I have consolidated all my earlier blogs into a short ebook and uploaded it to slideshare. Please take a look and share your thoughts.
Downloadable copy is available at www.ProductGuy.in/Resources/
I have consolidated all my earlier blogs into a short ebook and uploaded it to slideshare. Please take a look and share your thoughts.
Downloadable copy is available at www.ProductGuy.in/Resources/
Buying cycles of a product (especially B2B) takes really long, long buying cycles are really exhaustive. There are certain areas of the buying stages that could be optimized to reduce the overall time taken to conclude the buying cycle. I have summarized 10 such tips that could be optimized to shorten the buying cycles. Much of what was explained below might be exclusively applicable for B2B products.
This blog is the last part in the series of blog posts on ‘Why to comprehend customer buying processes‘
In my earlier blogs, i have extensively spoke about what customers look for in a product, what parameters do they consider while making decisions during each stage of the buying process or rather what information need to be provided to customers to facilitate them to make right buying decisions.
In case of B2B and B2C products, much of the delay is caused by inability to pick a right product due to plethora of products that are almost similar. Simplifying the buying process by making customers choices easier and facilitating customers to make the right buying decision could shorten the buying cycles.
I have already talked about in detail on how to understand the customer needs and just provide those details on how product can address their details in my earlier blog posts. If there are multiple SKUs, then help them make their choices easier. What often happens is that under the pretext of providing more details and more choices, Product Manager would end-up with more SKUs and tons of information about each of those SKUs. Searching for relevant information on which of those SKUs are perfect for the needs of the customer would be tantamount to searching for a needle in hay. Information overload pushes the customer away from the product.
Let me provide a small snippet on how to simplify the buying process:
Above is the product finder for Canon compact cameras. It is not too great, but at least better than nothing. The product finder lists certain product functionalities and help to filter the available products. In a way, it makes search easier. Instead of looking at the feature set of each product, prospective customers can just use the product finder to narrow the search down to handful of cameras. Nevertheless for a camera, the amount of memory and available auto options are also important and I would probably wish to list them in product finder to further simplify the buying process.
My worst nightmare is while picking a DSLR. Nowadays there are more novice photo enthusiasts and it is surprising that none of the DLSR manufacturers have buying guide in their respective sites to guide the beginners. I don’t want to be critique here rather the objective is to highlight the need to ease the buying process. If it is not easy to choose a product, customers just pick the easy route. They look out for referrers and it might probably work for certain well established brands with a loyal customer base. Worst case, the customers can be misled too. Somewhere down the line, the company is being a cause to push customers away.
To build an effective product finder page, identify the critical attributes that customer use to evaluate the product. In case of camera, the possible attributes could be (i) stylish, (ii) zoom length, (iii) price, (iv) auto/manual and (v) memory. Pick such attributes and determine the values under each of those attributes for customers to choose. Depending on the choices made by the customer, provide a list of matching product with an option to compare them.
When the Product Manager is solution focused, (s)he is willing to take a giant leap to understand the customer environment, their needs and their pain points. Being solution focused, Product Manager does not restrict himself/herself to merely selling the product by highlighting its capabilities but will take a step further to elaborate how the product can fit into customer environment seamlessly integrating with other products to address their needs and pain points. Providing such clarity can help customers to shorten the time taken to understand how product perfectly fits to address their needs thereby making their buying process simpler and quicker. Solution focus is more important in case of B2B product.
It is a classic case of determining USER vs BUYER. If the USER and BUYER are two different entities, identify the respective entities early in the buying cycle. Invariably USER and BUYER both have different objectives. USER is concerned about how the product should be used to address the business problem more than how the product addresses the business problems or needs. BUYER would be more concerned about how the product addresses the business problems or needs and at what price points. Product Manager cannot talk to both the entities at the same length as their purposes vary. Identifying both the entities early in the buying cycle, will help Product Manager to address their concerns and convince the efficacy of the product to both of them in parallel. Doing so will eventually reduce the duration of the buying cycle.
