A Decade of Research Into How B2B Buyers Make Purchase Decisions

Challenger has tracked the evolution of B2B buying and selling since 2008. See what a decade of research and analysis taught us.

January 26, 2024
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For more than a decade, Challenger has focused our quantitative and qualitative research on two things: B2B buyer behavior and B2B seller performance.

It’s been a fascinating journey. We’ve learned a lot. And now we’re here to tie that research together into a story across time. There is more to discover.

Let’s take a look.

2008-09: The Surprising Truth About Customer Loyalty

The story starts when Challenger was part of CEB (acquired by Gartner in 2017 and spun off as Challenger in 2018). In the years leading up to, and right through, the global financial crisis of 2008-09, our group conducted a widescale study (the largest-ever study of its kind) that would eventually change the way sales and marketing leaders looked at, and set about acquiring, customer loyalty (i.e., the ways companies drive customers to buy, buy more, buy more often, and advocate on their behalf).

This ongoing survey of approximately 5,000 individuals — everyone from business owners and C-suite executives to end users, purchase influences, procurement officers, and even third-party consultants — aimed to determine what exactly they look for in B2B suppliers and solution providers.

The survey consisted of roughly 50 questions covering the typical reasons why a B2B buyer might choose one company over another, such as product efficacy, brand, service quality, and price-to-value ratio.

Then respondents were asked to report on the sales experience itself — what it’s actually like to buy from the named supplier relative to their competitors.

And finally, for the pinnacle of the survey, the survey asked each respondent to gauge their level of loyalty to these suppliers based on their likelihood to repurchase, increase spend, or advocate for their chosen supplier.

Years of previous loyalty research determined that the answers to these three questions better predict deeper, longer-lasting customer relationships than any other loyalty metric.

About the Analysis

  • 5,000 purchase decision makers and stakeholders from diverse, global B2B enterprises
  • 50 questions analyzing typical reasons why a B2B purchase decision maker might choose one supplier over another to test product efficacy, brand, service quality, and price-to-value ratio
  • Objective was to identify the drivers of customer loyalty and measure their impact on a customer’s likelihood to:
    • Keep buying from a particular supplier
    • Buy even more from a supplier going forward
    • Advocate on a supplier’s behalf internally

So, just what is it that’s responsible for true customer loyalty? At the time, the answer was completely unexpected for most sales and marketing executives around the globe.

Today, many of those same sales and marketing executives would credit this insight with sparking dramatic shifts in their commercial strategy that ultimately produced significant gains in sales productivity and performance.

The Four Drivers of Customer Loyalty in B2B Sales

As fate would have it, this research unfolded around the global financial crisis (our most recent major economic disruption before COVID). But it was that disruption that led us to uncover an insight that would shape the way B2B solution providers go to market, even over a decade later.

Ultimately, customer loyalty comes down to four statistically significant drivers: Company and Brand Impact, Product and Service Delivery, Value-to-Price Ratio, and Sales Experience. But the relative impact of each driver on loyalty was game-changing for many organizations.

The first finding is one you might expect — brand/reputation, product, and service have a sizable impact on loyalty.

When you combine these two factors, you find that 38% of customer loyalty is attributable to a given company’s ability to outperform competitors on these dimensions. Selling a well-branded, highly differentiated product, supported by higher-than-industry-average service, will undoubtedly get you more loyalty. If you’re way behind the competition in any of these three categories, that’s probably where you want to start. In other words, these are table stakes when it comes to any commercial strategy and the price of entry to even be considered.

That said, many sales and marketing executives at the time assumed these “usual suspects” would account for much more.

Not to mention price.

But only 9% of customer loyalty is attributable to a supplier’s ability to outperform the competition on value-to-price ratio.

Why? Recall, we’re talking about loyalty here.

A low price might win an initial deal, but it almost certainly won’t get you loyalty. Put another way, those customers who signed up with you initially for price will not hesitate to leave you for price.

So while it’s true that brand/reputation, product/service, and price do influence customer loyalty, their total impact doesn’t even add up to a majority.

The real reason for their surprisingly low impact is actually quite intuitive after-the-fact: These customers didn’t perceive much difference between the suppliers in question since most had valuable products, well-known brands, and quality service.

