Make Versus Buy

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Recently, I’ve been involved in some conversations with some very smart people. The discussions have been addressing the need for sales people to empathize with customers’ feeling some level of shame or guilt in getting buying a product, since it is a recognition of their inability to solve the problem on their own.

Frankly, I don’t get the point. The more I explore it, the less I get it. In fairness to the smart people driving the discussion, I probably don’t understand what they are saying.

Perhaps, I’m guilty of wordsmithing, or perhaps I’m looking at the other side of the coin, but the make versus buy decision is a rational process our customers go through in solving their problems. There should be no remorse or guilt about choosing to buy over addressing the issue with the organization’s own resources.

I think this is an important issue, it impacts how we view the customer and how we engage them. It impacts the customers’ own mindsets and their approach to managing change.

Some thoughts:

1. We tend to think only of the buying process/journey the customer is going through. It’s natural, because we tend to be so focused (perhaps mistakenly so) on selling our solutions, that we forget the buying process is only a small part of the customer opportunity/problem solving process. What we sell is always just a component of what the customer is trying to achieve.


2. Every decision the customer makes in their opportunity/problem solving process represents a set of conscious tradeoffs and decisions the customer is making. Among the things they must consider, and make decisions about are:
   
   1. What are the alternative solution paths?
   
   
   2. What are the relative risks and returns of those solutions?
   
   
   3. What is the time to results for each alternative?
   
   
   4. What resources does it take to achieve the goals they are trying to achieve?
   
   
   5. Related to the previous point, is this where we want to invest those resources or is there another area in which we want to make those investments that create a higher return?
   
   


3. Each of these decisions is made in the face of:
   
   1. An absence of data/information, or ambiguous/conflicting data.
   
   
   2. A dynamic, constantly changing environment filled with uncertainty.
   
   
   3. An environment with constantly shifting priorities.
   
   


4. And some of the decisions or processes the customer undertakes may not be rational–at least based on our perception of what they are doing.


5. Ultimately, the decision to make/buy is the result of balancing all the tradeoffs I’ve outlined (and more), and making a choice of the best strategy to move forward in achieving their goals.

In the end, the customer is making choices–ideally they are making choices to assure the best outcome to the problem they are trying to solve.

While they may be fully capable of solving the problem themselves, for various very good reasons, they may choose to get some help in solving the problem. My own choice for a virtual assistant is an example of evaluating the tradeoffs and making a choice. While I am fully capable of doing the things my virtual assistant does for me, perhaps even better than the virtual assistant; I have hired that person so I can spend my time doing other things that are more important to me.

Do I feel some sense of failure because I had to seek outside help, make a buying decision for the virtual assistant? Absolutely not, actually it is quite the opposite, I am ecstatic with the choice because it enables me to invest my time in things that only I can do.

Our customers make make/buy decisions every day. For example, some of my clients have made a decision to build their own CRM systems–it’s the outcome of a process involving all the issues and tradeoffs outlined above. They have determined the best alternative for them is to build their own CRM system. On the other hand, many others believe it is better to buy a CRM system–again, they have gone through the same process as others, prioritizing different issues to make a buy decision. With these organizations, the decision was not made out of a sense of failure because they couldn’t build the CRM themselves, but rather a choice about how to best achieve their goals, manage risk, and use their resources.

Business operates in an environment of limited time and resources (people, money, etc.) Business leaders balance the choices they make within these restrictions.

We have to have empathy for our customers–not because buying represents a failure on their part, but rather about the challenges and difficulties in the problem solving/change management process itself.

What do you think? Is the act of buying the result of a customer’s failure to be able to solve their own problems or is it more of a rational tradeoff or alternatives, risk management, and choices about how to use limited resources?

Source: B2C