Buying Cycle – Moving to Decision and Purchase

Continuing the review of the customer buying cycle, this post explores the Decision and Purchase steps in the B2B customer buying process.

In the Decision step, the buyer evaluates the short list of potential solutions to determine which one to buy. The evaluation process usually includes a number of requirements for each potential vendor to qualify the suitability of their solution. Although not explicitly listed in the evaluation criteria, trust plays a major role during this decision process – whether the prospective buyer trusts the vendor company, product, salesperson and others they have met, to deliver what they want. Trust and credibility should have been developed by sales and marketing prior to this step and reinforced during the decision process.

Sales should be in control of all interactions with the prospective buyer at this stage and Marketing should support sales as needed:

• Remove the prospect from the regular outbound marketing process – coordinate specific marketing activity with sales to support the decision process
• Ensure that any inbound marketing processes are aware of the prospective buyer’s status should anything for that company come in
• Support sales with competitive intelligence, win/loss analysis, landmines to set and competitor landmine responses for the short list contenders
• Customer references are usually requested at this stage – proactively managing the references engagement process is critical to ensure a favorable review.

The prospective buyer could decide not to proceed with any purchase for a variety of reasons.

If the buyer does select your product/service/solution, the next step is to proceed with the Purchase step. Sales are in control of the purchase process and marketing should only engage with the prospective buyer as directed by sales. Although marketing are usually not directly involved with the purchase process, there are previous decisions from marketing and product management that significantly influence the purchase decision:

• Packaging – how the product/service/solution is packaged, sold/licensed, various buyer options, terms, conditions, etc.
• Pricing – how the product/service/solution is priced and current pricing.

Ensure that sales were previously trained on all aspects packaging, pricing and what aspects are negotiable or not. Getting feedback from sales and customers on any pros and cons of packaging and pricing should be part of your continuous improvement process to be responsive to changing market conditions and customer expectations.

Regardless of the outcome from the decision and purchase steps, be sure to collect win/loss data for learning, analysis and future use.

The next post looks at the Implementing and Implemented steps in the post-purchase phase of the customer buying cycle.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Buying Cycle – Interest, Research & Consideration

The previous post covered the first two steps of the buying cycle to move prospective buyers from the sidelines to awareness. This post explores the next three steps of Interest, Research and Consideration in the B2B customer buying process.

During the interest step, the prospective buyer makes the connection between a problem or opportunity and the need for a particular product/service/solution. This may happen from either direction:

• An internally known problem or opportunity that needs to be resolved. The prospective buyer initiates the interest. This is what most marketing and sales organizations tend to look for, but it may only represent a small part of all potential opportunities.
• An external source instigates the solution need for an overlooked problem or opportunity. Most companies have many unresolved problems and opportunities but don’t take action because of entrenched processes and/or daily workload priorities. If your marketing and sales outreach can instigate the interest, you’ll have the inside track for the sale.

Now that the prospective buyer has identified the need, the next step is research to determine the right product/service/solution for their needs:

• Internally, to determine and get agreement on the specific requirements of what would be the right solution for the problem or opportunity. Companies frequently use consultants, mavens or other trusted sources to assist with defining requirements. Marketing needs to ensure that these third parties have a good understanding of your solution.
• Externally, to determine a list of possible solutions and suppliers. This is usually a long list of all relevant possibilities. If you have educational and authoritative materials readily availability from multiple sources to support this research activity, you can shape the requirements to align with your value proposition.

Once the buyer has the requirements of what is needed and a long list of possible solutions and suppliers, they’ll move to the consideration step. This is where sales and marketing usually become actively involved with the prospect, but can also be a point of disconnect. The buyer wants to get more information, do comparisons and analyze which are the top 2 or 3 most suitable solutions to move into the next step for making a decision. Some common disconnects for sales and marketing to consider during this step:

• The buyer is looking for specific information which may only be accessible from your company after providing registration information on your website. If they register, does marketing respond to their specific circumstances or are they just dropped into the lead generation process?
• Sales want to get into selling mode, but what may be most beneficial for the prospective buyer is consultative guidance from industry/domain experts in your pre-sales organization. Showing the knowledge and expertise your company can provide is the most effective sales approach during this step.
• The buyer gets disconnected from the underlying business objectives with information overload during the comparison and analysis process. Discussions with the buyer should focus on the business problem or opportunity and the value your solution provides.

