Why Emotion, Not Logic, Drives Buying Decisions

Originally published on AdAge.

‍

Companies rarely decide to buy a product or service from another company.

At small businesses—which account for 99.9% of businesses in the U.S.—one person usually makes purchasing decisions. In large companies, it’s typically a small group of people. In either case, humans are making choices based on their own preconceptions and personal decision-making tendencies, whether buying a car, choosing a medication or investing in technology for their business.

This means we are in the era of business-to-individuals. Or, more accurately, brands-to-individuals. Here’s why:

Raja Rajamannar, CMO at Mastercard, calls this “human-to-human marketing” to explain the blurring of the lines between business-to-business (B2B) and business-to-consumer (B2C). But even seeing a line as blurred implies a separation that truly no longer exists for most business decision-makers.

For decades, sociologists have theorized that people need three places where they feel comfortable: where they live; where they work or attend school; and a third place in which they feel seen, understood and comfortable—such as a gym, coffee house, house of worship or local bar.

At the start of the pandemic, these three places merged into one. This behavioral pattern that evolved over the past four years won’t suddenly vaporize just because someone is seated in an office setting. Further, as of earlier this year, 80% of employees in remote-capable jobs work at least partially remotely, according to Gallup data.

Balance, as we’ve known it, is a thing of the past—even more so for senior business decision-makers who spend an average of eight hours working from home each weekend. Personal decisions now happen regularly during the workday and work decisions on family and personal time are just as common.

People are simultaneously choosing on behalf of their families, businesses and selves, with time and location being less relevant than ever.

The same emotional needs guide these parallel choices. Concepts such as B2B, B2C, B2B2C—or any of the other acronyms that describe interactions between entities and humans—are functionally obsolete. So, how do brands navigate and succeed in this altered reality? It should begin with understanding a few simple shifts:

From demand generation to demand detection

Most consumer purchase decisions now happen on impulse and eventually impact business decisions, as well.

Demand generation implies a strategy of targeting people and convincing them that they need your product or service. Yet, 95 percent of consumers choose the brand that best meets their needs in the moment. Even though B2B decisions are typically greater in number, complexity and set of stakeholders, emotions and impulses are driving most choices.

Demand detection is about brands understanding what people and their businesses want and giving it to them before anyone else—because 95% of buyers choose the brand that best meets their needs now.

From facts to feelings

In a time when people experience work and family simultaneously, it is not enough to show up when someone is at the point of purchase and present them with a set of rational benefits. For brands to succeed in a brands-to-individuals landscape, there must be an understanding of the human who is making the decisions.

Are they confident in their knowledge? Do they feel the need for consensus? Do they follow trends or create them? Knowing what’s happening in the mind of the decision-maker has become more important than the tapped-out “best practice” of targeting and capturing customers along a purchase journey that no longer exists in linear form.

From big data to good data

Marketing effectiveness has declined by a shocking 71% since the height of the COVID-19 pandemic in 2020. And 94% of all marketing investments aren’t even measured beyond a 6-month window. This is problematic when you consider that many larger business sales may not even close within that period.

Even with the massive investments made into data and tech stacks, data is still being used in the wrong ways, and with too much focus on “targeting” and “lead capture” and far too little focus on understanding customers and what they need to say “yes.” Organizations that use data to understand and anticipate what people need from them—as opposed to more mercenary approaches—will achieve much stronger outcomes in the years ahead.

The good news for all marketers, especially those with both business and consumer targets, is that it’s easier to focus on the needs of individuals than it is to predict the complexities of a corporate decision-making process. The challenge is that it requires a significant mindset shift to begin seeing consumers as people—not purchasers—to evolve decades of “best practice” thinking into an approach that works for brands and customers alike.