Godin’s hierarchy of business to business needs

The problem with the Chicago school of economics isn’t so much its belief in rational decision-making — we can save for another day the computational complexity arguments against such precision in our thinking. Rather, it’s that it is too easy to misjudge what people are optimizing in their decisions.

How many times have you looked at something a large organization does and remarked to yourself, “Yikes, that seems a little irrational.”

The irony is that there is rational decision-making happening in a lot of those scenarios. But the decisions are made by individuals who are naturally optimizing their own success and happiness — which all too often diverges from the higher order function of the organization as a whole (i.e., maximizing shareholder value). This is why truly great organizations work so hard at aligning the interests of their employees with their mission, and it’s definitely not easy.

Seth Godin wrote a terrific post this morning on a hierarchy of business to business needs that proposes an outline of the needs B2B buyers must satisfy when considering making a purchase:

1. Avoid risk
2. Avoid hassle
3. Gain praise
4. Gain power
5. Have fun
6. Make a profit

Note that “make a profit” is dead last.

I found this to be so right on — and so important for B2B marketers to keep in mind — that I decided to sketch a quick illustration of it above. (My apologies to Seth Godin who certainly deserves a better illustrator than me.)

Reminds me a lot of the groundbreaking research that Gord Hotchkiss covered in The BuyerSphere Project, studying how businesses buy from other businesses in the age of the digital marketplace. (Excellent — and free — book if you haven’t read it yet.)

Of course, it’s not just useful for B2B marketers to keep this in mind. The real challenge is managing the way this stack of needs is entangled in your own organization’s mission.