As a business owner, everything you do will boil down to your bottom line. Even when you’re worried about offering a good product or fussing about catering to your customers’ needs, you’re doing it because deep down you know it will result in future business. You’re an entrepreneur to make money. If you weren’t, then you would never add profit margins to your selling price. This means that the single most important action for your business is the purchase. Purchase, however, is the last step a customer makes.
Have you ever wondered what happens before? Does anything happen before the purchasing decision? For that matter, does anything happen before your potential customers come into contact with you? Think back on how you go about making your purchases and you’ll find that a lot happens before the final contact and conversion. The customer is the duck who has just glided on the water to you. A lot of paddling has been going on under the surface before the duck made it. That paddling is a part of the customer buying cycle.
The Customer, Your Business, and the Buying Cycle
Do you think every customer who contacts your business or visits your website is there to make a purchase? Yes? No! Statistically, only 3% of your potential contacts are there to give you money. No wonder, your conversion figures aren’t that great. Don’t lose heart, though. The other 97% may not make the purchase now but they might later. They might later, provided you understand them and why they came to you in the first place.
The balance 97% wanted something from you. Otherwise, they wouldn’t have come. There’s no rocket science behind this. There could only be three other reasons that caused the customer to visit you. What are they? Each of them along with the final purchase form the four phases of the customer buying cycle.
The buying cycle is important from the perspective of the customer because, without it, he or she won’t pull the trigger. The buying cycle is important from your perspective because now you know what you need to do to make the customer pull the trigger – nudge him along that buying cycle till he reaches the final phase of conversion. Here are the phases of the customer buying cycle.
Buying Cycle Phase 1: Conception / Need Recognition / Need Assessment
Even though this concept is that of a cycle i.e. it keeps repeating, the cycle has to begin somewhere. For every individual, regardless of what age, gender, or income group this phase is the first phase. The term ‘conception’ is used to denote the fact that this is the phase where the individual conceives of his need. This is where he realises that he needs something.
The need, remember, begins vaguely. The individual generally realises that he has a need. He then goes on to define that need and subsequently try to understand it and what to do about it. In this phase, the individual doesn’t even know that he may need to buy a product or avail a service to fulfil his need. He’s just interested in exploring his problem.
Buying Cycle Phase 2: Research / Shopping Around / Comparison
As the individual recognises and internalises his need, he may find that the solution is either a product or a service. Alternatively, even if a product or service isn’t the entire solution, it will probably be an intrinsic component of the solution. Realising this, the individual will now start looking at various products or services to find out how suited they are to meet his need.
This is the Research phase which involves everything from shopping around to comparing various products and services. The key aspect here is that the individual will look at multiple products and services, with the mindset of evaluating them in detail.
While every individual’s primary concern in this phase is to find a product or service that fits their need like a glove, individuals may look at other supporting elements as well such as the quality of the solution, the reliability of the provider, and even costs. However, remember that all evaluations in this phase occur as comparisons as opposed to standalone assessments. That happens in the next phase.
Buying Cycle Phase 3: Consideration / Shortlisting / Benefits Evaluation
By the time the individual arrives at this phase, he has understood the situation completely. He understands what his need is and the best way he can go about fulfilling it. He understands what the benchmarks and standards in the market are. He even understands which aspects of the product or service need to be prioritised for best results.
In essence, by this phase, the potential customer is more discerning and aware. Since the potential customer already knows about the problem and its various solutions, the business needs to focus on its offerings. If the potential customer is considering a product, service, or solution by this phase, then this means that he’s shortlisted it and is giving it some serious thought.
Buying Cycle Phase 4: Conversion / Purchase / Trigger
The final phase of the buying cycle is the conversion i.e. when the potential customer pulls the trigger and makes the final purchase. This is the entire objective of the buying cycle and if you’ve successfully been pushing the individual down the buying cycle, there is nowhere else that he can end up.
It is worth pointing out that buying cycles are different in different scenarios. This doesn’t mean that they’re different for different individuals. Instead, it means that they’re different for different products, services, industries, sectors, problems, countries, income groups, and businesses.
In fact, you can devise a buying cycle suited specifically to your business and offerings. The basic phases above will remain the same but each phase can be broken down into multiple mini-phases so as to make the marketing strategy more rounded, detailed, and complete.