and again. But, unfornately this is not always the case.

Thus, you need to know the person as well as the business. You may know that the business culture welcomes new vendors, but if your purchasing contact in the business is risk averse, you’ll have a hard time getting a purchase from the business.

Seniority of decision makers also influence a decision makers’ risk tolerance, but differs by two distinct business culture. In a business that values seniority and past accomplishments, a high seniority decision maker can take more purchasing risks than a newer one. In a business culture that values youth and new blood more than seniority, the opposite will be true.

Thus the first thing you have to consider when analyzing the best business market segment based on decision makers is risk tolerance and the how business culture and personal characteristics influence it.

Tomorrow’s post will cover personal characteristics that influence purchasing characteristics and your selection of your best business market segment.

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