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Exposing the Myth of Rational Pricing Decisions

As pricing professionals in B2B, we believe that businesses make much more rational buying decisions than individual consumers. We understand that most companies have put a variety of processes and procedures in place to force greater rigor in buying decisions — multiple approvers, structured purchasing forms, multiple bid requirements, and so on.

Given the circumstances, it’s not difficult to imagine that most businesses will give more rational consideration to the purchase of a $4000 piece of equipment than most consumers will give to the purchase of a $40,000 car.

The mistake we often make, however, is a matter of degree…

We tend to overestimate the extent to which business purchases are rooted in logical distinctions and economic factors. Yes, business buying decisions may indeed be two or even three times more rational than consumer purchases. But even with those multipliers, the result is still a very long way from being perfectly rational.


All of those purchasing processes and procedures that businesses employ narrow the gap, of course. But as long as there are humans involved, factors other than logic and reason can’t help but play a significant role in decision-making.

And buyers aren’t the only humans we need to concern ourselves with. After all, our salespeople are human, too. As such, their decisions and behaviors aren’t entirely rational or logical, either. (Like I really needed to say that, right?)

The bottom line is that even in B2B, it’s important to recognize and address the psychological factors that are involved in pricing and purchasing decisions. In reality, when you’re dealing with two groups of human beings—buyers and sellers—logic, reason, and economics are just part of the equation.

And that part of the equation may not be as big as we think.

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