Course 11. Stages of Change

Understanding customer behavior is essential to every company of every type and size.  You can never learn too much about your customer.  Over the past several years some very exciting work has been done in the area of behavior change.  Selling is basically about change.  A lead you meet today who's never met you before can become a loyal customer in the future.  Moving from a lead to loyal customer is all about change.

In this course, you'll learn about:

1.  The Stages of Change

2. Precontemplation

3. Contemplation

4. Preparation

5. Action

6. Maintenance

7. Termination

The Stages of Change

In the early seventies, two psychologists asked a very simple question: "How do people change?"  The Transtheoretical Model of Change, developed by psychologists James O. Prochaska at the University of Rhode Island, Carlo C. DiClemente at the University of Houston, and John C. Norcross at the University of Scranton, identifies psychological processes people undergo and stages they reach as they adopt new behaviors.

The Stages of Change is the most exciting model to be produced in the past two decades.  Its significance is beyond comprehension.  While the work to date has primarily centered on addictions, for this program the content of the stages has been directed towards the selling process.

The Stages of Change

1. Precontemplation.  In the Precontemplation Stage, the person isn't ready to do anything and doesn't acknowledge a problem exists that can be solved by purchasing your product.

2. Contemplation.  In the Contemplation State, the person acknowledges a problem exists but has many reasons why action can't be taken now.

3. Preparation.  In the Preparation State, the person is taking steps to purchase your product and solve the problem.  It's a preparation stage for action.

4. Action.  In the Action stage, the person has purchased your product and begins to use it.

5. Maintenance.  In the Maintenance stage, the person has purchased your product in the last six months and is working to derive the full value of the product.

6. Termination.  In the Termination Stage, the person is done using your product and the problem is solved.

The Stages of Change model is very important to understanding the sales stages of sales cycles.  A person entering a sales cycle will be in the Precontemplation, Contemplation, Preparation or Action stage.  Sales cycles mature over time.  The Stages of Change explain the time it’s going to take for cycles to turn into transactions.

In applying the Stages of Change to a customer base, it is imperative that you use a problem/solution paradigm to describe buying behavior.  People buy a product as a solution to a problem.  The primary question pertaining to transactions is, "When are you going to buy?"  The Stages of Change helps answer this question.

Using the Stages of Change to Build a Customer Base

We are going to present a model for using the Stages of Change to build a customer base.  For our model we are assuming the leads and prospects are from the New Market and are not currently customers of yours.

Stage                              Likelihood of Purchasing Your Product     

Precontemplation Stage   Slim chance, regardless of your effort

Contemplation Stage        Might purchase your product some day, at a great cost to you

Preparation Stage            Strong chance of purchasing your product with a quality presentation.

Action Stage                    Purchases your product.

Maintenance Stage           Continues to purchase your product.

Termination Stage            Your customer for life

Benefits Benefit of Using the Stages of Change for Customer Development

· Decrease your sales costs

· Increase closing percentage

· Build more loyal customer base

· Reduce friction between employees and customers

· Improve organization of the marketing and sales process

Stages of Change Model

Precontemplation (Not Ready Yet)

The Precontemplator will not be buying your product anytime in the next six months.  The buyer doesn't acknowledge a problem exists.  People in this stage tend to deny any problem exists and are resistant to efforts to engage them in the purchase.  It is a very stable stage.  Some precontemplators will never move from this stage despite any efforts from outsiders.

Precontemplators are the least responsive people to marketing efforts.  They do not see or want to see the benefits of your product.  This is because they don’t recognize they have a problem your product can help solve.  They do not see changing anything in the foreseeable future.  Precontemplators are often uninformed about a problem you can help solve.  Why should they buy your product if they don’t know it can help them?  They often don’t want to think about anything relating to your product especially the problem it can solve.  They are defensive and respond sharply to social messages.

Denial is the common characteristic of this group.  Often, everyone else is to blame. They need to acknowledge their problem and take ownership of it.  They need to increase the awareness of the negative aspects of their problem and determine what they can do about it.

Likely Situations

When you commit to lead generation programs you meet a lot of precontemplators.  They don't know you and you are making a solicitation.  You are asking them to focus on a problem they probably weren't thinking much about until you called or sent a letter.  The natural reaction is to resist.  "I'm not interested" is the common response.  Precontemplators don't acknowledge the problem you want them to face and therefore don't respond to solicitations for your solution.

The more complex a product and the more it costs the more likely Precontemplators are to show resistance to change.  For the Precontemplator to say, "I don’t have a problem" in terms of the purchase of a product they have to not see any benefit in the product.  This is much easier to do with more complex products and products that cost more. 

