Purchase Decision Maker

Purchase Decision Maker is a critical concept in the Jobs to be Done (JTBD) framework that identifies the individuals or entities who make the final decision to purchase solutions that help job beneficiaries get their jobs done. Understanding purchase decision makers is essential for portfolio companies to develop effective marketing, sales, and product strategies that accelerate growth and create equity value.

Definition and Role in the Market

A purchase decision maker is the individual or entity that decides which solution to purchase for job beneficiaries and job executors. They control the financial resources and have the authority to approve or reject spending on solutions that help get jobs done.

In the JTBD framework, purchase decision makers are distinguished from:

• Job Beneficiaries: Those who directly benefit from getting the job done
• Job Executors: Those who help the beneficiary get the job done with current solutions

This three-role distinction provides a complete picture of the customer ecosystem and is crucial for developing comprehensive growth strategies.

Purchase Decision Makers Across Market Types

The identity and influence of purchase decision makers vary significantly across different market types:

Consumer Markets

In consumer markets, the job beneficiary, job executor, and purchase decision maker are frequently the same person. Individual consumers benefit from getting jobs done (like getting to destinations on time, creating moods with music, or sharing memories), execute these jobs themselves, and make their own purchase decisions.

However, there are important exceptions where purchase decisions are made by someone other than the job beneficiary:

• Parents make purchase decisions for products used by their children
• Household financial managers may make purchase decisions for products used by other family members
• Gift purchasers make buying decisions for products that beneficiaries will use

In these cases, portfolio companies must address both the needs of the job beneficiary and the concerns of the purchase decision maker to succeed.

Business Markets

In business-to-business (B2B) markets, purchase decision makers are often distinct from both job beneficiaries and job executors:

• Finance or procurement executives may make purchase decisions for solutions used by other departments
• IT departments may control purchasing for technology solutions used throughout the organization
• C-suite executives may make final decisions for major investments that affect multiple departments

The B2B purchasing process typically involves multiple stakeholders, with purchase decision makers having final authority based on budgetary control and organizational responsibility.

Medical Markets

Medical markets present perhaps the most complex relationship between job beneficiaries, job executors, and purchase decision makers:

• Patients are job beneficiaries who need to get health-related jobs done
• Medical professionals are job executors who help patients get these jobs done
• Insurance companies, hospital administrators, or government agencies are often the purchase decision makers who determine which solutions are approved for use

This separation creates unique challenges for portfolio companies in medical markets, as they must satisfy the needs of beneficiaries and executors while meeting the requirements (particularly around cost, evidence, and compliance) of purchase decision makers.

The Purchase Decision Job

A key insight in the JTBD framework is that purchase decision makers have their own job to get done: making optimal purchasing decisions for their organization or household. This "purchase decision job" is distinct from the functional job that the product or service helps the beneficiary accomplish.

The purchase decision job typically includes steps such as:

1. Identifying Needs: Determining what solutions are required to help beneficiaries get their jobs done
2. Researching Options: Investigating available solutions in the market
3. Evaluating Alternatives: Assessing the relative merits of different solutions
4. Justifying Decisions: Building internal consensus and approval for purchase decisions
5. Negotiating Terms: Securing favorable pricing and conditions
6. Managing Risk: Ensuring that purchases meet quality, compliance, and security requirements
7. Measuring Impact: Assessing the return on investment from purchases

Understanding this purchase decision job is essential for portfolio companies to effectively engage with purchase decision makers and increase their sales close rates.

Key Motivations of Purchase Decision Makers

Purchase decision makers are influenced by a range of factors that may differ from the concerns of job beneficiaries:

Financial Considerations

• Return on Investment (ROI): Will this solution deliver sufficient value relative to its cost?
• Total Cost of Ownership (TCO): What are the full lifecycle costs of this solution?
• Budget Alignment: Does this purchase fit within allocated budgets?
• Cost Reduction: Will this solution help reduce costs in other areas?

Risk Management

• Implementation Risk: How likely is this solution to be successfully deployed?
• Vendor Stability: Is the provider financially stable and likely to provide ongoing support?
• Compliance: Does the solution meet regulatory and policy requirements?
• Security: Does the solution protect sensitive data and systems?

