Steps in Business Buying Process
The business buying process involves five distinct stages. At each stage, different decision makers may be involved, depending on the cost and strategic importance of the purchase. To navigate the buying decision process successfully, you need to provide the right type of information and ensure that your sales representatives are contacting the right decision makers. You can also strengthen your position by offering customers advice and guidance at each stage – a process known as consultative selling.
Five Stages of the Business Buying Process
(i) Awareness and Recognition
The process begins when a company identifies a need for a purchase. It may want to replace an existing item, replenish stocks or buy a new product that is just available on the market. You can also stimulate a need that the company may not be aware of by advising them of issues and challenges that other companies in their industry face. The buying team next works with the requesting department to firm up on the requirement. Your sales team can provide advice and guidance at this stage by offering discussion papers or inviting decision makers to workshops or seminars on the topic.
(ii) Specification and Research
When the buying team has agreed requirements, it prepares a detailed specification that sets out quantities, performance and technical requirements for a product. Your sales team can support this stage by advising the buying team on best practice or collaborating with the buying team to develop the specification. Buying teams then use the specification to search for potential suppliers. They may search the internet to find products or companies that provide a match to their specification, so it is important that your website features keywords that match your customers’ product or service needs.
(iii) Request for Proposals
When the buying team has identified potential suppliers, it asks for detailed proposals from the suppliers. The team may issue a formal document known as a request for proposal, or it may outline requirements and invite potential suppliers to make a presentation or submit a quotation. If the product or service has a precise specification, the buying team may simply ask for price quotations. If the product is more complex, it may ask for proposals on how a supplier would meet the need.
(iv) Evaluation of Proposals
The buying team evaluates suppliers’ proposals against criteria such as price, performance and value for money. As well as evaluating the product, they assess the supplier on factors such as corporate reputation, financial stability, technical reputation and reliability. You can influence decisions at this stage by providing company information, case studies and independent reports that review your company and products.
(v) Order and Review Process
Before the buying team places an order with the chosen supplier, they negotiate price, discount, finance arrangements and payment terms, as well as confirming delivery dates and any other contractual matters. When the order is complete and delivered, the buying team may add a further stage by reviewing the performance of the product and the supplier. This stage may include imposition of penalty charges if the product fails to meet the agreed specification.