Organizational buying behavior has to do with the purchasing decisions made by a business or other type of organizational entity. While sharing some characteristics with the buying behaviors of consumers, the purchasing habits of an organization are often influenced by a number of factors that are associated with the culture of the entity as well as the nature of the industry in which the organization functions. Understanding the nuances that motivate a particular organization to utilize certain processed and approaches to buying goods and services can help sales professionals determine the best strategies for connecting with the organization and making sales.
One of the key factors that influence organizational buying behavior is the culture of the business or organization. For example, if the general culture of a business tends to be somewhat conservative, there is a good chance that the business relies heavily on its cash flow to make purchases and less on lines of credit in order to secure the goods and services needed for the operation. When this is the case, the focus is often on securing quality products at the lowest prices possible, so they can be purchased without placing a great deal of stress on that cash flow. When the company enjoys a steady stream of revenue from sales and investments, this approach can often mean that vendors with low prices, low interest charges, and more liberal payment terms on invoices may be in an ideal position to attract the attention of this type of entity and build a long-lasting relationship.
Another aspect that will often influence organizational buying behavior is the prevailing culture within the industry in which the organization participates. This means that buying habits will often be shaped by any governmental regulations that may have to do with that industry, as well as how competitors are functioning and maintaining a certain share of the market within that industry. In order to remain in compliance with government standards and compete with others in the same markets, a company or other type of organization will often adapt to the current environment in both how it produces goods and services and what steps are taken to secure the resources needed to manage that production.
The organizational buying behavior of any entity is subject to change over time. Shifts in the economy, changes within the industry, innovations in technology, and the appearance of new government regulations can prompt changes in buying habits as the entity adapts in order to survive the new circumstances. For this reason, salespeople often reassess the potential of a potential client based on what is happening with the organizational buying behavior currently exhibited by that prospective customer, and plan the approach accordingly.