Most companies don’t know why their products are purchased – that is, which perceptions of the company, product, and brand that actually drive sales. Ask any business leader, and there is a very high probability that arguments such as quality, unique technology and broad product range will be mentioned as the most important factors.
But as a rule, it is not superior quality, revolutionary technology or a broad offering that attracts more customers or even justifies a higher price. For most of us as buyers, it is often enough that the product or service quality is good enough. We make our choices based on entirely different factors – or at least that is what modern research into sales-driving factors states.
During many years we have been working together with Johan Anselmsson, Lund University School of Economics and Management, and Niklas Bondesson, Stockholm University, and done roughly 30 Brand Potential Analysis for large Nordic B2B companies.
Some key insights from the surveys done:
- Quality is generally an overrated concept. In most industries – particularly mature markets where buyers understand why they should purchase a product or service – quality is viewed as a hygiene factor. A certain standard must be met, but exceeding it often adds little value.
- The same applies to brand awareness. It is important for a brand to be known within its industry, but only up to a certain point. Once that threshold has been reached, additional recognition has virtually no impact on sales.
- Authenticity sense of belonging and status/prestige frequently rank high among the factors that genuinely drive sales. In other words, whether buyers (consciously or unconsciously) perceive a brand as having a genuine purpose or authentic foundation, see themselves as a part of the brand’s community or it enhances or confirms their own social status – is often far more important than specific product features or quality attributes, whether you sell spaghetti or steel.
Ask, and your customers will lie
You probably believe you have fairly good insight about why your products are purchased – and why they are not. What you may not realize is that this information very likely is incorrect.
Whether your salespeople have asked customers directly or you have conducted traditional customer satisfaction surveys, the answers you received are often not the truth.
We are not suggesting that people deliberately lie to your face. Rather, we argue that people frequently lack either the insight or the motivation to explain why they choose and act the way they do.
One of the unique features of the Brand Potential Analysis is that it does not focus on what customers say is important when selecting a supplier, which is what conventional market research typically does. Instead, it uses statistical analysis to identify which brand associations actually make customers want to buy – and/or pay more.
Curious what drives sales in B2B? In this earlier blogpost you get a summary of the most sales driving factors. And then, why don’t find out how you can sell more profitably?
And if you want to discuss how you learn to know why your customers, you are always welcome to contact ulf@sfinxagency.se
