Why no-one ever got fired for buying IBM

Dale Carnegie once wrote, “When dealing with people, remember you are not dealing with creatures of logic, but with creatures of emotion.”

Most would agree that the environment of information overload that we all work within can lead us to a greater amount of emotional decision making. Human brain research has suggested that, as our minds have more to process, the likelihood to decide emotionally increases. 

Intellectually we know that emotion can have enormous relevance when it comes to business to business decision making, but just how much relevance?

In the workplace making a bad decision could be costly, including the loss of your job and reputation. As a consequence, one would expect decision-making to be far more rational than our choice of dishwashing liquid in the supermarket. But is it and what role do emotions play?

Decision makers, especially when risk and spend are high, would claim that they look at many things beyond price when choosing a supplier or services. For example they should consider “product performance”, ‘features, “reliability”, “availability” and more.

However, when you investigate to what extent decision makers will change brands in their search for a better price, or a better performing product, the reality is that most people stick to the same supplier or product over time. It is unlikely that no other providers have offers that are better in terms of performance, price or better availability. What could be happening here?

In purchasing decisions within a B2B context we cannot underestimate the importance of less tangible factors such as the brand or reputation. 

The suppliers’ company name and logo carries considerable weight with decision makers as is the importance of trust & reputation of the brand to deliver against its promise.

People who have used a brand or a supplier for years know that product and take comfort in the security of the relationship and feeling safe – why reinvent the wheel right? The old saying “nobody ever got fired for buying IBM” arose because the huge brand equity of IBM reduced the fear, uncertainty and doubt that may come from buying a less well-known brand.

Business to business decision makers (usually) can’t afford to bet the farm. They’d be very brave and possibly foolish to choose a supplier they’d never heard of or didn’t know, who was promising the earth. But what is the true cost to a business when ignoring options that challenge the status quo of the relationship with the current brand or supplier? How do you address the fear, the uncertainty and the doubts of buying a less well-known brand that is offering more and may be a better option?

B2B International, a market research firm specialising in researching business-to-business markets, determined the degree to which emotions drive B2B decision making by asking decision makers what they look for when choosing a brand. They used trade-off techniques to work out what is most and least important. Decision makers were given 100 points to spend across an array of factors (which include brand and reputation). They discovered that brand seldom attracted a significant proportion of the points spent. Most points are allocated to the tangible factors of price, availability, delivery, product performance, technical service etc. The soft factors, the emotional ones, receive few points in a deliberate intellectual trade-off exercise.

Real buying isn’t like that.

Most business to business decisions involve a mix of people deciding within a framework that measures the amount of money to be spent versus the value & strategic importance of that purchase.

Emotions are an instinctive response to a situation and are based on a range of inputs including advertising, communications and experience. Perceptions that drive emotions come from anecdotes that people pick up from the media or from word of mouth. Therefore, a business to business buyer investigating new products and services will always start with an intuitive prejudice which favours certain brands.

Through their research B2B International found that in business to business markets emotions could account for a good 50% of the buying decision.

“We know that emotions are of huge importance, not from asking direct questions about how decisions are made, but by asking questions about the behavior of the decision maker.

A decision maker that returns again and again to the same brand and yet claims that they are influenced by price, quality and availability, is in effect telling us that they are acting emotionally.”

This clearly demonstrates that they feel safer buying the same product because, if price, quality and availability were the most critical drivers, there would have obviously been other brands that could have fulfilled their claimed requirements.

The needs of the individual choosing the brand as well as the company for which that person works for is another complex but critical factor to consider in that decision-making process. The individual buyer may claim that their choice is rational because it helps them do their job better than any other brand, however, a hidden emotional driver may be that the decision makes the individual look good to his company and to management.

This is also something that they won’t or can’t admit to on a conscious level.

Equally, a softer, more emotional need of the company may be that it derives value from knowing that it has “Intel inside” or it is an ‘IBM shop” or “we went with SAP”; the company has purchased a brand which gives security and possibly adds endorsement to their own brand even if it does not benefit from the best products available.

Rational and Emotional B2B Buyer Needs by B2B International

The question for salespeople is not if emotions affect business to business buying decisions, but how much of a part do emotions play in those decisions?

No longer is it safe to assume that B2B purchasing decisions are purely based on logic alone.

You must appeal to the right emotions too. This must be done while clearly and simply demonstrating the benefits, proven results and value for money.