When the need arises, customers start looking for products that can help them address their needs. Customer might visit a store or look online or seek opinion of experts/friends to identify available products capable of addressing their needs. Whatever be the case, identify all possibilities of where the customer could start looking or searching for products matching their needs. Make sure you have the engagement point in each of those possibilities to connect with prospective customers and create awareness about the product.
My take on new deals of both existing and new customers is to understand both explicit and implicit needs. Later present those needs holistically back to the customers and highlight how best the product is addressing them. There should also be emphasis on emergent needs and how the product would evolve to address those needs. Invariably, every customer would then ask how you are better than competitors. So in most cases, it is required to highlight how the product address the needs better than the competition. Having competitive analysis handy would make the job easier.
Respect competition. Never bully competitors before your customers. Customers might not always favor chest thumping attitude. While being gracious, always highlight which attributes make you stand out in the crowd. Hmmm…. How does it matter to customer? Here again, don’t just blindly pick the attributes that make the product stand out, instead pick those set of attributes that matter most to customer. If a product does a specific functionality better than the rest and if it is of no use to customer, then it hardly matters to customer how well the product performs that functionality.
Use this principle even while responding to RFPs in case of a B2B product. Every product does well in certain aspects and not so well on others. While responding to RFP, what matters is that whether the product is better on aspects that are mattered most to customers and highlight the same as part of the RFP response. Doing so would help customers convinced about their choice of product without any further deliberations.
Instead of treating trial as an overhead in the buying process, treat it as an opportunity to showcase the value of the product. In most cases, products from multiple vendors look similar on paper in such cases trial go a long way in demonstrating the tangible value and product differentiators. Even though the trial would be conducted independently by the customer, Product Manager should at least be part of the process to know what functionality is being tested, identify whether customer understanding of the product is aligned with the product’s actual behavior and capabilities. Even if the agenda for trial is set by the customers, Product Manager has to educate customers on the list of product capabilities that would matter most to their environment. Ideally trial delays the buying process, but it brings transparency to the buying process. If planned well and appropriate support is rendered to the customers, it would be possible to complete the trial quickly scoring few brownie points with customer to close the deal successfully.
Is the product worth the price? It would be last question on the minds of every customer after they have zeroed in on the product. Product Manager efforts to convince customers on how the product could address the needs of customers better than any other competition can definitely help customers chose the product. However until customers are convinced whether product is worth the price, they would not go past the last phase of the buying process (ie Adoption stage). Every product (mostly B2B) need to have a RoI tool that can outline both tangible and non-tangible benefits of purchasing the product. Customers should get convinced that value derived from the product outweighs the price. Providing relevant RoI data would only hasten the buying process.
Pricing in case of B2B products might not always be rigid. Depending on the strategic importance of the customer, and volumes etc., different pricing options could be put forth before the customer depending on how they want to structure the CAPEX and OPEX. Certain customers have budget for HIGHER CAPEX but want considerably LOWER OPEX, few other customers want to follow OPEX model with relatively LOWER CAPEX. Understand the customer preferences and their budget constraints. Accordingly figure out the possibilities for any change in pricing. Since the approvals might take longer, Product Manager has to undergo this task in-parallel while the product is being evaluated. Remember the topic surrounding BUYER vs USER, the discussions with BUYER should happen earlier in the buying cycle along with the USER to understand the expectations of BUYER in terms of RoI, pricing etc and accordingly formulate the pricing strategy within the permissible scope.
This section might not be relevant if there is a conscious decision to create an impression of exclusivity of products by maintaining a constant inventory level leading to long wait times. Otherwise, Product Manager has to figure out how to reduce the waiting time. In case of B2C, this would be applicable for products like Cars. In case of B2B, with HW products there would always be a lead time. It would be the responsibility of the Product Manager to anticipate the future sales and pro-actively maintain the inventory. If there is big ongoing deal, in accordance with the probability of deal closure, Product Manager can alert manufacturing team to maintain appropriate inventory levels. Long lead times can have negative impact on the deal and it can also further extend the duration of buying cycle.
