Small U.S. businesses show a five-year near 40% drop in single-signoff expenditure thresholds.

i50 logoOur research into the buying behavior of almost 100 small companies in the U.S. shows that discretionary budget allowances – the amount at which a mid-management line manager or similar can approve a purchase without needing a second signature – has now fallen from an average $10,400 in 2008 to just $6,290 in 2013.*

Considering the median size of these small businesses was those with 32 non-manual labor employees (so removing many small warehouse, distribution and construction organizations and skewing the results towards office-based operations), this is a pretty significant finding. In five years that’s a near 40% reduction in a line manager’s budget autonomy.

The upshot is that the role of ‘influencer ecosystems’ is filtering down the purchase funnel, now affecting significantly more, and smaller, purchases than previously the case. Even fewer purchase decisions are being made alone.

This presents greater challenges to salespeople of course, because even if they do reach the decision-maker in a small organization that individual will now not be making up their mind on their own. The salesperson will need greater help in ‘closing off’ the members of any ad-hoc decision-making committee. Vendors will need to have reached, and influenced, these key influencers well in advance of any purchase decision being made.

This inescapable trend in small business buyer behavior further elevates the center-stage role now being taken by ‘influencer marketing’.

* Influencer50’s research comprised responses from 97 U.S.-based small businesses (less than 250 employees, not including manual or part-time labor), across five industry sectors – retail, manufacturing, services, technology, transport. Research conducted between Jun-Oct’13.

Leave a Reply

Your email address will not be published. Required fields are marked *