B2B Buying Process: How Businesses Purchase B2B Services and Software
By Grayson Kemper
Content & Editorial Manager, Clutch
February 26, 2020
Businesses rely heavily on vendor resources to make B2B buying decisions. Ultimately, the amount of time, number of people, and resources impact how business buyers hire a business service provider or invest in software.
The B2B buying process is exceedingly difficult for businesses.
According to Harvard Business School, businesses consider 40 "elements of value" when hiring a business service provider or investing in software, including how B2B buying impacts businesses’ operations and productivity and employees’ personal lives.
What's more, businesses exist in an information economy flooded with resources they can reference to make a purchasing decision.
Clutch surveyed 451 employees who were involved in their businesses’ decision to hire a business services provider or invest in software in the past 12 months. The survey explored how businesses make critical decisions during the buying process at each stage of the B2B sales funnel:
· Researching information about the B2B companies most relevant to a business’s needs
· Evaluating B2B companies to create a shortlist that best aligns with a business’s needs
· Quoting and comparing prices of select B2B companies to determine budget fit
· Communicating and negotiating terms of partnership with representatives of B2B companies
· Signing off on final agreements to hire a B2B company
For B2B services and software companies, our findings demonstrate the importance of proactively instilling trust with business buyers though:
· Using their sales representatives
· Building a consistent brand profile online
· Creating helpful resources to help businesses make a purchasing decision
How Much Time Does a B2B Buying Process Take?
· Researching and gathering information takes the longest relative to other stages of the buying process.
· Businesses spend less time in each stage of the buying process as they progress toward purchasing.
Who At a Business Is Involved in the B2B Buying Process?
· Most businesses rely on groups of younger, digital-savvy employees to research and evaluate B2B companies.
· Making final decisions is centralized with individual or small groups of older employees.
· Businesses rely on more people to hire a business services provider than to invest in software.
Which Resources Do Businesses Rely on During a B2B Buying Process?
· Businesses rely on recommendations or referrals for gathering information about and evaluating business services but turn to vendor resources such as a company website or sales representative later in the purchasing process.
· On the other hand, businesses rely on vendor resources the most when investing in software, especially company websites.
What Do Businesses Think is Most Important About B2B Company Websites and Online Reviews?
· Nearly all businesses have used an on online review to help make a B2B purchasing decision and are most likely to encounter reviews on company websites.
· Transparent information about cost on a B2B company's website is most important for business buyers.
· The validity of an online review — how reputable the source of the review – is most important for business buyers.
Businesses Spend the Most Time Researching in the B2B Buying Process
Businesses spend the most time during the B2B buying process researching and gathering information about business services and software companies. As they close in on a purchase, businesses spend less time at each stage.
· Businesses spend the most time at the top of the B2B sales funnel: More than half spend at least one month researching and evaluating business services (52%) and software (51%).
· On the other hand, businesses act quickly when making closing a B2B buying process: More than half spend one week or less making a final decision about hiring a business service provider (52%) or investing in software (57%).
· For most businesses, it takes the same time to hire a business service provider (70%) or invest in software (75%) compared to previous experiences.
Formerly, B2B purchases were mapped based on the sales funnel — with prospects following a linear path starting with learning about a B2B company and ending with purchasing.
Businesses now jump more fluidly between stages of the sales funnel as the B2B buying process moves online, though.
When businesses research B2B companies, for example, there often isn’t one specific thing they want to learn. Instead, they may want to understand a market, determine their exact needs, or estimate the approximate cost of a B2B purchase — all at once.
Businesses collect and compare this information across multiple companies, which adds to their time commitment.
“Typically, in the initial stages of a purchasing process, knowledge of the products/services in that industry is lesser,” said Karthik Sridharan, founder of Remote.Tools, a community platform for remote tech tools. “[Businesses] need more time to understand the metrics of comparison — is it a particular feature, price, customer support, etc.?”
Due to the scope of their research, businesses spend the most time researching and evaluating services and software compared to comparing prices, negotiating, or making a final decision about a B2B company. More than half of businesses spend one month or more researching and evaluating business services providers (52%) or software (51%).
Oppositely, businesses spend far less time making a final decision about a B2B purchase: Over half of businesses spend one week or less making a final decision about hiring a business service provider (52%) or investing in software (57%).
At the end of the purchasing process, all of the work that goes into identifying, vetting, comparing, and negotiating with B2B companies makes the final decision as simple as a “yes” or “no” from a decision-maker at a company, which requires much less time than researching everything about a B2B company.
Businesses Seek the Most Input During the Initial Stages of a B2B Purchase
Most businesses rely on a small group of people to drive the B2B buying process, especially for investing in software. The number of people involved in investing in business services or software decreases as a company gets closer to making a B2B purchase.
· Four or more people are involved in researching business services (49%) providers and software (41%) in the B2B purchasing process.
· Relying on a single person to make a purchasing decision about services (30%) or software (37%) is relatively common.
· In the past year, the number of people involved in the B2B buying process has not changed much: Two-thirds of businesses (66%) rely on the same number of people to hire a business services provider, while three-fourths (75%) rely on the same number of people to invest in software.