Organizational Fit

• Integration: Will the solution work well with existing systems and processes?
• Scalability: Can the solution grow as our needs change?
• Sustainability: Is this a long-term solution or a temporary fix?
• Support Requirements: What internal resources will be needed to maintain this solution?

Strategic Alignment

• Business Goals: Does this solution advance our strategic objectives?
• Competitive Advantage: Will this solution help us outperform competitors?
• Innovation Support: Does this solution enable new capabilities?
• Organizational Transformation: Will this solution help drive needed changes?

Portfolio companies that address these motivations in their product design, marketing, and sales approaches are more likely to win purchase approval from decision makers.

The Purchasing Process and Decision Criteria

The purchasing process typically involves multiple stages, with purchase decision makers playing different roles at each stage:

Early Stages: Problem Recognition and Information Search

In early stages, purchase decision makers may:

• Define budget parameters
• Establish high-level requirements
• Delegate initial research to job beneficiaries or executors
• Set evaluation criteria

Middle Stages: Evaluation of Alternatives

As options are considered, purchase decision makers typically:

• Review shortlisted options
• Assess competing solutions against established criteria
• Consider recommendations from job beneficiaries and executors
• Conduct formal evaluations or trials
• Negotiate with vendors on price and terms

Final Stages: Purchase Decision and Implementation

In the final stages, purchase decision makers:

• Make the final selection among options
• Secure necessary internal approvals
• Negotiate final contract details
• Approve budget allocation
• Establish success metrics for the implementation

Understanding this process helps portfolio companies align their sales and marketing activities with the needs of purchase decision makers at each stage.

Challenges in Engaging Purchase Decision Makers

Portfolio companies often face several challenges when engaging with purchase decision makers:

Visibility and Access

Purchase decision makers, especially in larger organizations, may be difficult to identify and access directly. They often rely on recommendations and research from others in the organization, making it challenging for vendors to directly influence their thinking.

Competing Priorities

Purchase decision makers typically evaluate multiple competing investment opportunities simultaneously. Portfolio companies must demonstrate not just that their solution is valuable, but that it represents a better use of limited resources than alternative investments.

Risk Aversion

Purchase decision makers often face greater consequences for failed purchases than rewards for successful ones. This can create a bias toward established vendors and conservative solutions, creating challenges for innovative products.

Misalignment with Beneficiaries

Sometimes purchase decision makers prioritize factors (like cost or standardization) that conflict with what would best serve job beneficiaries. This can create situations where superior solutions from a job execution perspective are rejected for financial or organizational reasons.

Strategies for Engaging Purchase Decision Makers

To overcome these challenges and effectively engage purchase decision makers, portfolio companies can employ several strategies:

Value Demonstration

• Quantify the ROI of the solution in terms meaningful to purchase decision makers
• Provide case studies showing successful implementations in similar organizations
• Offer proof-of-concept pilots with clear success metrics
• Present economic value analyses that go beyond product pricing to show total impact

Risk Mitigation

• Implement graduated adoption approaches that minimize upfront commitment
• Provide comprehensive implementation support and change management resources
• Offer guarantees or performance-based pricing models
• Share detailed security, compliance, and integration documentation

Stakeholder Alignment

• Equip job beneficiaries and executors with materials that help them make the case to purchase decision makers
• Develop multi-audience messaging that addresses the concerns of all stakeholders
• Facilitate internal consensus-building through shared evaluation frameworks
• Align solution positioning with organizational strategic initiatives

Relationship Development

• Invest in thought leadership that addresses purchase decision makers' strategic concerns
• Participate in events and forums where purchase decision makers seek information
• Develop relationships based on ongoing value provision, not just transaction pursuit
• Create customer advisory boards that include purchase decision maker perspectives

Purchase Decision Makers in Product Design

Understanding purchase decision makers should influence not just marketing and sales approaches but also product design:

Must-Have Features

Portfolio companies should include features specifically designed to address purchase decision makers' concerns:

• Administrative controls and governance capabilities
• Detailed analytics and reporting for ROI measurement
• Security and compliance certifications
• Integration capabilities with standard enterprise systems
• Scalability features that support organizational growth

