The Independent market is largely based on the impression or opinion of the individual consumer and the myriad of psychological and environmental factors that can influence their decisions. Organizational or Integrated Delivery Network (IDN) markets are focused on fulfilling the needs of the business while maximizing profits.
When comparing Independent and IDN Markets there are many ways in which the two systems operate differently. The most important being the decision-making process or more specifically the buyer. Independent buyers are typically individuals looking to make a purchase for personal gain. That may be due to a need such as food to eat, or a want such as a new car as a status symbol. Their choices will be influenced by social and economic experiences (what’s in it for me). IDN buyers are typically comprised of teams or departments responsible for making purchasing decisions. In general, no single individual makes an IDN business purchase decision. Often referred to as the buying center, this purchasing department will have several levels of processes and approvals. Examples are Deciders that define the requirements of the product but whose decisions must still be reviewed by Approvers. In contrast to the Independent Market, often the decision makers in IDN Markets may not be end users of the product they are buying.
Relationships are another area in which Independent and IDN Markets are different. While both markets require relationships or a connection between the buyer and the seller, IDN’s typically require stronger, deeper relationships. Independents have a need, they go to the store or online to make a purchase based on filling that need. IDN’s have more complex buying processes and often are making long-term buying decisions.
Both groups go through stages or phases of the buying process. While similar in overall nature, the actual steps can be quite different. Independents are generally in one of five consumer buying stages. The five stages are Problem recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post purchase behavior. IDN’s have a few more stages sometimes called buy phases. They are Problem Recognition, General Need Description, Product Specification, Supplier Search, Proposal Solicitation, Supplier Selection, Order Routine Specification, and Performance Review. Stages 4, 5, and 6 are the major difference between Independent and Business Markets. Rather than an individual going to a usual vendor and purchasing the product, a search of suitable suppliers is conducted by the buying center (typically the deciders). Bids from suitable vendors are collected, reviewed, and approved by buyers.
As one might expect with the differences in the cycles, timing is a major factor. In general, the buying stages in IDN markets are substantially longer. Even in the case of upgrades, where the vendor is already known, there is still a decision and buyer process that must take place.
In Sales, we follow a plan for approaching each of these types of markets. This plan or process is often referred to as the Sales Cycle (see image below). Planning is an important first step in any process. Making a plan and working the plan is important to achieving repeatable success. However, as Mike Tyson said, “Everybody has a plan until they get punched in the mouth." It’s what we do after or how we react to that punch that will decide what happens next.
- Marquis Woodard, Director of Sales, Houston