The Buying Center of a prospect's company consists of gatekeepers, decision-makers, influencers, buyers and users.  It's common to encounter Precontemplators in a buying center.  They are the people that don't think a problem exists and your product can't be a solution to anything.  If the Precontemplator is the decision-maker the sales cycle will sputter.

Contemplation (Thinking About It)

The Contemplator is thinking about purchasing your product in the next six months.  Contemplators acknowledge a problem exists.  They may even believe the problem can be solved by purchasing your product.  Contemplators are aware they have a problem and are seriously thinking about solving it, but they have not yet made a commitment to take action in the near future. They recognize the problem and start to build boundaries around it.  They begin to understand the causes of the problem.  They look at possible solutions.

Contemplators begin to consider the possibilities of changing.  They look at how the problem is affecting them personally and also the aspects of changing.  They will look at how a product affects their life. They look for information and begin to look at themselves.  They start to use the word "I" and say, "This is what I need."  They are evaluating options and don’t take action.  They generally don’t purchase products that solve the problem they are contemplating.

Contemplators will often purchase products but relapse as far as being customers. Your one-time purchaser is a Contemplator who took action for some reason.  They thought they had moved to the Action stage but actually relapsed back to the Contemplation Stage.  Contemplators are the classic window shopper and the tire kicker.  They make some effort in search of information and can appear to be interested customers.  They look but don’t touch.  They ask but not too strenuously.  They give lots of objections to the product pitch.  They are hard to pin down.

Likely Situations

Contemplators will often call in for information only to be non-committal.  You'll engage them in a conversation and they'll be interested and make inquiries.  They may even ask for information but seldom do they make future meetings.  They aren't engaged in action.

In a Buying Center, Contemplators are early stage information seekers.  "Just looking" is a phrase that seems to work for them.  They are probably users or decision-makers and ask for information.

If you're a cold caller you run into a lot of Contemplators.  They are Cold Leads.  They aren't interested in your product right now but might be six months from now.  They acknowledge the problem and may even discuss the consequences of the problem with you.  "No thanks.  I'm not interested right now."

Preparation (Getting Ready)

The preparation stage person is going to buy your product to get the benefit it brings.  This is the stage of decision making.  The person has made a commitment to take action within the next 30 days and is already making small behavioral changes in preparation.

The timeline is 30 days or less.  They’ve learned from their past and are dedicating themselves to problem resolution.  They start to set goals and priorities. They start to make firm commitments to follow through.  They’ve already started processes that increase the likelihood of taking action.  The preparation leads right into action if the goal is congruent with the individual’s needs and values.  The customer won’t buy the product if the product isn’t right.  The goals that are set have to match the capabilities of the individual.

The person in the Preparation Stage is a qualified prospect.  They know they have a problem that needs to be resolved.  They have been working through processes that will eventually lead to action.  When discussing the purchase of your product they begin to form a commitment to a purchase.  Your company, working in harmony with the prospect, can bring about a transaction.

Action (Going For It)  

The customer has progressed from previous stages and is dedicated to solving a problem with the purchase of your product.  The action is taken and the purchase is made.  This person has purchased your product in the last six months.  The problem that created the opportunity in the first place is in the process of being solved through the purchase of your product. Is the person a customer of the company?  Yes, but the work isn't over.

Action is the most obviously busy period, and the one that requires the greatest commitment of time and energy.  Changes made during the action stage are more visible to others than those made during other stages, and therefore receive the greatest recognition.  At this point, most of the change comes from utilization of your product by the consumer.  However, from a customer standpoint, Action is the least stable of the stages and carries the highest risks for attrition. 

Individuals in the Action stage still have to derive benefit from the product after the purchase.  For a beverage this is pretty simple.  You open the bottle and you drink.  For other products, deriving the benefit of the product can take much longer.

Buyer’s remorse is when a customer purchases a product and then returns it for some reason.  This is a classic example of a relapse from the Action stage.  The Action stage is very volatile and commitment has to be built prior to the entrance into the stage or buyer’s remorse occurs.  The Action stage receives the most attention of the stages because the action is very visible.  Often there is too much emphasis put on the Action stage and not enough focus on the development or nurturing of behaviors. 

Maintenance (Hanging In There)

A person in maintenance has purchased your product and is in the process of using it and deriving value.  Individuals in the Maintenance Stage are the repeat customers in your business.  They’ve taken the hardest step which is buying the first time.  They are working at maintaining a relationship with you to keep deriving the benefit of your product because it solves their problem.  However, customer turnover is a reality.  When you lose customers, they’ve relapsed from the Maintenance stage.