Always be honest with your customers. If the product does not fit their requirements, be honest with them to indicate that the product might not be a best fit. Selling the product to a wrong customer is always worse than not selling. Product Manager might have made revenue, but there will be definitive long term implications. Customer would later realize that the product does not fit them well possibly jeopardizing all future businesses from the customer. The negative feedback from the customer might also have implications on other customers as well.
Being honest helps Product Manager to build a long lasting relationship with customers that might probably facilitates more sales in future. How someone could possibly explain why B2C customers would always buy product from a specific store or brand, why B2B customers directly raise a purchase order to procure products from a specific vendor without any RFP or evaluating any competitors. The only answer that I could anticipate is the TRUST towards the BRAND and the PRODUCT.
How customers perceive the product determines their behavior and their behavior determines the outcome. So the facts do not determine the success of the product as much as the perception does. Product Manager therefore has to focus on creating a perception among the minds of existing and prospective customers that reflects positively on the success of the product.
Every product will be built only with the basic premise that what is being built will be valuable for customers and they will readily embrace it. So ideally there are 2 elements
While building a product, Product Manager ensures that there are lots of synergies between (1) and (2). Otherwise there is no purpose in building the product. Basically the value rendered by the product and customer needs should overlap to a greater extent for better product-market fit. But does it suffice for product success?
For product success, customers should perceive that the product addresses their needs in the most optimal manner in comparison with competition. How the product should be perceived by the customers should eventually determine the marketing message for the product. The marketing strategy should strive to create a perception that is basically derived from the understanding – ‘How we could like our customers to talk about the product, what we could like our customers to believe about the product’. Therefore the (3) aspect of building a commercially successful product is to derive the right marketing strategy to ensure that customers’ perception of the value rendered by the product aligns with the actual value delivered by the product (ie the perception should match the reality). Otherwise customers might feel that the product does not fit their purpose. So essentially Product Manager needs to ensure that (1), (2) and (3) overlaps for a successful sale.
Let us consider the example of selling a brand new car. The car under discussion is a multi-purpose family vehicle catering for a larger family of 6 people. It is reliable and well-designed with utmost driving comfort. Product Manager wants to create a perception about the car that is aligned with reality. The marketing campaign or the engagement points, albeit they deliver messages with varying depth, each of them should aim at creating same perception among the minds of the customer (ie the car is a family car which is reliable and well designed with utmost driving comfort). The information that is delivered to customer during various stages of the buying process should essentially focus on how the car is delivering on those parameters and it not worthwhile for someone to talk about the off-roading capabilities of the car or it ability to go from 0-100KMPH in x seconds.
The necessity for creating a perception starts with sending the 1st message about the product and thereafter at every opportunity customer interfaces with the product during the buying cycle and pre/post the buying cycle, there is a necessity to manage the perception. It is essential to frequently measure the perception and ensure that the customers perceive the product in a way we like them to do.
Otherwise, customers’ notion of the product contradicts the reality. If such customers enter the buying process, the probability of successful sale will be minimalistic. In such cases each engagement point in the various stages of the buying process should also be leveraged to influence perception positively in the minds of the customers. All engagement should work like a well-orchestrated symphony to create and manage a consistent perception. ‘How do you want customers to perceive the product’ determines the behavior of each of the engagement points as well.
Amazon is known for putting its customer first and they succeed in creating a similar perception among customers as well. Every customer too opines that Amazon is ‘Customer friendly’. I presume everyone in Amazon believes what they stand for. To ensure creating and managing appropriate perception across all engage points consistently, it is critical for every stakeholder involved to understand what the product and the brand stands for. What the product and the brand stands for should be religiously imbibed into the thought process of every stakeholder and it should act as guidance for any engagement with customers. Doing so, every engagement point can act in-harmony to manage a consistent perception. Apart from the engagement points involved in the buying process, every organization needs to have mechanism to deal with perception threatening events that might shake the foundation of what the product stands for. Product failures and recall of car plying on the roads might have serious impact on how customers perceive the product. In such cases, even though engagement points can be tuned to influence the perception, there should be other dedicated ways to restore the perception. Similarly there should also be focus on perception enhancing events through ratings by recognized agencies, product endorsements by persons with lot of authority in the related space.
