Today's blog post is by Christian Maurer, a consultant for B2B sales leaders wanting to improve the productivity of their organization with solutions based on modern philosophies.
Sales processes usually are linear representations of a sequence of activities a salesperson has to follow in order to be successful. While the sales process might provide guidance to the salesperson, it’s inadequate for monitoring the progress of a potential deal. In the end, it does not matter what the salesperson has done; buying happens when the customer has reached a certain state of mind.
So we have to take the customer’s buying process into consideration. Most descriptions of buying processes focus on activities from the customer’s point of view. Understanding what the customer is thinking with respect to a potential purchase is what really matters. Considering the buying process as a type of change-management process has inspired the following simple, cyclical, four-stage model.
The Four-Stage Buying Cycle
The model is cyclical to respect the trend that selling is no longer considered to be about closing deals, but opening relationships. In my mind, this means that selling can be represented only by a closed-loop model. Focusing primarily on the transition between the four stages (which represent shifts in a customer’s thinking) is a way to consider the buyer’s point of view.
A cyclical process does not have a start or end. To discuss the principle, it is helpful to start by regarding the customer as maintaining the status quo. The customer will leave this state only by acknowledging that a certain frustration is no longer tolerable.
This realization will trigger the next phase, when the customer tries to define a vision to remedy the frustration. In this phase, three things can happen: First, the customer, after further consideration, decides to maintain the status quo and live with the frustration or, second, an internal remedy is found. Only the third option, however, will trigger a continuation of the buying cycle: the customer decides that purchasing a remedy is preferable.
This second phase allows for the elimination of do-nothing opportunities. According to CSO Insights, about 20 percent of forecasted opportunities end up in this stage. So this allows for a huge improvement of forecast accuracy.
Now that the customer knows that remedies can be purchased, the next phase is to evaluate from whom to buy. The actual buying decision is at the end of this consideration. For many selling organizations, evaluating suppliers is the start of the actual selling process. Studies show that at least 80 percent of customers who reach this point will stay with the supplier that has helped them envision the remedy for their frustration. At the beginning of this phase in the buying cycle, requests for quotation (RFQs) are issued. For a seller entering the buying cycle at this stage – by answering the RFQ – the success rate is about 10 percent. This is further evidence that successful selling requires an earlier involvement in the buying cycle.
The loop is then closed at the fourth phase, when customers put the purchased remedy into use. While the seller considers the selling finished when the buying decision is made, the customer is finished buying only when he or she can actually verify whether the perceived value meets expectations. That is the fourth phase leading, then, back to a new status quo.
How I Use This Model
Monitoring the progress of a potential deal can be based on customer evidence. For this, one has to find a set of observable customer behaviors or statements associated with each transition from one phase to the other. The positive impact on forecast accuracy has already been mentioned.
This model also allows discussion about the type of messaging needed to help the customer come to the next stage of thinking. By using appropriate messaging, a salesperson becomes more relevant to the customer.
Discussions on marketing and sales alignment become more objective. The question now becomes, how do the two functions together help the customer make the transition to the next phase, instead of fight for supremacy over each other?
Finally, this model also helps when dealing with complex sales situations in which buying centers are involved. Salespeople can distinguish between the mind-shift of the individual members of the buying center and the institutional mind-shift, which occurs when the buying center members have come to a collective decision. This, again, impacts forecast accuracy.