The research and evaluation stages of the B2B purchasing process are the most democratic. For example, nearly half of businesses rely on a group of at least 4 people to research business services.
Making a final decision about a B2B company, though, is centralized. More than 60% of businesses rely on a team of 1-3 people to make a final decision about a B2B company. Many rely on just a single individual.
Making a B2B purchase is a long-term and expensive investment. Businesses often solicit input from all parts of the company to inform their purchase decision.
Greg Fung, North American partner specialist team manager for HubSpot, a marketing software company headquartered in Boston, says the number of people involved at the beginning stages of the B2B buying journey creates pressure on businesses to choose a B2B company that fits the needs of all stakeholders at a business.
"In an increasingly complex B2B world, there are an increasing number of stakeholders to navigate when choosing a vendor," Fung said. "In fact, as the number of impacted stakeholders increase, the energy around the initial stages of purchasing is likely to go up."
"As the number of impacted stakeholders increase, the energy around the initial stages of purchasing is likely to go up." – Greg Fung, HubSpot
For example, when a business hires a web developer to create an e-commerce website, the project can impact the company’s sales, supply chain, network security, marketing, and design teams.
Businesses may enroll people from multiple teams at the beginning of the purchasing process to ensure that they choose a partner that fits the whole company's needs.
Even with input from multiple departments, however, the number of people involved in making purchasing decisions has not changed much compared to businesses’ past experiences:
· Two-thirds of businesses (66%) rely on the same number of people to hire a business services provider.
· Three-fourths of businesses (75%) rely on the same number of people to invest in software.
The demographics of business buyers, though, may have shifted.
Young Employees are the Most Responsible For Initial Stages of B2B Purchases
Younger employees are the most involved at the beginning of B2B buying process. During these stages, businesses’ actions reflect younger generations’ preferences for collaboration and using digital resources to inform purchasing decisions.
· More than half of business buyers under age 35 (57%) are responsible for researching and evaluating software, while 42% are responsible for researching and evaluating business services.
· Very few buyers responsible for signing off on final agreements to invest in software (12%) or hire business services (14%) are under age 35.
Research suggests that younger employees are increasingly involved in making B2B purchasing decisions:
· According to r2integrated, “Modern B2B buyers generally belong to the millennial cohort who grew up in digitally-enabled environments.”
· According to LinkedIn, “Millennials are gaining representation on the technology buying committee and holding decision-making power.”
This research suggests that modern B2B buyers are millennials who are comfortable with digital-first environments and value collaboration with peers when making decisions.
Our data demonstrates that younger employees are most likely to be involved in the stages of the B2B buying process that are the most collaborative and leverage digital resources the most: researching information about and evaluating B2B companies.
The people making final decisions about investing in services providers or software, on the other hand, tend to be older.
For example, 86% of people responsible for signing off on final agreements with business service providers are 35 years of age or older.
Millennials contribute to businesses B2B buying decisions, but they share responsibilities with older colleagues.
Businesses Rely Heavily on Vendor Resources to Make a B2B Buying Decision
Businesses reference a mix of digital and legacy sources of information when making a B2B purchasing decision. They still rely heavily on vendor resources such as a company’s website or sales associates, giving B2B companies an opportunity to influence how businesses conduct B2B buying.
· Businesses depend most on recommendations or referrals when gathering information about (55%) and evaluating (53%) business services. For comparing prices (43%) or making a final decision (43%) about a business service provider, businesses refer most to the service providers’ representatives.
· Businesses depend most on software companies' websites for researching (57%), evaluating (50%), and comparing prices of (48%) software.
· The number of resources businesses use to hire a business service provider (30%) and invest in software (26%) has increased over the past year.
Businesses still heavily rely on vendor resources during the B2B purchasing process, especially when it comes to making a final decision.
They also rely on external, third-party resources and content such as:
· Peer reviews and recommendations
· Online reviews
· Search engines
· Industry-specific content (e.g., blogs, whitepapers, market research)
Businesses depend on external resources the most at the top of the B2B sales funnel – the research and evaluation stages.
Buyers do not trust singular information sources to make a buying decision: Our data shows they increasingly reference more resources during the B2B buying process.
As such, B2B companies need to create a consistent digital profile across third-party resources.
“Ensure your brand story, in the form of reviews, ratings, or references, is available in as many forms and across as many sites as is relevant,” said Eric Quanstrom, CMO at Cience, a lead generation company in California.
Businesses’ reliance on both vendor and external resources points to B2B companies’ need to create relevant content and use their sales representatives to build trust in buyers.
“You need to meet your customers where they are,” said Garrett Sussman, head of content for Grade.us, a review management platform. “Some customers want to research, evaluate, and purchase without ever talking to a sales rep. In that case, you need to sell your business with your copy, value, and resources.”
As businesses progress through the B2B buying process, the more they rely on vendor resources such as company websites and sales representatives to inform their purchasing decision.
