Understand the Buying Process

As entrepreneurs, we are focused on closing the deal. With experience, we take a broader view and put the customer’s best interest ahead of our own, knowing that what is best for the customer is also best for our own business.

The key to acting in our customer’s best interest is to know what they need at various points in the buying process. If an entrepreneur makes a mistake here, it’s almost always because they see the world from their own point of view rather than from their customer’s. Look at the buying process, not the selling process.

Map out the steps your customers follow when they purchase. The following are general stages in the buying process that apply to nearly all products. Adjust them to your own situation as you see fit.

Disengaged

The customer is not yet ready to buy, but what happens at this stage will influence future purchases.

Let’s use purchasing a car as an example. A consumer may have been quietly contemplating buying a new vehicle for three years. They see advertisements, although they don’t acknowledge that they pay attention to them. They observe what their peers are driving and are influenced by comments people make about certain brands. They are gradually forming a short list in the back of their mind of vehicles they would consider buying.

The entrepreneur’s goal at this stage is to make it onto the customer’s short list. Your brand must be present and relevant. The tricky thing is that your customer could have any number of experiences with you and your competitors over a few years.

Be where your customers are. Be present when they are experiencing your product. If you sell family-oriented minivans, be associated with children’s sports and the lifestyle of young families. Sponsor events. Run contests that engage with your target market. Ensure the messages in your advertisements speak to the frustrations your product can solve and to the joys of parenthood. Be relevant to your community.

Here’s the catch. You won’t be able to directly measure the impact of these efforts through sales. You can measure the number of people who enter a contest. But is it realistic to track those names over a five-year period to see how many purchase your minivan? Probably not. But ignoring this step simply because it’s difficult to measure is illogical. Your customer is deciding who makes it onto their short list. What can you do to be visible?

Learning

This phase is where the customer actively reaches out to get information from potential suppliers. They are still not ready to buy. They are learning.

Back to our car example, consumers spend hours researching vehicles on the internet and they know what they want before they arrive at the car lot. There is more price transparency. They know the features. In many cases, they visit the lot only to test drive the vehicle.

Planning to answer the phone is not good enough. Here, your marketing and sales effort should generate leads. For the purpose of this article, let’s define a lead as a potential customer who is actively engaging with companies. Every industry is different, but here is an example. A project-management software company might advertise that a free white paper on project management best practices is available on the company’s website. As is typical in this industry, people would be required to enter their contact information to access the report. It’s fair to say a large portion of people who submit the request potentially need the product.

Many companies make a considerable content-marketing effort through which they provide valuable information to potential customers. In many cases, your firm being known as a subject matter expert will lead to a sales discussion with your customer.

Keep in mind that at this stage, you are dealing with a potential customer who wants information. Answer their questions, collect their contact information (if possible), invite them to purchase, but be careful not to pressure them for a sale because you’ll turn them away. Many times it can be helpful to place the customer on a drip marketing campaign where you provide them with resources over time (e.g., seminars, articles). When they are ready to engage in a sales transaction, they’ll reach out to you.

Deciding

This stage is where the customer finalizes what they will buy, from whom, and at what terms.

In every industry, there are one or two points in the personal sales process where the salesperson has tremendous influence. Every industry is different. For example, when consumers are buying a new phone they are faced with the hurdle of committing to a multi-year contract. Cell phone retailers know that if the consumer leaves the store the chance of a sale drops dramatically. It’s a sensitive situation, and well-trained staff can help reduce the customer’s anxiety.

If you convince a customer to buy something they don’t need, you will almost always be worse off in the end. The customer won’t be happy and you may face any number of hidden costs, such as product returns or negative word-of-mouth. Helping the customer overcome anxiety is different than convincing a customer to buy something they do not need.

Reflecting

After the sale, a customer will reflect on their experience and the value they received. Buyer’s remorse is real. Avoid returns and negative feelings by following up with the customer. Many times there is no problem at all, and they will appreciate a business that did not take their money and run. But if there is an awkward situation, working through it can build goodwill.

Chances are actually high that the customer will be pleased with their purchase. This is an opportunity to generate repeat business. It also creates an opportunity to earn referrals. Paying customers for referrals rarely works. Most of the time customers feel their relationships with friends and family are more important than the incentive you offer. If you have an incentive program, consider how your customers may interpret it.

To earn referrals, it usually is enough to say you appreciate the customer’s business. Customers support companies that make sure they are satisfied and show appreciation. In some situations (e.g., professional service firms) it can be useful to explain to your recent customers what constitutes a good referral. What type of situation would that potential customer face?

When you are creating your marketing plan, consider these four steps from your customer’s point of view. Then switch to your own perspective and consider how to structure your business around the needs of the customer.

First published in the June 2018 edition of The Business Advisor.