Younger B2B purchasers tend to face more obstacles in finalising a purchase due to their limited experience in business decision-making when compared to their older counterparts.
According to the 2023 State of Business Buying report by Forrester, there has been a noticeable increase in price sensitivity among B2B buyers. Key contributors to this shift include budgetary restrictions, generational distinctions, regional norms, inflation, and changes in the workforce composition.
The foremost reason causing a delay or discontinuation in a B2B purchase is price, as indicated by 18% of survey respondents. Another 18% mentioned budgetary constraints as the primary deterrent. Forrester’s survey encompassed opinions from over 18,000 international business buyers.
To make the buying journey smoother in the face of budget limitations, vendors who are clear about their pricing and can emphasise the return on investment of their product are better positioned. Amy Hayes from Forrester commented on the widening chasm between the price buyers are prepared to pay and what providers demand.
Multiple elements impacting B2B purchases
While price and budgetary constraints are primary culprits behind delayed B2B transactions, other combined factors also contribute. A significant 89% revealed their purchase was postponed due to various reasons, while a mere 11% experienced no such delay. Other obstructions include:
- Ongoing repercussions of the COVID-19 pandemic (15%)
- Financial negotiation complexities (14%)
- Internal purchase protocols (14%)
- Difficulty in achieving internal agreement on product choices (12%)
Hayes points out that macroeconomic shifts, such as the pandemic aftermath, inflation uncertainties, changing workforce dynamics, and remote work transition, are integral in influencing buying decisions.
Information needs of B2B buyers
Buyers prioritise price information, followed by features, functionality, and performance specs. The report suggests a shift to more basic concerns, sidelining abstract business considerations. Additionally, Hayes shared that buyers tend to equally divide their information sourcing between sales representatives and self-help channels.
The generational gap in B2B buying
Generational disparities are prominently impacting buyer actions. Younger buyers, predominantly Millennials and Gen Z, representing 71% of respondents, often face challenges that prolong their purchasing decision. In contrast, older buyers, mainly Gen Xers and Boomers, making up the remaining 29%, were thrice as likely to not report any such hindrances.
The primary reason for younger buyers facing these challenges is their limited involvement in business decision-making, necessitating more guidance from vendors.
Hayes highlighted that younger buyers often face challenges such as market fluctuations and the persistent impact of the pandemic. Additionally, 13% of younger buyers reported difficulties in achieving consensus within their teams regarding vendor choices, indicating their relative inexperience and influence within organisations.
Older buyers, on the other hand, often rely on past interactions with a provider when seeking information, while younger ones equally depend on third-party experts.
Geographical variations in B2B buying behavior
Location plays a significant role in B2B buying choices. North American (36%) and European (33%) buyers display a stronger price sensitivity compared to those in the Asia-Pacific (27%). Trust and vendor relationships are more valued in the Asia-Pacific region.
Hayes mentioned that independent buying decisions, often finalised within two months and typically under $50,000, are more frequent in North America. She attributes this to cultural differences, with Asian nations leaning towards a more consensus-based decision-making approach.