Interest, awareness and consideration are separate process in the buying cycle that buyers typically work through. Recognizing these steps in your marketing, sales and lead management processes can help you better connect with prospective buyers.

The next post explores the Decision and Purchase steps in the B2B customer buying process.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Buying Cycle – Sideline Goldmine

Last week I posted the first in a series blogs about how marketing and sales should engage with the customer’s buying cycle to uncover and align with opportunities from the prospective buyer’s perspective. This post delves into the first two steps of Sidelines and Awareness in the B2B customer buying process.

There are two distinct groups of prospective buyers with different characteristics:

1. Existing Customers who have bought something from you previously but are not considering any additional purchases.
2. Prospective Customers who fit your target market but have never bought from you before and not actively looking to buy anything related to what you’re selling.

The vast majority of your prospective buyers are on the sidelines not actively looking to buy anything related to what you’re selling. The opportunity is to move them to the next step of awareness using tactics such as:

• Monthly newsletters to existing customers and opt-in subscriber list that highlights the potential value of your various offerings.
• Educational white papers and eBooks to create awareness about the challenge or opportunity these companies face and potential solution approaches.
• Article marketing in relevant publications and online properties to create awareness and establish credibility.
• Regular webcasts with educational value to create awareness, develop thought leadership and establish credibility in the target market(s).
• Salesperson calls or visits to existing customers – not specifically to sell something – just being visible and engaged is a great way to generate awareness.

Prospective buyers in the awareness phase are aware of the general category or type of product/service/solution you are selling, but have not identified a need for it yet. The opportunity is to move them to the next step of interest:

• IMO, one of the most effective methods to stir prospective buyer interest is the “others like me” approach.
• Show them how other companies similar to theirs have solved problems and achieved greater success.
• Show them how others in roles like theirs have achieved personal recognition and success by making their companies successful.
• Use selected case studies and video testimonials specifically targeted to the interest you want to generate.
• Depending on the service/product/solution, assessment or benchmarking tools for prospective buyers to gauge themselves against best in class peers are also effective for generating interest to move to the next step.

What methods have you found to be effective for identifying and moving prospective buyers along the buying cycle in these early phases?

The next post explores the Interest, Research and Consideration steps in the B2B customer buying process.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

The Buying Cycle Disconnect

Talk to salespeople about their process to engage with prospective buyers and you’ll hear all about the sales methodology and sales life cycle they use. Marketing also has a life cycle for designing, developing, launching and executing campaigns plus another life cycle for managing, nurturing and distributing leads. These life cycles are all necessary and important.

However, these are all inside-out processes on how you want to engage with prospective buyers or how they should engage with you. That’s an unrealistic perspective.

Prospective buyers have their own buying life cycle that they will follow. Whether or not it’s a defined methodology, all B2B buyers will follow a similar process for acquiring whatever product/service/solution they need. Customers want to go through their buying life cycle processes and will buy when they are ready. You can achieve much better results by understanding and connecting with your prospective customer’s buying life cycle. I’m not suggesting you put the customer in the driver’s seat – sales still needs to manage and control the process, but to better align your marketing and sales processes with the buying cycle and the outside-in perspective.

Although buying cycles vary by industry, product, service, solution, etc. there are common processes that most buyers want to step through. The diagram to the right outlines the major steps in a generalized B2B customer buying process:

1. Sidelines – the vast majority of your prospective buyers are sitting on the sidelines, not actively looking to buy anything related to what you’re selling.
   
