- B2B Marketing - The Buying Cycle

Courses

Course 10. The Buying Cycle

The lead you are contacting operates from a Buying Cycle. The Buying Cycle is the potential buyer’s system and behavior processes used to create a purchase. The Buying Cycle is a problem-solving strategy buyers use to purchase things. It is an echelon of activity that increases in intensity up to and past the point of a purchase.

The Buying Cycle is the relationship with the seller, from a buyer's perspective.

It's very important to learn about the Buying Cycle. The stages and steps of the Buying Cycle help us to better understand our markets and to create strategies to create sales opportunities.

In this course you'll learn about:

1. Stage 1 - Problem Recognition

2. Stage 2 - Strategy Development

3. Stage 3 - Solutions

The Buying Cycle

There are three stages to the Buying Cycle:

Stage 1 - Problem Recognition

1. Current Product

2. Problem

3. Consequences

Stage 2 - Strategy Development

1. Solutions

2. Resources

3. Strategy

Stage 3 - Solutions

1. Ownership

2. Adoption

3. New Value State

Maturing Buying Cycles

When you make a first contact with a Lead, you will be able to determine how mature a Buying Cycle is for your product category. The more mature the Buying Cycle the faster a sales cycle moves. Also, the more mature a Buying Cycle the more sourcing the buyer has done and the more potential competition you have.

Statistically, about 85% of the first contacts you make, the Buying Cycles will be in Stage 1. About 10% of the Buying Cycles will be in Stage 2 and 5% will be in Stage 3.

In sales, there's such a thing as a "lay-down". A lay-down is a mature sales cycle that moves very quickly from first contact to a closing. The sales person just lays down the terms and conditions and the transaction is completed without much effort. How does this happen? It's a mature buying cycle in action. The buyer has already spent weeks, months and even years contemplating purchasing a solution. The buyer is educated and mature and in a position to buy instead of to contemplate and search. The sales person is in the right place at the right time.

Stage 1. Problem Recognition

Problem Recognition is the conscious acceptance that a Current Value is no longer totally acceptable.

Ultimately we learn a problem exists but recognizing the problem is a critical step. A consumer recognizes a difference exists between his or her current state of affairs and some desired state. A current value will not suffice. There is a negative attitude attached to the current value. The recognized value can be general or specific. It can be a simple or a complicated process. Awareness is a primary factor in Problem Recognition. Being aware a problem exists becomes more critical the greater the value.

1. Current Product. The Current Product is the current product, service or situation of the lead, prospect or customer that you, the seller, hopes to change.

The lead, prospect or customer has a current situation, you the seller, hopes to affect. The lead, prospect or customer has a need for your product or service and currently doesn’t have it or you hope to replace the current product or service with your own. The Current Product is the product, service or situation of the lead, prospect or customer. It’s essential you learn the Current Product of the lead, prospect or customer if you hope to sell your product or service.

2. Problem. A Problem is something that creates an inequality of values.

Consumers and businesses purchase goods and services to solve problems. We have been raised to believe that all problems are bad. A problem, in and of itself, is not necessarily a negative thing. It is an issue to be resolved. How do we know when we have a problem? When we question. Simple questions such as, "Am I hungry?" or "Do I want to go to a movie?" start the process. Define each and every product opportunity in business as a problem. Don’t think of a problem as a negative issue. It may be but it may also be an opportunity.

3. Consequences A consequence is a result of a course of action or decision. For every decision or action there is a consequence.

Sometimes consequences are positive and sometimes they are negative. In the case of the Problem Resolution Model, consequences are generally viewed has being negative. A current product creates a problem that has consequences. People are most likely to change their situation or behavior when a consequence is recognized and felt.

Stage 2. Strategy Development

In Stage Two - Strategy Development, the Buyer begins to put a plan together to solve the problem recognized and felt in Stage One. Typically, solutions for the problem are sought. How is the solution to be acquired? What is the cost? Resources for the purchase of the solution will be dealt with. Ultimately a strategy to solve the problem is developed.

1. Solutions. Solutions are ideas and concepts you discuss with a potential buyer that would solve a problem and improve a Current Product.

In Stage Two, the potential buyer develops a strategy to solve the problem addressed in Stage One. Solutions will be discussed that can potentially solve the problem. Sometimes there’s only one solution but most often there are multiple solutions. You’ll want to discuss the solutions with the seller and attempt to position your products and services as the solution of choice. Step One is often a brainstorming session but one you hope to guide in your favor.

2. Resources. Resources are all the things needed by the potential buyer to solve the problem created by the Current Product and the positioning of the New Product.

Resources can be many things. It can be the money to pay for the product or it can be the buying center group that will approve a purchase. It can be approval from a governing body or a license granted by an agency. Resources are person place or thing that contributes to the solving of the problem.

3. Resolution Strategy. A Resolution Strategy is a plan with necessary controls designed to resolve the problem.

A strategy is a plan or a method to solve a problem. A strategy to solve the Current Product problem will be formed after solutions and resources are determined. This includes a search for information, a determination of perceived risks and choosing alternatives. A goal will be chosen that resolves the conflict and then, desire to implement the strategy begins to build. The strategy will include a transaction that completes the purchase of your New Product.

Stage 3 - Solutions

In Stage 3, solutions are acquired. A product or service that solves the buyer's problem is purchased. The value of the solution is extracted and a new situation is created. It's a situation hopefully without the problem.

1. Ownership. In Step One, ownership of the New Product is started and completed. The first part of ownership is the transaction. The transaction is completed and payment is exchanged for goods or services. The product or service is delivered to the new owner where the benefits can be derived.

2. Value Adoption. Value Adoption is the taking and receiving of a New Value into an existing environment.

Value Adoption is the process a prospect implements to adopt the value of the problem resolution. The greater the problem the harder the process of integration can be. Integration is the process of deriving value or benefit from a product or service through its use. Some products have immediate integration such as foods and beverages. Others take time to derive the benefit such as a new software program or a new book. Adoption is the description for the entire integration process including concepts of ownership, integration and conflict resolution.

3. New Situation. The New Situation is the new situation, condition or identity created from the adoption of the New Product and completion of the problem resolution process.

Products and services create new situations, conditions or identities for the prospect that purchased it and adopted its values and received the benefits. Some products have a profound effect on the purchaser. A family purchasing a first home or a teenager with the first car is examples where the new value state is profoundly different than before the problem resolution process.

Summary

This course provides a framework for a working model of how buyers do their purchasing. It's called the Buying Cycle. The Buying Cycle is the relationship with the seller, from a buyer's perspective.

Stage 1. Problem Recognition.