Documentation and Support

Products should be accompanied by materials that support purchase decision makers:

• Implementation guides and success methodologies
• Risk assessment frameworks
• Total cost of ownership calculators
• Security and compliance whitepapers
• Integration architecture documentation

Pricing and Packaging

Pricing models should align with purchase decision makers' preferences:

• Options that fit within standard budgeting processes
• Scalable pricing that grows with value realization
• Packaging that aligns with organizational structures
• Flexible consumption models that reduce upfront commitment

Purchase Decision Makers in thrv's Methodology

thrv's proprietary Jobs to be Done methodology includes specific approaches for analyzing purchase decision makers and incorporating this understanding into portfolio company strategies:

Purchase Decision Job Analysis

thrv helps portfolio companies analyze the purchase decision job in their specific markets, identifying:

• The steps purchase decision makers take when evaluating solutions
• The needs purchase decision makers have within these steps
• The underserved needs that represent opportunities for differentiation
• The emotional jobs that influence purchase decisions

Multi-Audience Strategy Development

thrv's methodology ensures that portfolio companies develop strategies that address all three key roles:

• Job beneficiaries who define fundamental market demand
• Job executors who implement solutions
• Purchase decision makers who control buying decisions

This multi-audience approach ensures that products create value for beneficiaries while addressing the requirements of purchase decision makers.

Sales and Marketing Optimization

thrv helps portfolio companies optimize their go-to-market approaches to effectively engage purchase decision makers:

• Messaging frameworks that address purchase decision makers' concerns
• Sales playbooks that guide engagement throughout the purchase process
• Content strategies that establish credibility with purchase decision makers
• Lead scoring models that incorporate purchase decision maker characteristics

The Strategic Value of Purchase Decision Maker Analysis

For portfolio companies, understanding purchase decision makers delivers several strategic benefits:

Accelerated Sales Cycles

By proactively addressing purchase decision makers' concerns, companies can reduce friction in the sales process and accelerate deal closure.

Higher Close Rates

Solutions designed with purchase decision makers in mind are more likely to receive final approval, increasing the percentage of opportunities that convert to sales.

Reduced Price Sensitivity

When portfolio companies clearly demonstrate value in terms relevant to purchase decision makers, they face less pressure to compete on price alone.

Expanded Deal Sizes

Understanding purchase decision makers' organizational perspectives often reveals opportunities to expand solution scope and increase deal values.

More Predictable Revenue

Strong relationships with purchase decision makers contribute to more reliable forecasting and stable revenue streams.

Competitive Differentiation

Many competitors focus exclusively on job beneficiaries, creating opportunities for portfolio companies that effectively address purchase decision makers' needs as well.

Purchase Decision Makers Across the Customer Lifecycle

The influence of purchase decision makers extends beyond initial purchase decisions to affect the entire customer relationship:

Initial Purchase

Purchase decision makers control the initial buying decision, evaluating options against organizational criteria and determining which solutions to adopt.

Expansion and Growth

As initial implementations demonstrate value, purchase decision makers determine whether to expand usage, add capabilities, or roll out solutions to additional parts of the organization.

Renewal and Retention

Purchase decision makers periodically reassess existing solutions, determining whether to continue investments or explore alternatives.

Advocacy and Reference

Satisfied purchase decision makers can become powerful advocates, influencing peers in other organizations and providing references that accelerate sales to new customers.

Portfolio companies that develop strategies addressing purchase decision makers at each stage of this lifecycle create more sustainable growth and greater long-term equity value.

Conclusion

Purchase decision makers play a critical role in the success of portfolio companies, controlling access to resources and determining which solutions organizations adopt. By understanding purchase decision makers as a distinct audience with their own jobs to be done, portfolio companies can develop more effective products, marketing approaches, and sales strategies.

The thrv methodology provides portfolio companies with structured approaches to analyze purchase decision makers, understand their needs, and develop solutions that satisfy job beneficiaries while addressing purchase decision makers' requirements. This comprehensive approach accelerates growth, increases close rates, and ultimately creates greater equity value with reduced risk.