2. Awareness – prospective buyers are aware of the general category or type of product/service/solution you are selling, but have not identified a need for it yet.
3. Interest – the prospective buyer has identified a problem or opportunity that needs to be addressed and explores the issue in greater depth.
4. Research – the prospective buyer defines their requirements and actively researches a long list of possible solutions for the identified problem or opportunity.
5. Consideration – the prospective buyer finds suitable solution sources, gets more detailed information and does comparisons to compile a short list of possible solutions.
6. Decision – the short list solutions are evaluated in various ways including customer defined demonstrations, tests, in-depth analysis and other methods to find the most suitable solution. The buyer could also decide not to buy anything. Marketing is usually disengaged at this point.
7. Purchase – the purchase is made and everyone is happy for a fleeting moment. Sales usually disengage at this point.
8. Implementing – the implementation process to get the solution installed and working for the customer in the manner they expect. Vendor or third party professional services usually assist customers with this step.
9. Implemented – the solution is actively working for the customer. Vendor engagement with customers is primarily through support services from this point forward.
10. Achievement – the customer (hopefully) begins to realize the benefits they set out to achieve from the solution.
11. Loyal Customer – cultivating a satisfied and loyal customer has many benefits including additional purchases and referrals.
    

Although some of these steps in the buying cycle may seem beyond the interests of a marketing and sales discussion, I’ve specifically included them because they are frequently overlooked opportunities for marketing and/or sales to be engaged.

In the next several blog posts, I’ll delve into each step in more detail to explore how marketing and sales can engage more effectively and productively in the customer buying cycle to produce better results.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

How do you define Customer Value?

I’ve referred to customer value in several of my previous blog posts. The key point being that marketing should always clearly articulate the value of the product/service/solution within the customer’s context.

But what does ‘value’ within a customer context really mean and how do you define it? James Womack & Daniel Jones who popularized the Lean Enterprise business approach, define 6 attributes of customer value in their book ‘Lean Solutions: How Companies and Customers Can Create Value and Wealth Together’. Because these attributes of customer value are defined from the customer’s perspective, they can provide valuable insights for how we should position, message and market our products/services/solutions.

The 6 attributes of customer value defined by Womack & Jones along with my marketing perspective interpretations are:

1. Solve my problem completely – define exactly what customer challenges or opportunities your product/service/solution addresses, the extent to which it does, how it does it and how it works with other solutions. Don’t leave the customer in doubt or searching for additional information.
2. Don't waste my time – get to the point and don’t make the customer have to do things you want in order to get the information they want. Remember that their buying process takes precedence over your marketing or sales process – they’ll go somewhere else if you waste their time by making them jump through hoops to get information.
3. Provide exactly what I want – your product/service/solution should have packaging flexibility according to how customers want to buy, not how you want to sell. Make it easy for customers to buy just what they want right now – they’ll be more inclined to buy more subsequently.
4. Deliver value where I want it – clearly define at what point(s) in the customer’s business value stream your product/service/solution delivers value. Overly broad or vague claims of applicability and functionality don’t connect with specific customer requirements or how the customer envisions a solution that would benefit their business.
5. Supply value when I want it – not all your prospective customers are ready buy at the same time and definitely not immediately. The important issue here is to gear your marketing programs to the various time frames your prospective customers have for buying and helping them reach that point.
6. Reduce the number of decisions I must make to solve my problems – business customers buy something to solve a problem or pursue an opportunity. Offering too many choices, options and alternatives only makes things more complicated for customers to make a buying decision. Communicate with prospective buyers in their context and avoid unnecessary complications or decisions they need to make.

Remember that the interpretations for each attribute are just my views – think about how you would interpret these attributes to your circumstances.

“Value can only be defined by the ultimate customer’ – James Womack & Daniel Jones

Understanding and defining customer value is a key part of being outside-in as discussed in an earlier post. Considering these 6 attributes of customer value during our various marketing processes should help us connect more effectively with prospective buyers.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

You’re Selling What to Whom?

