Are B2B Buyers More Rational?

This year, our sister program, CEB Marketing Leadership Council, is exploring the rationality (or lack thereof) of customer decision-making with respect to B2B purchases. When they initially tested this topic on the membership, they received pretty consistent feedback: “Of course, we are selling to people, after all.  Feelings like ‘fear’ and ‘trust’ are hugely important.” They also heard a common caveat: “The larger the deal, the less emotion involved because more is at stake, and customers pull together larger buying committees to make a rationally defensible purchase decision.”

Now, intuitively, that makes sense. After all, conventional wisdom says that groups do a better job at decision-making than individuals. However, our review of academic research shows that it would be a grave mistake to hinge your efforts on that assumption. To demonstrate why, here’s how three widely-believed aspects of that assumption stack up against the (repeatedly confirmed) academic research.

Myth #1: Groups make better decisions because they process information more rationally.

Researchers have found repeatedly over the decades that group members don’t pool critical information, and as a consequence, the quality of their decisions is low.  For one, confirmation bias plays a huge role.  According to this study on group decision-making, information conforming to the group’s preference is more likely to enter the discussion than opposing information.  And this phenomenon has been observed in both groups as well as individuals, for both preliminary (reversible) and final (irreversible) decisions. 

Myth #2: Groups make better decisions because they can deal with more information than individuals can.

This would be true if every piece of knowledge that each member of the group knew were actually discussed…but that rarely happens. Research shows that groups mainly discuss and make use of “shared information” (available to all members before discussion) rather than “unshared information” (only originally accessible to one or a few members). And in experiments involving such asymmetrical information, groups have less than 30% success rates in picking the rationally correct choice. Researchers even found that groups given instructions designed to improve information use performed no better than those who were not.

Myth #3: Groups make better decisions because of the ability of group members to point out errors in others’ information processing.

The truth is, group decisions are often driven disproportionally by one individual (a phenomenon known as “cognitive centrality”).  This was observed both in laboratory experiments as well as in corporate executives’ decision-making processes.  That effect is exacerbated because more a person feels committed to a particular position, the greater the desire to uphold it, even when confronted with conflicting opinions and evidence. There’s also an aspect of the group’s objective to consider here: consensus-driven groups (goal = agreement) make poorer decisions than critical groups (goal = right answer).

In light of all this, it’s pretty safe to say that buying groups are no more rational than individuals in their purchase choices. This means that we need to reconsider our approach towards communicating to various customer stakeholders. Though the rational, function information is necessary, it’s the non-rational dynamics (whether emotional or cognitive) that will actually get customers to internalize that information to drive action.

CEB Sales Members, learn more about Mobilizers – customer stakeholders that can mobilize an organization around a purchase. Also, visit the Commercial Coaching topic center to learn how reps can actively guide customer stakeholders through the consensus-building process.

This is a guest post by Jing Zhang and Anna Bird of the CEB Marketing Leadership Council, our sister program for marketing professionals. We’ve modified it a bit for a sales audience. Visit the original here!