Product Manager should identify the information which when provided to customers would make their buying process easier and simpler. Product Manager therefore has a fundamental responsibility to identify what information would be sought by customers across various engagement points at each stage of the buying process. Identifying the causes for customer churn and identifying what information is sought by customers are strongly inter-related. Unless, appropriate information as sought by customers is provided to them during buying process to simplify their decision making process, they quit. Unless Product Managers identify the reasons for customer to quit the buying process (I will explicitly focus on the reasons for customer churn in subsequent blog), it will not be possible to reinforce engagement points to provide relevant details that can possibly influence customer buying decision positively. Engagement point need not always provide information, sometimes they deliver experiences. In case of restaurant, where food is considered as a product, restaurant can be considered as an engagement that delivers the experiences for customers to enjoy the food. The review sites like Zomato (www.Zomato.com) can also be considered as an engagement point that customers leverage to decide which restaurant to go based on the reviews.
Customer has certain expectations from product in alignment with their respective needs. During the buying process, customer is actively on lookout for experiences or information that can provide sufficient details to identify whether the product can meet his/her expectations. As long as experiences or information provided by participating engagement points during each stage of the buying process matches customer expectations, the journey would culminate in a sale. Therefore the task of Product Manager is to identify what are the expectations of customers in each stage of the buying process and accordingly feed the engagement point with necessary data so they are equipped to meet the expectations of the customer.
Customers start their journey with a need for basic information about the product and as they march onto subsequent stages of the buying process their desire to know more about the product only increases. Journey of buying process starts with creating an awareness about the product by feeding customers with basic information about the product (purpose, USP etc). While seeking information, customers look for more details about the product. Evaluating the product is tantamount to looking out for details (ie proof) to authenticate the information provided about the product in the information and awareness stages. Proofs could be in the form of customer testimonials or opportunity to evaluate the product to ensure what the product promises is what it delivers. Customer have reached evaluation phase because the information that was provided until then had convinced them to buy the product. So evaluation phase is an opportunity to convince customers that product delivers as promised to them until then. Good news is that customer do no look for discrete information, the kind of information they want to know about the product primarily stems from initial messaging of the product in awareness phase.
Understandably the expectations from customers across all stages of the buying process do not remain same. It hardly makes any sense to flood customers with all the details about the product at the awareness phase. Product Manager has to identify the right set of information to provide at each of the stages. Excess information might leave customers confused thereby making their choices difficult and eventually pushing them away from us. Part of the purpose is also to help custo
mer make right buying decisions by providing only appropriate and relevant information, so the product is always sold to the RIGHT customer. I always opine that successful sale to a non-target customer will always be detrimental.
Especially with B2B products, pruning of information and sharing appropriate information at each stage of the buying process is really critical. Most B2B products are built with plethora of features and they do million things to address various customer pain points, it is sufficient to just talk about the finite future set that would address exact customer needs or pain points. To do so, Product Manager needs to be aware about the customer environment and their needs or pain points. Lack of such information will only push Product Manager to flood the customer with product capabilities, Product Manager is letting customer experience information overload leading to a very bad experience. Product capabilities sound alien to the customer. What customer expects in each stage of the buying process is how the product can address their pain points. Identifying customer pain points and elaborating how the product can address those pain points in more optimal manner much better than anyone else will essentially simplify the buying process. I have elaborated below on the kind of information that would be expected by customers in each stage of the buying process.
Awareness is all about creating a lasting impression in the minds of customers about the product or brand synonymous with its core functionality. BMW with luxury cars, DropBox with collaboration, Freshdesk with customer support, Intuit with finance SW.
When the need arises for a customer (both B2B and B2C), brands or products that are synonymous with the functionality capable of address the need should immediately strike them or when customers google for products that addressing their needs, corresponding relevant products should be displayed. The focus of creating awareness lies entirely with Product Marketing Manager. Awareness is not about throwing lots of details about the product, it is just about communicating what the product does. I have few examples
What information is provided by Intuit, Vedantu.com and Freshdesk in those ads.
