Taking the Pulse of Industrial BuyersTaking the Pulse of Industrial Buyers

Taking the Pulse of Industrial Buyers Transcript:

Jeff White: Welcome to the Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White, and joining me today is Carman Pirie. Carman, how are you doing, sir?

Carman Pirie: Look, I’m happy to be here. How are you doing?

Jeff White: I’m doing great.

Carman Pirie: Nice.

Jeff White: Yeah. Really excited to introduce. What we’re gonna talk about today, because it’s been a labour of love here at Kula for a number of months.

And it’s finally getting around to releasing this amazing piece of new research. And I guess we wanted to record an episode to talk about what. That research is about and why it’s important.

Carman Pirie: Yeah. Yeah. Look, we don’t need to be mystical about it, for our listeners, so the latest initiative here is what we’re calling the Industrial Buyer Pulse, and that is a quarterly research initiative designed to really take the pulse of the industrial buyers throughout North America. How are they feeling? How confident are they? How are they researching suppliers? How are they shortlisting potential partners? And, how are they using digital tools to enable that journey?

So I guess before we dive too far into the research, the Industrial Buyer Pulse research, I think it’s helpful to talk about why we started to do this, Jeff, ’cause it’s easy, I think, for marketers to get research that shows them what other marketers are doing. I think it’s easy for marketers to get research that shows them what’s new or emerging technology, or what’s around the corner, emerging use cases for new marketing tech, or what have you.

And it seemed to me that in all of that kind of ecosystem of information and research that we can ingest as marketers, there seemed to be a bit of a lack of how the people who actually buy are feeling. What are they…what’s driving their behavior? The people that marketers have the behavior that the marketers are trying to change, ’cause one of the unique things about, now not all, B2B manufacturers, it should be noted. But an awful lot of B2B manufacturers sell to other manufacturers a lot. A lot of industrials sell to other industrials. And the idea of keeping your finger on that pulse just seemed pretty important.

Jeff White: And I think we should talk a little bit about the structure of the research. We had 262 respondents, I believe…

Carman Pirie: 263, in fact.

Jeff White: 263 late arriving entry. A broad swath of organizations, too. It tended a little bit more to the small and medium-sized manufacturers, but certainly some large ones as well. And a cross section of people in purchasing, C-suite managers, plant operations, the kinds of people that marketers talk to on a regular basis, all really want to get to know better.  

Carman Pirie: Yeah, absolutely. And look, I should note that we partnered with IMR B2B Market Research company on this to do the field work for the survey and to implement a number of fraud controls and things of that sort to ensure that the data that we were getting is accurate.

But Jeff, you’re quite right. Covering a multitude of different-sized organizations as well as different roles within them. And the research really seeks to look at the market through that buyer-first lens across four broad categories. And as this research unfolds over the coming years and quarters, you’ll notice that we’ll be keeping four of the questions within the survey the same.

Tracking a consistent set of measures but also leaving room within the four broad areas of inquiry to introduce new queries, new questions to understand different dynamics of buying behaviour. So I guess it would be helpful to note just what those categories are. Buyer confidence is one of them, a series of questions to assess the relative confidence of industrial buyers and how that’s being reflected in CapEx budget expectations. The next is around an industrial supplier, basically, research. How are they finding suppliers, and how are they not just researching, but selecting suppliers? The third area is digital enablement. How is that journey being enabled via a variety of different digital technologies? And lastly, supply chain health. How are they thinking about their supply chain resilience, and what kind of as marketers, of course, what we’re looking at is what are the messages that are likely to resonate or not as a result of how they’re thinking about their supply chain health. So, four broad areas of inquiry and some fascinating results from this first quarter, I must say.

Jeff White: Yeah. Let’s start at the beginning with how confident are buyers? We’re in this extremely topsy-turvy kinda world at the moment, and yet we’re seeing some pretty interesting results here in terms of buyer confidence.

Carman Pirie: Look, and I think some of this may actually be a result of the somewhat on certain dynamics in the first six months of the year. But a full 88% of industrial buyers surveyed believe that their CapEx budgets over the following 90 days are going to grow. And what was surprising here, too, Jeff, there was just almost no downside sentiment. Optimism was high across the board. And I guess that first and foremost, I think that’s just really interesting given the macroeconomic climate we find ourselves in. Perception that not all respondents were, I say there were relatively no downside sentiments, and that’s true.

But the job function certainly impacted it. Operations tended to be a little bit more pessimistic. And the size of the organization tended to impact the level of optimism, with small and medium-sized manufacturers displaying considerably more optimism than large enterprises. But again, this is a question of degree, not kind. They were all optimistic. It’s just a matter of a bit of optimism, but when you have such an overwhelming buyer confidence index, it’s quite something.

Jeff White: It seems certainly very positive for manufacturers moving forward. If they can depend on their buyers to have the available budgets and the desire to spend on CapEx.

