Modelling the Customer Buying Process

Startup marketers need to develop a deep understanding how prospects move through the buying cycle when structuring a marketing plan that drives customer acquisition. Mapping this process requires an understanding of the stages that a customer moves through from not understanding that they have a problem through to purchase, and renewal as well as what will either speed up or slow down the customer as they move through the process.

The explicit stages will differ somewhat from company to company but in general, the process looks like this:

For each of these stages you have Accelerators and Friction points. Accelerators are things that help move people from one stage to the next. Friction point are things that can delay a prospect from going from their current stage to the next one.

For example, if I was looking at purchasing CRM software for my business here’s the stages I would pass through:

No Need – I am managing my contacts on a spreadsheet and I think that works just fine. To get to the next stage I need to understand what a CRM tool could do that I can’t do in a spreadsheet.

Need – I now understand that I have a need. That may have happened because my customer base got bigger and dealing with a large spreadsheet is getting hard. It may be that I am looking to capture transactional information about customer interactions and storing that in notes is hard. It could be my sales team is growing and sharing a spreadsheet is hard and impractical. I’m not actively looking at different solutions yet – maybe because I think the spreadsheet is good enough, because I’m worried CRM tools are too expensive or that there will be a lot of work involved in getting my spreadsheet into a CRM tool.

Evaluation – I’m now looking at solutions. The pain has become acute enough that I’ve started thinking about how I might address it. At this stage I will be making a short list of solutions (maybe) and thinking about what I specific things I need that solution to do. I may never make it past this stage if I don’t come across solutions that seem to work for my business or if I can’t figure out how I might decide which CRM tools should make my short list.

Buy – At this stage I’ve decided which CRM solution I am going to purchase and I’m executing the transaction. I might not move past this phase with a specific vendor if I keep delaying the purchase either because I don’t have the budget to buy right now or I think I might be able to get it cheaper at another time or if purchasing it is a hassle in some way.

Enjoy – At this stage I’ve purchased and trying to use the product. I may or may not end up actually using it in my company depending on the user experience, customer service, or how hard it is to get my sales reps to start actively using the product.

Renew – This is where I am signing up for the next term to use the product or renewing my maintenance agreement. I may not decide to do this if I never ended up using the product or haven’t really seen the value I hoped to see out of using it.

Once you have the buying cycle modeled you need to figure out the metrics that will track how prospects are flowing through the process. Those metrics will give you an idea of where prospects are getting stuck and where you might want to focus some effort.

10 thoughts on “Modelling the Customer Buying Process”

  1. This is very important stuff, in fact some of the most important work that marketers need to do to accelerate their growth.  I am grateful that a brilliant VC looking at funding my last startup (Eloqua) encouraged me to take some time off from being a CEO and drill down deep into the mechanics & logistics of how people bought our software.  Once we understood this process, we could be much more focused in our marketing efforts, knowing more about who to focus our resources on and in what ways.  We especially became attuned to the importance of influencers and advocates in the buying process – so much so that I started a new company, Influitive, with the goal of maximizing a company’s ability to deploy these people to accelerate a purchasing process as much as possible.

    Once the buying process has been modelled as April has shown, what was most effective for us is looking at “best-in-class buying processes” – big deals that closed in a week as opposed to 3+ months.  Why did these close so fast? Which stages were accelerated the most, and what was used to convert so quickly?  In which segments is the perception of value the greatest? So much insight resulting from these questions – and so few startups take the time to figure it out. 

    1. Hey Mark!
      Thanks for the comment. I had a couple of really interested conversations with startup founders after my talk today at Startup Festival about exactly what you are talking about. There are always ways to accelerate the buying cycle but you need to break down the steps and figure out where prospects are getting stuck and what you can do to move them through the process faster. I think it’s easy to get overly focused on putting prospects into the front of the funnel when there are places in the later stages where folks are getting stuck, or worse, dropping out. Marketing’s focus shouldn’t just be getting them into the process it should be helping prospects do whatever they need to do to get to a purchase decision.
      A

  2. Pingback: The Customer Buying Cycle by April Dunford | Jelmer de Jong

  3. April and Mark, thanks for a great post and comment. Too many startups and other businesses don’t make this kind of analysis a priority. That can be OK if the management team, in their day-to-day work, is intimately involved with customers, and understands their needs, desires, thoughts and motivations intimately. I saw this happen in an innovative construction company client. But in my limited experience, this rarely happens in software companies, which are more involved in development problems than in customer interactions.

    April, I’m bookmarking this page. Thanks again.

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  5. Pingback: The Customer Buying Cycle by April Dunford – Jelmer's Blog

  6. The explicit stages provide a good framework for thinking about your buying cycle. I recommend visiting http://www.buyingcycle.com to understand some of the tactics and strategy for optimizing the buying cycle for your marketing initiatives.

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