The dimension upon which buyers did see a huge difference from supplier to supplier was the sales experience — the actual series of sales conversations they had with suppliers throughout their purchase journey — which ultimately tipped the scales.

At 53% of the loyalty equation, the sales experience drives more customer engagement and loyalty than brand, reputation, service, quality, and price combined.

That’s it. That’s the punchline.

Simply put, buyers felt some sales reps had completely wasted their time, while others had provided an experience that was well worth it.

Even suppliers that rated similarly across all other dimensions were scoring wildly different marks when it came to the sales experiences they were delivering. And that difference, it turns out, has a huge impact on customer loyalty.

This was the insight that started it all… The recognition that B2B customer loyalty isn’t won in R&D, advertisements, or customer service call centers. Loyalty is won throughout the sales experience because of the conversations sales reps are having with customers every single day.

2018-19: Does the Sales Experience Hold Up?

In June 2019, Challenger once again surveyed a large sample of B2B buyers. Participants were asked to reflect on a recent, large purchase process that included interaction with a seller. Our goal was to determine what, if anything, had changed in the drivers of customer loyalty since the original Challenger research.

Buyers were asked to assess their purchase, and the reasons for their decision, on a number of dimensions: The company’s brand and reputation, satisfaction with the product or service’s performance, relative value provided (price/value), and the purchase experience itself, including an assessment of the seller’s skills, messaging quality, ease of the buying experience afforded to them, as well as the service and implementation support promised once committed.

About the Analysis

  • 667 B2B buyers with a recent purchase made virtually (39.2%) or in person (60.8%) across a variety of industry sectors including equipment (34.8%), tech (38.5%), services (39.3%), and supplies (38.6%)
  • Evaluated complex purchases with high price points (81% at $50k+), large stakeholder groups (11.2 individuals on average), and a formal RFP process (86%)

Sales Experience Continues to Drive Customer Loyalty

The primary objective of the analysis was to understand whether the sales experience itself continues to be the greatest driver of customer loyalty, reaffirming the groundbreaking 53% insight, ten years on and in a very different (much healthier) economic environment.

Indeed, it was.

This is especially significant as the sales experience is the piece of the puzzle over which any given supplier or solution provider has the most immediate control.

When you look closely at the data compared to previous results, you do see a bit of movement: An increase in brand importance and value-to-price ratio offset by a reduction in product and service importance… but the differences were negligible.

This is quite remarkable considering what has happened in the decade between the original analysis and the sequel.

The global economy slowly but steadily improved from the 2008 global financial crisis through 2019. Businesses grew, along with corporate budgets and a desire to make investments.

But with the opportunity to invest comes different opinions about what to invest in, and more people found themselves involved in purchase decisions than ever before.

The size of the typical B2B buying group grew incrementally every few years from 5.4 to 6.8 to 10.2 to just under a dozen in our most recent study.

These people from multiple functions bring more perspectives, opinions, and sources of information, but the more diverse the opinions, the greater the risk of group conflict.

Building consensus across large, ever-expanding buying groups has been the challenge of the decade.

Most Important Seller Skills for a Better Sales Experience

Something else that hasn’t changed from our original study: Buyer’s expectations for an insight-led sales experience. They are hungry for value, unique insights about their business, and for sales professionals capable of serving as true business partners. This was true in 2008-09 and remains true today.

The following are fundamental skills buyers feel are most important, and when done well, will differentiate the experience a seller provides.

A New Era of Complex Selling in B2B

This updated analysis also revealed something surprising about how buying journeys begin — and end — with two key findings that define the new era of complex selling.

The vast majority of buyers (89%) reported they themselves identified a business problem or emerging need and initiated their purchase journey independently, without the help of a seller. They also reported conducting at least some kind of due diligence first — independent research or an outbound request for information from potential suppliers and service providers.

But the most striking finding that emerged from the data was the fact that 38% of purchases resulted in “no deal.” In other words, nearly 4 out of 10 would-be buyers in this study began, and completed, at least a portion of a purchase process that never resulted in an actual purchase. They chose… not to choose.

2020: B2B Buying and Selling Gets More Complex

The remarkable consistency between our original analysis and the 2019 redux reaffirmed the importance of the sales experience in building customer loyalty, but it also set up a Hemingway situation where change comes “gradually, then suddenly.”

In March 2020, with most of the world working from home, it was clear that B2B buying and selling had suddenly, and radically, changed.