The ads communicate what those products stood for and what is their primary service offering. There are no much details, intention is to provide information on what the product does without dwelling too much into the details while creating awareness about their respective products through ads.
The engagement points in the information phase feed few more additional details to indicate how the product can address the needs of pain points of customers, what is its competitive advantage and how uniquely can the product address the customer pain points, what is the price of product offering.
In case of online tuition (Vedantu.com), customers will be able to identify for which grade tuitions are available and for what subjects, who are instructors. How the tuition is delivered, is it recorded medium or live? Are the tuitions conducted for competitive exams as well? If yes, for what exams? Etc.
Demos to substantiate that the product can address the customer pain point can be the ideal opportunity to let customers evaluate and experience the product. Product Manager has to demonstrate the capabilities required by the customer, demos for the heck of it helps none. More often Product Managers are obsessed with demonstrating features that are deemed important by them. Some of the features might be really innovative (out of box), unless they would influence the buying decision of the customer, do not explicitly talk about it.
Evaluation is all about creating an atmosphere for customer to evaluate the product in alignment with their requirements.
If it is a sports car, what is the point in allowing customers to test drive the car within city limits where there could not really experience the car. So the test drive should really happen on highways/freeways to experience the power of the car firsthand by the prospective customer.
On similar lines, in case of SUV with strong off-roading capabilities, there should be a facility for customers to experience on firsthand the off-roading capabilities before buying the car. Otherwise, I don’t see how customers can make right buying decisions.
Product Manager can also create an atmosphere to facilitate customers to experience their offerings.
Apple stores do not merely exist for the purpose of selling all their products. They exist primarily to allow their prospective customers to discover, learn and experience various Apple products.
Companies offering home theatre solutions (such as Bose) would create an exclusive environment to allow customers to experience their offering thereby creating a WOW experience among customers.
Testimonials of customers already using the product for similar purposes, market share to emphasize the acceptance of the product among customers can be deemed as reliable alternatives by prospective customer to evaluate the product. Product roadmap to showcase the future plans of the product is also critical for evaluating the future of B2B product. Customer can always resort to one or more of the suggested methodologies to evaluate the product.
Trial is an extension of evaluation phase especially in B2B space. Evaluation does not always involve actual validation of the product. Moreover, the evaluation will be done in a controlled environment. But trial will mostly be held in customer premises and it is an opportunity to test how the product can fit in customer environment and address their requirements. Product Manager has to exert control on the trial by identifying stakeholders on either side to work together throughout the duration of the trial. In addition, the trial has to be planned well to determine what customer might evaluate and pro-actively verify whether there is any possibility for product to misbehave. Such pro-activeness is required to avoid any negative impact during the trial.
Customers go past this stage if they are convinced that product is worth the price. Communicating and justifying the RoI is critical especially for a B2B product. Communicate ROI to customer to indicate the value delivered by the product could offset the initial cost. If the product costs $100,000 and it is the responsibility of Product Manager to communicate the tangible and intangible benefits of investing $100,000 to customer business. Product Manager has to clearly articulate the benefits in terms of operational efficiency (savings in $) or ability to generate more revenue, or enhance customer delight etc. Depending on the situation discounts, migration plans or flexible pricing options had to be projected to provide an attractive proposition to customers.
In this phase, customers do not seek information but they seek experience. Level of experiences delivered will determine the loyalty of customers. Track how customers are using the product and measure his satisfaction level. Keep a tab on the support cases, feature requests raised by customer. Possible interlock with them to make sure that there are always opportunities for CROSS SELL and UP SELL. Loyalty is not merely for cross sell or up sell alone, but to have those customers act as product ambassadors and speak about the product positively. I am surprised at how certain companies periodically call their respective customers to remind them about pending service or license upgrades or renewals. The engagements points in loyalty are expected to imbibe such behavior.
