Have you ever wondered why industrial buyers seek out new suppliers to work with? Understanding the most common reasons this happens can help you to grow your customer base through simple changes to the way you market your products and services and approach and develop sales opportunities.
Understanding an industrial buyer’s particular situation at their moment of need will help you grow your customer base, lead to more word-of-mouth referrals, and — bottom line — increase your revenue. It can also keep you from losing existing customers if you apply it as a litmus to the current base of industrial buyers you do business with.
The easiest way to remember the five basic drivers that cause industrial buyers to seek out new suppliers is through a simple mnemonic device: NEDIC.
- New Buyers
- Emergency Situations
- Dissatisfaction with Suppliers
- Infrequent Buyers
- Comparison Shopping
Let me break it down for you.
What is the first reason that an industrial buyer comes into the market? Because they are a new buyer.
New buyers can emerge for several reasons. They could be a seasoned purchaser that is starting a new product line. Or, maybe they are a new, young engineer seeking new ways to source materials.
In fact, some statistics show that over 80 percent of engineers are nearing retirement. This opens the door for a new generation of engineers to walk through your door. This new generation is likely to look online for new suppliers. Understanding their preferences for sourcing through digital means is one way to reach an emerging and important target audience.
The “E” in NEDIC stands for emergency situations. The emergency in question could be an existential one, such as COVID-19 and its many-faceted effects on supply chains. More often than not, though, the emergency is on the plant level. When downtime is not an option, buyers need suppliers to come through . . . yesterday.
Whether the emergency is due to equipment failure or delivery issues, some suppliers are simply not prepared to meet an urgent client need like this. For others who are, this represents opportunity. Being a supplier that is equipped to respond to emergencies in record time can provide you with an introduction to a new buyer.
On the other hand, if your company is not able to respond to these requests in a timely manner and you have customers that need this level of responsiveness, those industrial buyers will look for other suppliers.
Dissatisfaction with Suppliers
Perhaps the greatest opportunity for an industrial supplier to turn an industrial buyer into a new customer is when the buyer in question is dissatisfied with a current supplier.
This can happen for many reasons. Maybe the current supplier’s response time is not satisfactory or, perhaps, their inventory doesn’t consistently meet quality standards. Whatever the reason, simple dissatisfaction can be a cause for industrial buyers to seek out new suppliers.
This is an area where all suppliers have a chance to shine. First, by working hard to keep current buyers satisfied and, second, making sure that they understand the reason buyers who are searching for new suppliers were dissatisfied in the first place — and doing the opposite.
A somewhat rare prospect in the new industrial buyer marketplace is a buyer who makes purchases infrequently. They may have longer production cycles leading to a reduced need to purchase on a regular basis. Or, they could have a product that they look to reimagine every few years.
Either way, the infrequency of purchases makes these industrial buyers less likely to factor supplier loyalty into their purchasing equation. Understanding this non-traditional buying cycle can be critical for your marketing and sales teams as they try to create opportunities and cultivate these relationships.
Finally, a reason that we are all familiar with: comparison shopping.
Just like with consumer shoppers, every industrial buyer wants to get the best deal they can. Whether this manifests in terms of pricing, newer technologies, or just better overall solutions, at the end of the day, purchasing agents, engineers, and executives all want to make sure that they are doing everything possible to increase competitiveness and improve their profit margin.
With an average relationship lasting three years in the service industry, this motivation is familiar. Keeping your products and services competitive is key to retaining current clients and reaching new buyers.
Use NEDIC to Find — and Retain — Industrial Buyers
As you consider ways to engage with new buyers, you can use NEDIC as a tool to categorize prospects into its five categories. This will help you design a strategic approach to each customer that addresses their specific needs and situations.
Meanwhile, NEDIC can also help you ensure that you don’t lose any of your current buyers by giving you a framework for evaluating your ability to deliver value to your customers, as well as navigate changing market conditions.
If you are interested in learning more about the tried-and-true method for categorizing buyers and maximizing your sales potential, please connect with me on LinkedIn or visit INDUSTRIAL, a full-service marketing agency dedicated to helping industrial companies become better marketers and sellers of their products and services by centering on their customers.