What did we observe? How has this affected B2B buyers and the sellers who call on them?

These are questions we set out to answer in our last installment of this ongoing study. We wanted to understand how customers were navigating the “new normal” and what they thought of suppliers trying to do the same.

About the Analysis

  • 110 B2B buyers in procurement, production/operations, IT, finance, and various other corporate functions surveyed in July 2020
  • Spend an average of 60% of their time on purchasing-related activities
  • 52% work at companies with 500 or more employees
  • All work at companies with more than 200 employees
  • Surveyed on the changes they observed since the shape of the economy was transformed by COVID-19 across key topics such as spending decisions, supplier selection, and seller capabilities

Pivot to a Buyer’s Market

When you stop and consider what actually happened beginning in March 2020, global health crisis aside, we observed a dramatic shift in the B2B purchase landscape. A shift from what ended up being a 10-year sellers’ market, to what is now very much a buyers’ market.

How so?

First, expenditures are more heavily scrutinized than they’ve been in years. A good number of organizations (38%) reported freezing non-essential spend. Others heavily scrutinize each deal, and buyers are taking back control. Procurement leaders have secured a seat at the strategic table for the foreseeable future, placing hurdles in the buying journey last seen in 2008-09.

So long story short, whether you’re selling a marketing automation platform to a CMO or heavy equipment to a supply chain executive, the rules have been made abundantly clear, from their respective businesses, in terms of what they can and cannot purchase.

An Alarming Decline in Seller Capability

What the 2020 data was telling us was clear: Winning new business now requires sellers to meet a higher-than-usual bar that buyers have set. The requirement to sell virtually, the uncertain economy, navigating procurement policy, and a new crop of sellers needing to impress buyers in their first “buyer’s market” contribute to this.

And buyers are clear about their opinion of the sellers who call on them.

When we retested buyer opinion of seller skills related to providing a powerful sales experience post-COVID, seller capability in the five most important skills to buyers was down 40% since 2019. Some were hit harder than others, especially the most important skill of demonstrating unique insight, which was down 52%.

It’s unlikely that sellers have just somehow became less effective in their jobs. Their performance likely didn’t change from 2019 (and that’s the problem).

The expectations of their audience have changed.

Today’s buyers have real objections, they demand a compelling insight, and they won’t tolerate a meeting that doesn’t engage them and motivate them to action. In the eyes of buyers, it’s never been more important for sellers to provide unique perspective and insight, support decision-making, and give a clear reason to take action.

The Way Forward: What’s Next for Challenger’s B2B Buyer Study

During the growth years of the previous decade, buying groups had the budget and approval to make purchases — and they would do so in spite of the experience sellers provide.

Now, they may only purchase (or even start the decision-making process) because of the experience sellers bring.

You must take a hard look at the sales experience you deliver. Do you have the right things in place to avoid common failure points highlighted in this research and develop the seller skills that are most important to buyers?

  • Delivering the Right Message: To provide the sales experience that would lead to greater loyalty, companies (many with our help) are turning to Commercial Insight, a form of sales messaging purpose-built to challenge customers’ assumptions about their business, motivate them to action, and connect to your differentiated solution. Challenger organizations enable their sellers to deliver Commercial Insights that disrupt status quo and win customer engagement and loyalty.
  • Developing the Right Skills: Where companies have the best success, they’ve continued to leverage Commercial Insight and developed a new skillset focused on the most important seller skills, according to buyers. And that skill development comes in a variety of flavors — from live training to self-guided elearning to tech tools for skill application to coaching from managers and more.
  • Finding the Right Buyers: In a world where buying groups are nearly 12 people, and procurement has every purchase under a microscope, finding the right buyer stakeholder to engage is mandatory. Winning companies are activating and engaging customer Mobilizers, those buyers who are capable of challenging their colleagues to overcome status quo and move the purchase forward.

A lot has changed since the original Challenger research in 2008, but one thing remains the same: To win the complex B2B sale and capture more loyal customers, you must make every moment count in your sales conversations across the buying journey.

And that is where our work (the work of sellers to rise up and meet the new experience bar) has just begun.

As a parting thought, we’ll leave you with this: Keep an eye on Challenger in 2024 as we look to update and revalidate our B2B buyer analysis!

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