If the information that buyers encounter through external content is consistent with what they find on a B2B company's website, the more they can trust that company. Trust, in turn, influences if a company ultimately converts on a purchase.
If a B2B company is not transparent or consistent, however, resources such as online reviews and ratings platforms may provide conflicting information that can negatively influence buyers’ opinions.
Businesses Think Transparency About Cost Is Most Important on B2B Companies’ Websites
When reviewing a B2B company’s website, buyers are most concerned about how transparent companies are about the cost of their services or software, reflecting how businesses prioritize trust in the B2B buying process.
· Businesses are most concerned with transparent information about cost (25%) when reviewing a B2B company’s website.
· Buyers also value case studies and testimonials (23%) and access to immediate feedback such as a chatbot (17%).
Buyers value authenticity when evaluating B2B companies to partner with. Providing transparent information builds buyer trust, particularly for buyers who are unfamiliar with a company. The premium businesses place on transparency is reflected in the characteristics they find most important about a B2B company’s website:
· Transparency about cost (25%)
· Case studies and testimonials (23%)
· Immediate access to information (17%)
The more information businesses can access about a B2B company on its website, the less they may rely on external resources to do so.
For example, case studies and testimonials can give audiences intimate insight into a business service’s or software’s impact. Immediate access to information through a chatbot or a helpful FAQ page also helps fill in any blanks that company representatives or other website resources don't address.
Online Reviews Build Trust With Buyers
Nearly all businesses have referenced online reviews as a source when making a B2B purchase. Businesses use online reviews to better understand a company and are most concerned with reviews’ validity.
· Nearly all businesses (94%) have used an online review to help make a B2B purchasing decision.
· Company websites (68%) are the most-referenced source for online reviews, ahead of reviews on search engines (61%) and B2B ratings and reviews sites (53%).
· Half of businesses (50%) say that validity — in other words, how reputable the source — is the most important characteristic of an online review when making a B2B buying decision.
· Nearly half of businesses (47%) read at least 6 reviews of a B2B company when making a B2B buying decision.
Online reviews are a growing source of important information about B2B companies. Nearly all businesses (94%) have relied on a review to make a B2B buying decision.
For B2B companies, online reviews provide an opportunity to:
· Improve SEO: Online reviews are starting to take up more space on search engine results pages (SERPs), especially for local results. Collecting and responding to reviews allows business buyers to access information directly about a B2B company rather than having to navigate a company website or wait for outreach from a sales representative.
· Instill trust with customers: Online reviews provide personal insight about partnering with a B2B company, which people view as more objective than information listed on a company resource.
Because company websites are the resource most businesses rely on during their B2B purchasing process, it makes sense that most businesses encounter online reviews on company websites.
Businesses also encounter online reviews on search engines and platforms dedicated to reviews for B2B services and software.
When businesses read online reviews, they are looking for proof that it's from a reliable source. Half of the businesses (50%) say validity — in other words, how reputable the source — is the most important characteristic of an online review.
Valid online reviews that are posted on reputable platforms provide clarity for business buyers, according to Fung.
"There’s so much ‘noise’ on the internet that it’s challenging to find good, honest, reliable reviews about vendors," Fung said. "However, there are usually a few trusted review sites for most industries, and it’s well worth a vendor’s time, attention, and resources to show their best selves in those arenas."
In fact, more than double the number of businesses are concerned with the validity of an online review than other characteristics, including:
· Rating or score (22%)
· Recency (11%)
· Format or layout (8%)
· Length (8%)
This data underscores the importance of B2B companies soliciting verified reviews from former clients across multiple platforms, including their website, search engines, and ratings and reviews sites.
The more reviews B2B companies collect, the closer they get to matching B2B buyer behavior: Nearly half of businesses (47%) read at least 6 reviews during their B2B buying process.
A B2B company can positively influence buyers’ opinions by collecting valid, recent, and unbiased online reviews.
B2B Companies Can Influence Buyers but Need to Understand Businesses’ Purchasing Process
When businesses hire a business services provider or invest in software, they spend the most time and rely on the most people to research and evaluate B2B companies.
At the research and evaluation stages, businesses also rely on younger employees the most, a group that is more likely to value collaboration and is comfortable researching multiple resources online to inform their purchasing decision.
Businesses need less time and rely on fewer resources as they progress through the stages of the B2B buying process. Specifically, businesses rely on smaller groups of 1-3 employees from older generations to make a final decision about a B2B purchase.
Overall, businesses use a mix of vendor resources such as B2B companies’ websites and sales representatives and external resources such as online reviews and peer recommendations to help them during their purchasing process.
Our data indicates that B2B companies can influence buyer behavior. By providing transparent information about cost and using resources such as online reviews, B2B services and software companies can improve visibility online and engage and ultimately build trust with business buyers.
About the Survey
Clutch surveyed 451 employees who were involved with their business hiring a business services provider or investing in software in the past 12 months.
Respondents range in ages: 20% are ages 34 and below; 52% are 35-54; and 27% are 55 years old and above.
By Grayson Kemper
Content & Editorial Manager, Clutch
February 26, 2020