Purchasing of your product was met in the Action Stage, but the development of the consumer into a loyal customer begins in the Maintenance Stage.  Maintenance is a period ranging from six months after the product has been purchased and until the problem behavior is finally terminated.  Individuals in the maintenance stage are continuing to rely on the benefits of the product purchased from the company.

The person continues to use the product until it becomes permanent or ceases to be a benefit.  All products require a different level of effort in the maintenance stage.  For consumable items the maintenance stage is virtually non-existent.  A college degree has a very long maintenance cycle.  During maintenance, the person continues to obtain value and use despite the action of making a purchase.  Change never ends with action.  Without a strong commitment to maintenance, people stop using the product.  There will surely be relapse, usually to the precontemplation or contemplation stage.  Programs that promise easy "change" usually fail to acknowledge that maintenance is a long, ongoing process.

Creating a loyal customer by solving his problem is significant and difficult.  It depends on how much change is required by the customer to continue to utilize the product.  Even after 6 months of using the product, the customer is not completely established as a loyal customer to your product or company. 

Maintenance to gain customer loyalty requires sustained behavioral change process activity for periods of time from 6 months up to 3 or more years after the initial action. Companies need to educate the customer and build trust.  The customer needs to continually receive benefit from involvement with the company. 

Termination (Customer For Life)

In the Termination Stage, the customer has totally accepted the role of customer for your company.  The product purchases and subsequent benefit continue for as long as the company exists.

The Termination Stage is two pronged.  In traditional Stages of Change, the Termination Stage is reached when the problem behavior no longer exists.  For our purposes in business, we don't think of the Termination Stage this way.  We think of the Termination Stage as developing a customer for life.  The Action Stage is for the purchase of a product.  What we are really trying to do is encourage people to become our recognized customers.  The Maintenance Stage takes a one time buyer from the Action Stage and work is done to create a customer.  In the Termination Stage we have a customer.  They shop only with us for as long as we hold up our end of the bargain.

The cycle is ended.  Customers don't relapse back to a prior stage.  They have developed a mutually beneficial commitment with you. Your business becomes a habit to the customer.  It's the daily store the customer frequents.  It’s the reading of the same newspaper each day.  If a customer leaves the Termination Stage you will not see that person again. Your best, long-term customers are probably in the Termination Stage. 

Concepts of the Stages of Change

1. It is empirical meaning; it is based on the researchers' scientific investigation of change in humans.   Identifying customers in a stage of change is accurate and reproducible.

2. Change entails a number of stages which require alterations in attitude in order to progress. 

3. Change is a cycle as opposed to an all-or-nothing process. 

4. Change is different for each individual.  Some change quickly while others change slowly. 

5.  Customers do not leap across stages but progress from one stage to the next.  They may attempt to leap frog stages but relapse is inevitable.

6.  Buying a product is one thing.  Playing the role of a customer is another.  There are stages of change for product purchases and for accepting the identity of a customer.

Relating the Stages of Change to Sales Cycles

The Stage of Change Model explains the time it takes to acquire a new customer. 

Action - Purchasing now to take action to solve a problem

Preparation - Preparing to take action in the next 30 days

Contemplation - Contemplating action in the next one to six months.

Precontemplation - not contemplating action for at least six months.

Here is a sales stage model that uses the Stages of Change for time frames to action-based milestones.  Milestones for Cold stages are six months or more away from occurring.  Warm stages are one to six months away from occurring.  Hot stages are within a month of occurring.  Using time according to the Stages of Change helps to understand the profiles of the leads and prospects we are attempting to sell.

Summary

This course presented the Stages of Change model as an applied model for understanding the stages of change through the customer acquisition process. 

1. Precontemplation.  In the Precontemplation Stage, the person isn't ready to do anything and doesn't acknowledge a problem exists that can be solved by purchasing your product.

2. Contemplation.  In the Contemplation State, the person acknowledges a problem exists but has many reasons why action can't be taken now.

3. Preparation.  In the Preparation State, the person is taking steps to purchase your product and solve the problem.  It's a preparation stage for action.

4. Action.  In the Action stage, the person has purchased your product and begins to use it.

5. Maintenance.  In the Maintenance stage, the person has purchased your product in the last six months and is working to derive the full value of the product.

6. Termination.  In the Termination Stage, the person is done using your product and the problem is solved.