Apart from the identifying kind of information that would be required by customers during each stage of the buying process. Product Manager needs to have penchant to know more details on how and where customers would like to consume the information. If we are providing all the information required by the customers but not in the form expected by them and not in the location of their choice, then it is a colossal failure.
This blog is a continuation of my previous blog post on ‘Why it is required for Product Managers to comprehend customer buying process‘. I have mentioned about ‘WHY’, ‘WHEN’ and ‘HOW’ of comprehending customer buying process. In this blog, i am expanding ‘HOW’ to talk in more detail about the buying stages of customer buying process.
As customers enter the buying process, not every customer journey culminates in a sale and it is sheer pragmatic sense on part of the Product Manager not to expect 100% hit rate. Because combination of both genuine buyers and frivolous buyers enter the buying process, Product Manager has to isolate the genuine buyers to further identify who among the genuine buyers are actual target customers and figure out what causes the target customers to quit the buying process. Identifying the exact set of causes is more easily said than done, but quest for answers can possibly help Product Managers expand the bottom line.
The stages in the buying process vary depending on the product. Nevertheless, there are already well defined stages such as AARRR (developed by Mcclure) and 6 stages derived by Bryony Thomas in her book – Watertight Marketing. I have listed them as a reference to aid in better discussions.
All those stages are self-explanatory, so I avoid dwelling into details of each of those stages.
For ease of discussions, I will henceforth follow the 6 stages defined by Bryony. Nevertheless the thoughts or suggestions put forward in the following section of the blog will be applicable to any other stage approach of customer buying process as well.
I have constructed the buying stages for a car and a closer look will reveal that I have comfortably omitted the TRIAL stage. For me TRIAL makes more sense in case of B2B product where the customers will trial the product free of cost for longer duration (3-6 months) in their environment before they decided to purchase the product. For me TRIAL is a natural extension of evaluation stage where customers will attempt to evaluate the product in much more detail. In case of buying a car, there would not be any detailed attempts to evaluate the car and therefore I thought it is appropriate to drop the TRIAL phase while ascertaining the buying stages for a car.
Stages therefore referred in this article are only for reference and not for strict adherence. Depending on the nature of the product, Product Manager can either add additional stages or remove existing stages. What is critical is that Product Manager identifies an exhaustive list of stages for his/her product buying process. Otherwise it would not be possible to identify at which stage the product is experiencing customer churn. Once the stages of buying process are ascertained, it is time to embark on the journey of identifying various engagement points within each stage of the buying process.
With the advent of mobile, web and social media, the engagement points for customers to know about the product, to evaluate the product, to collect feedback about the product and to throw feedback about the product has only manifold. The task at hand for Product Manager is to identify exhaustive set of engagement points at each stage of the buying process.
The purpose of engagement points is to establish connection between the product and customers. Engagement points provide more details about the product in order to simplify the buying process of customers, solicit feedback on what customers think about the product and finally to deliver or enhance customers experience with the product. The nature of interaction and communication between engagement points and customers can be bi-directional or unidirectional. Engagement points can take any form – personal, digital, social etc.
Engage points should be chosen depending on how customers would like to interface with product (in which form and in which location) at each stage of the buying process. All those drivers combined together define the engagement points at each stage of the buying process. Not all engagement points are defined by the Product Manager, certain engagement points are defined by customers. For instance, customers dictate where to throw feedback about the product. Engagement points also need to evolve. Existing engagement points should either be deprecated or new engagement points should be introduced in accordance with the changing behaviors of the customers. Ultimately when, where, and how (timing, location, and format to share information) of each engagement point would be driven by the customer preferences and conveniences. Engagement points should create a plethora of options for customers to engage with the product, therefore the criterion for selection of engagement points is not merely by choice but by convenience and preferences of customers.
For sake of illustration, let me revisit the example of buying a car and list down all possible engagement points for each stage of the buying process.
Basic tenets for identifying engagement points
In the next blog, i will talk about how engagement points could be leveraged to facilitate customers to make right buying decisions.