Here’s an interesting bit of low-cost research that could provide valuable insights into whether various people in your organization really understand your value proposition and market position. Ask two simple questions:

• What are you selling?
• Who are your buyers?

Start with the marketing and sales organizations. Ask the questions individually and record the answers verbatim. Doing this in person either face-to-face or on a phone call as an interview wherever you can provides additional insights to observe how people respond. A simple online survey can be used for people who can’t be reached personally. IMO, interviews are more effective than surveys for this type of research.

Besides providing the obvious measure of how well the market positioning, messaging and value propositions from marketing are understood, this little research project can yield interesting additional insights.

In response to “what are you selling?” IMO the only valid answers are those that describe what is being sold in the context of the value defined by customer. So, instead of the more typical answer of “I’m selling a world-class inventory management solution”, a customer value oriented answer might be “I’m providing our customers the means to increase their customer service levels by at least 10% without increasing their investment in inventory”.

"In the factory we make cosmetics; in the store we sell hope."
– Charles Revson (founder of Revlon Cosmetics)

The “who are your buyers?” is intended to determine who in your organization really understands the qualification characteristics of the right prospective buyers. Good answers should include the multiple dimensions of industry, market segment, company demographics, psychographics and buyer profiles of the individuals involved in making the buying decisions.

Ask the CEO, COO, CFO and other functional areas these same questions – you might be surprised by some of the answers.

For the only answers that really matter, ask your customers what value they perceived they were buying with your product/service/solution. Ask them who was involved in the decision process and why they made this choice.

You should have a lot of interesting data points and insights to reconcile from this project. Marketing is responsible for ensuring that the company has the right positioning, messaging and customer value propositions, but more importantly that everyone in the organization is in agreement and understands how this applies to their role.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Trying to get a handle on Company Psychographics?

I received several emails in response to my last post ‘Do Psychographics work in B2B Marketing & Sales?’ about developing psychographic profiles for market segments or companies to complement existing demographic data.

Given that psychographics classify prospective buyers by psychological attitudes such as aspirations, interests, attitudes, opinions, etc., how does this apply to companies when you’re in B2B marketing and sales? IMO, companies do project a psychographic image or behavior pattern that goes beyond normal demographics – take IBM as an example signaling moving to a services-oriented business earlier this decade, followed by on-demand computing services mid-decade and the current focus on sustainability. For suppliers selling to IBM, those are powerful signals of what and how to position their solutions to IBM relative to how the company views itself in the market.

One email came from an ex-colleague and business acquaintance Charlie Allieri who is co-founder of iLantern, a provider of Sales Knowledge Management services. iLantern provides a service that monitors events associated with targeted companies to produce information alerts that signal activities that can influence sales opportunities at those companies. These events include executive staff changes, executive quotes, mergers, acquisitions, product announcements, alliances, awards, sales deals, business expansion, and many others.

Charlie’s point, within the company psychographic discussion, is that if marketing and sales were to analyze this event information more strategically, they could build a very insightful psychographic profile of their major customer and prospect companies. iLantern services primarily provide salespeople with really valuable and actionable current information and insights in their accounts, Charlie makes a good point that this information can also provide more strategic insights for marketing. Applying the information from a number of companies in a particular vertical industry or market segment can glean additional industry insights that are not reflected in any demographic data.

“No great marketing decisions have ever been made on quantitative data” – John Scully

Another really interesting part of the iLantern service for marketing is that you can automatically associate specific marketing materials and messaging with designated events for sales to take action. So, if a particular event occurs at a company in a target market segment, the service can alert the salesperson to invite the relevant person to a webinar, or send them a white paper, or mention a specific solution, or any scenario you wish to define. The salesperson gets the alert with a predefined script and email with the designated material(s) to contact the person in question at that company.

Company psychographics can give you a competitive edge in today’s tough market by identifying company events that signal a potential opportunity or to stop wasting time and resources on companies sending the wrong type of signals.

What do you think about this type of approach for developing and using company psychographics? Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com