It’s certainly really important.

Carman Pirie: Yeah. It’s also important, I think, for marketers to be mindful that there are times when this isn’t the case. There are times when budgets are really tightening, and your messaging needs to shift a little bit, too. Maybe you need to nurture deals longer or find ways for those deals that will inevitably be paused to not be killed as a result of that pause, but still be somehow kept on life support so that when things do turn around, they re-engage.

But in this instance, it’s really the opposite. When you see a push like this coming into the last half of the year. Especially if you’re selling more to small and midsize industrials, I would suggest you should be maybe being a little bit more sales heavy in your messaging, a little bit more immediate, recognizing that these purchases are happening sooner versus later.

Jeff White: And what’s really interesting about all of this is that in many cases, the buyers that we spoke with. They’re bypassing sales teams, and they’re shortlisting their vendors. 82% have said that they shortlist vendors and suppliers for a major purchase before ever speaking with them. This has massive ramifications for how those sales teams actually go to market. And you know how they’re thinking about this because they have some very informed buyers on their hands when they’re finally getting to speak to them.

Carman Pirie: Yeah. I think it was a really surprising stat from the research. I think we instinctively understand and know that an awful lot of the buying journey is happening before sales are brought into the conversation. I think that’s something that sales organizations have been struggling with, and again, marketers in some ways know intuitively, but I think it’s important to put some numbers to that reality.

Jeff White: I think the other thing that’s really interesting about the level of research that buyers are doing before engaging with sales is also how they’re doing it.

They’re not necessarily using the newest tools. They’re leveraging AI. They’re actually looking for things, using things other than Google.

Carman Pirie: Yeah, this is where getting into the depth of the research, I think, will be very helpful for listeners. I encourage you to download it and get into the nitty-gritty of how different roles are engaging with supplier information, where they’re going first.

Yes. We saw that AI usage was huge. Well over 80% of industrial buyers reported using AI to research vendors. You know that in and of itself is compelling. But what’s interesting is, we saw really trade shows surprisingly not that high up the list. They show some staying power. For instance, the most senior executives are the ones who depend the most on supplier websites for that information and that buyer validation. So the long and short of it, Jeff, is I think when you go back, the layers of the research and selection research that we did, it shows that a lot of it’s happening before sales is ever aware and the way the channels that marketers need to use to get to those buyers pre-sales varies greatly depending upon where they sit in the organization and the hierarchy.

Jeff White: And I think the other thing that’s important not to miss on this is that if your site is not ready for generative search, if it’s not being found in ChatGPT or Claude or any of the other tools, you really need to invest in that. You need to ensure that all of your content is marked up with the appropriate schema. Setting up product pages in the appropriate way so things can be found and machine-read like these are, we can’t sleep on this. We need to get that done.

Carman Pirie: Quickly becoming table stakes, isn’t it?

Jeff White: Yeah. And there wasn’t that long ago when most people were just wondering how they show up in the snippets in Google, let alone the Gemini results, and yeah…

Carman Pirie: Exactly right. Yeah. Hopefully, people review the research, and it lights a bit of a fire under them on that part. Really, you can’t, like you said, you can’t sleep on that. 

Jeff White: No, and it’s coming to life for a lot of buyers in terms of how they want to be served as well. They’re looking for really advanced self-serve capabilities. The number of people who are actually willing to make a very significant purchase online without ever talking to anybody. There’s more than you’d think, and the number’s higher than you’d think. 80% of people are willing to spend $50,000.

Carman Pirie: And 77% of industrial buyers report that they use digital self-serve tools to obtain lead times, pricing, et cetera, from a supplier versus talking to somebody in the organization. So you’re quite right. Yes, how we’re finding organizations is changing. AI has certainly turned that a bit on its ear. But we also need to be mindful of all of the other discovery channels that we need to be present in. But then it’s not just about being present, it’s frankly about being able to, being willing to carry that digital experience all the way through an industrial purchase, over $50,000 entirely online. I can’t imagine there’s anyone listening to this that would’ve guessed 80% of industrial buyers would agree to that.

Jeff White: No, I can’t imagine. In fact, most would say nobody’s going to spend that much online. But no, it, yeah…

Carman Pirie: They’ll buy the supplies for something that was $50,000, but they won’t buy the $50,000 thing. That’s just not true, actually.

Jeff White: No. It turns out that you really do need to have a site that can perform at that level and inspire confidence in somebody who’s actually using it. If you’re going to make a purchase like that, you need to feel that the site is wholly secure. It needs to communicate everything about how the purchase works. It needs to accommodate those special cases and requirements of a B2B purchase. There could be POs and other information that’s not part of a typical checkout. So it really is the case that the site needs to be up to the challenge of performing at that level.