I have earlier authored couple of shorter eBooks (downloadable copy available at www.ProductGuy.in/Resources)
In both those books, I repeatedly stressed that merit of the product is only a partial contributing factor to a sale and there are other non-product attributes that determine the buying decision outcome of each customer. There is always a classic case of good products failing because of improper positioning, irrational pricing, lack of proper messaging to communicate the actual value of the product (ie the perceived value of the product does not match with reality), selling through inappropriate channels etc. I definitely bet most of us would have come across at least few PMs screaming ‘Oh GOD, I have built a wonderful product that perfectly meets customer needs and aspirations, why the HELL product sales are not increasing’.
In case of restaurant where food is considered a product, the ambiance and the location of the restaurant is as important as the taste of the food. In case of B2C, marketing do play a critical role in communicating the value of the product and establishing an emotional connect. In case of B2B, the existence of reliable support system, brand value, and distribution network are other important factors that complement the core product. All those elements apart from the core product that is critical to the success of the product will hence forth be referred as non-product attributes. Both core product and non-product attributes together should provide compelling reasons for customer to buy the product. To determine the list of non-product attributes that would influence a sale it is critical to understand the complete buying process of the customer.
Unless the Product Manager determines and fulfills both product and non-product attributes, success of the product is not guaranteed. So there is an indispensable need to understand or comprehend the psyche of the customer while making a buying decision. Accordingly Product Manager can incorporate those inputs to evolve the product(s) and fulfill non-product attributes in alignment with expectations of the customer. Such efforts would ultimately culminate in delivering more $$$ through successful sale of the product that is rightly embraced by target customers. Even in case of not so better product, understanding and corroborating the buying process can also help Product Manager comprehend the lack of product attributes that is leading to an unsuccessful sale.
The buying decision of every customer is invariably backed by either emotion or logic, sometimes both. Typically in B2B, logic plays a predominant role. The objective of B2B customers is to understand ROI of the product in terms of price of the product vs business benefits fulfilled by the product. In case of B2C, emotion might play a bigger role depending on the nature of the product. For instances, buying decision of cars, mobiles are governed by both emotions and logic (albeit in varying degree). The buying decision might not be purely based on the utility value of the product. However there are certain exceptions in B2C products (probably kitchen accessories – KNIFE) which are bought purely based on utility value.
Price of the product determines the amount of effort customers put towards making a buying decision. Every customer has a price range, generally referred to as a tolerance price. The buying process can be whimsical for any product priced within the tolerance price range. Customers do not really care much about evaluating the products within the range of tolerance price. Probably awareness about such products and ease of availability would be more important to a successful sale. The tolerance price point is not universal and it probably depends on the per-capita income of each individual (in case of B2C) and the % of overall budgetary spends (in case of B2B). Customers might start evaluating a product through a rigorous buying process when they are priced beyond the tolerance price range. The rigorousness involved in the buying process is directly proportional to the price. Customers do not employ same rigor for buying a car and buying a stationary item.
To comprehend customer buying process, I intend to dissect the buying process of a product into stages and identify all possible customer engagement points (both offline and online) at each of those stages. Engagement points are typically touch points that customers leverage to locate the product, know about the product, gather feedback about the product, evaluate the product, throw feedback about the product and finally to buy the product. Dissecting the buying process is critical to identifying the combination of buying stage and engagement point at which customers are quitting the buying process. Later to decipher what causes customers to quit the buying process during that particular combination of buying stage and engagement point. Such efforts can help Product Manager understand the lack of non-product attributes that is causing customers to quit the buying process. Sometimes, the cause could be attributed to lack of product attributes as well (missing functionality, lack of ease of use, unreliability etc). Even in case of not much customer churn, dissecting the buying process can also help Product Managers understand the reasons for successful sale of the product.
This blog post will be followed by a series of blog posts related to ‘Comprehending buying process’
1. Stages of buying process and how to determine engagement points in each of the stages
2. How to facilitate customers to make right buying decisions
3. Identifying cause for customer churn during the buying process
4. How perception plays a critical role in the buying decision of customers
5. How to simplify buying process (especially for B2B products)?
I will drop a blog post on each of the above topics in the forthcoming weeks.