Carman Pirie: And I think one of the ways that we can maybe begin to get up to that challenge without maybe enabling e-commerce for an awful lot of manufacturers is on that digital self-serve, that digital enablement side of things before, pre-com, there’s so many opportunities to help buyers make better decisions, find out additional options, et cetera, by serving them with digitally native selection tools and things of that sort. And, I guess thinking about the customer experience through that digital lens, not just from an information gathering perspective, but from how do we make the site do something for somebody, not just tell somebody something.

I think it’s, I don’t know, strikes me, Jeff, as a good first step, if you’re an organization staring down the barrel of that 80% are willing to do e-comm orders, thinking that’s really intimidating. At the very least, self-serving, providing a level of digital self-service that ends up pushing somebody to a member of your sales organization to complete the transaction, isn’t the worst.

Jeff White: No. Exactly, and those, it does speak to the requirement for those, quoting calculators and other components that are maybe a little easier to roll out than fully calm. But they have to be accurate, and they have to; they can’t just be like something to snag somebody’s email address and hopefully get them in the funnel. It needs to be a valuable, useful, usable tool that makes that experience better and gives the buyer confidence.

Carman Pirie: That’s a great point because our research did show that people are using this to get lead times to get pricing that they then use to inform their short list and to form what’s next. It’s not like they’re, the next natural step is for them to validate it with somebody from the organization. No. So it needs to be robust. The last pillar that we talked about in this research is around the supply chain and some related supply chain health, et cetera. And look, we’re Canadian, so we’re going to bring a bit of a skewed perspective to this. How could we not?

In terms of, obviously, tariffs have been a large part of the geopolitical conversation in Canada for the last while, in the second Trump administration, and I guess in some ways I expected, Jeff, that we would see some more uncertainty from a supply chain perspective.

And in some ways, we saw just the opposite. We saw an awful lot of confidence that primary suppliers would meet their deadlines. It just seemed to me that the climate of fear and uncertainty that we had during COVID was around supply chains. I’m not saying, I’m not going to say it’s gone away, but my goodness, is it very different from what it was once?

Jeff White: I have to wonder, is it that we learned during COVID? This is an incredibly important thing, and we really need to shore up our supply chains. And so manufacturers have worked to do that. Is that what’s causing the confidence in the supply chain that we’re seeing as a result of the Industrial Buyer Pulse?

Carman Pirie: We are seeing safety stock levels fairly high, on average, almost seven weeks. That would point to some built-in resilience. I suppose if things do go a little sideways, that’s not exactly just in time inventory when you’re thinking about a safety stock like that.

Jeff White: No, for sure. And it’s probably changed the layout and format of an awful lot of warehouses around the world.

Carman Pirie: Yeah, so you’re probably right. Some of that was probably some kind of learning during COVID. I think the thing from the marketer, I know an awful lot of organizations that did things like and they really leaned into them hard during COVID, things like on-time guarantees.

Even one organization comes to mind. They offer basically that if they don’t deliver on time, there’s a penalty structure around it. And, in an environment where people are challenged to get their deliveries on time and are concerned about their supply chain health, those kinds of promises resonate.

But now I guess my inclination, if I were advising those same organizations, would be, maybe don’t lean on that crutch a whole lot because. I just don’t know how I’m… you’re not speaking to an established pain point anymore.

Jeff White: Yeah. It may not be the differentiator it once was. Yeah.

Carman Pirie: Yeah. You’re like, okay, we can deliver on time. And they’re sitting there thinking, yeah. And so can everyone else. Yeah.

Jeff White: Yeah. Also, we have the best service and the best people. Yeah. Great. Another thing that’s just table stakes, and we gotta figure out how to get better than everybody else,

Carman Pirie: But it is worth noting that we are seeing high freight costs and regulatory changes as being the top factors, in addition to customs delays, as things that industrial buyers feel could disrupt their supply chain. I don’t wanna let tariffs off the hook. There’s an uncertainty that’s lingering from them that is being felt within the category. There’s no question.

Jeff White: Absolutely. Those are the four pillars of the Buyer Pulse Research. Really looking forward to sharing this with everybody and hearing what people think. And looking to inform the next round of research as well. Let our listeners know where they can find the industrial buyer pulse, and we look forward to hearing people’s thoughts on it.

Carman Pirie: Yeah. So you can go to kulapartners.com. You’ll find the Industrial Buyer Pulse will be highlighted on the homepage there. And you can download from there. What you’ll get is a 28-page or so report that dives into this research in more detail than we’ve obviously covered here in this podcast. I really encourage you to download it, because you’ll be able to see some more of the nuances around how company size and role, et cetera, impact the thinking around these four broad categories that we’ve discussed today. And I think it’ll help you in some ways, shape, and form your go-to-market planning for the next quarter. And our goal is to continue to do this every quarter to provide this, if you will, as an always-on digital readout for manufacturing marketers who are targeting industrial buyers. I look forward to you all getting some benefit out of it, and hoping to shape future waves.

Jeff White: Awesome. Thanks so much, mate.