Dan Schaefer

Content Writer, Programmer, Marketing Consultant

November 7th, 2013

Marketing Activities and the Customer Buying Cycle

Buying Cycle, by Dan Schaefer.

(Note: This article appears on the Business 2 Community website)

Marketing Campaign Managers must carefully consider their customer buying cycle when choosing among available marketing activities.  Activities include trade shows, seminars, webinars, newsletters, press releases, and so on. With budget and resource constraints, managers may find it difficult to decide which activities to embark upon. Familiarity with the buying cycle may help them understand the relative importance of each activity and therefore make better choices.

This article looks at a version the Buying Cycle, as originally described by John R. Holland and Tim Young in their book, Rethinking the Sales Cycle – How Superior Sellers Embrace the Buying Cycle to Achieve a Sustainable and Competitive Advantage, and how it relates to specific marketing activities in a B2B marketing environment.

Control of Information
Today’s customers use the Internet to obtain information and gain familiarity with products long before engaging with salespeople. For salespeople, this is an unfortunate side-effect of the Internet; it essentially removes the advantage of controlling information flow to the customer during the early stages of the buying cycle. Holland and Young use the term “Buyer’s Revenge” to describe the way that customers resist – and perhaps detest – salespeople during these early stages.

Since salespeople cannot control information flow, it’s up to the Marketing department to influence the sources of information that the customers access. Online articles, third party blogs and other social media avenues allow a clever marketing department to gain influence over the information in a very subtle but effective way. In much the same way that ET was baited along a path with M&Ms, effective marketing departments leave a trail of information that compels customers along a path to the Sales department.

The Buying Cycle

See figure 1 for a version of the Buying Cycle, as described by Holland and Young. This figure has been modified from the original three-stage diagram provided by Holland and Young in order to break out more detail in a B2B environment. In our case, the buying cycle moves through four stages: Awareness, Investigation, Evaluation and Commitment.

Figure 1 - The B2B Customer Buying Cycle

The Awareness Stage focuses on bringing attention to a problem. During this phase, Marketing attempts to have as much influence as possible over the sources of information that potential customers will access. In the days before the Internet, salespeople would get familiar with potential customers in their territory to keep a pulse on activity and be ready to spread FUD (Fear, Uncertainty and Doubt) when an opportunity is spotted. For example, a salesman may spot a potential problem with a manufacturer’s quality control system and then – over drinks during lunch – raise the customer’s awareness of the problem as well as the solution. These days, the same concept still applies, only the raising of awareness doesn’t take place during inebriated lunchtime appointments; rather, it’s done with compelling articles, blogs or other social media avenues to which the customer subscribes. For example, a headline in an online article that reads, “Can Someone Hack Into Your Automated Manufacturing System?” might well cause palpitations among operations managers and prompt them to look further into this potential nightmare. In short, the Awareness Stage raises an urgent sense of need, which causes the potential customer to progress to the next stage and look for possible solutions.

The Investigation Stage focuses on providing a solution to the urgent need raised in the previous stage. Marketing materials during this stage should focus on solution-based themes, such as white papers, case studies, webinars, hosted blog articles, and anything else that the customer can quickly and easily acquire. Search Engine Optimization (SEO) is of paramount importance, and search terms that directly address solution-based ideas should be at the center of SEO efforts. Potential customers are still in control during the earlier part of this stage, but as they progress toward the next stage, they will feel compelled to make contact with someone in the company. Online contact forms, trade shows and e-newsletters provide some avenues for contact; however, the Marketing department should avoid throwing all this information over the wall to the Sales department. Marketing should instead track individual contacts and gauge their interest level using some sort of scoring mechanism, and when contacts reach a certain score, they should be moved into the Sales department as a sales lead. This prevents inundating the Sales department with dead-end leads. The bottom line is that the Investigation Stage focuses on telling the customer that a solution is at-hand and compels her to make contact with the company to request a demo or a trial.

The Evaluation Stage complements the previous stage by removing any doubt about whether or not the solution will address the urgent need. During this stage, the Sales department takes the lead in addressing customers’ requirements. It is important for salespeople to understand that there is no need to revisit the Awareness and Investigation stages; the customer is already educated and partially sold on the solution. The salesperson need only focus on the details of running demos or overseeing trials at this stage. Though no longer the primary player, Marketing can augment sales efforts by ensuring all product information pages – both online and print – are properly branded and readily available. Marketing can also provide testimonials that help customers visualize how the solution gets implemented. Also, Marketing may assist salespeople by providing a list of existing customers that are willing to talk with potential new customers and provide unbiased and honest opinions. The end result of the Evaluation Stage is that the potential customer is convinced your company has a solution that fully meets the urgent need and is now ready to make a purchase.

The Commitment Stage is the final outcome of all efforts to move potential customers toward a sale. Some unsettling problems can arise during this stage, and the Marketing and Sales departments must be ready to handle them. The main problem is that money is about to exchange hands, so customers will experience hesitation (a.k.a. cold feet) and will need reassurance. Inexperienced salespeople should avoid the knee-jerk reaction to slash prices; rather, the focus should be on the value provided to the customer. To that end, the Marketing department can help by introducing customers to the Support team, which provides reassurance that they are in good hands. Some companies go so far as to create “Customer Delight” departments to provide emotional support and a sense of love. The bottom line is that marketing efforts during this stage must focus on reassurance and value.

Marketing Engagement vs Sales Engagement
Note the box at the bottom of figure 1 that compares the relative involvement of marketing and sales. The early portions of the buying cycle are mostly handled by Marketing, whereas the later portions are handled mostly by Sales. The handoff point is generally somewhere in the middle, when the customer has met some pre-existing criteria (score) that warrants the attention of Sales.

The handoff from Marketing to Sales is gradual, not abrupt, and hence the graduating sloped line between Marketing and Sales in figure 1. Marketing activities do not end when customer contact information is “thrown over the wall” to Sales; rather, it only signifies the gradual migration of responsibility out of the Marketing department into the Sales department. The two departments work closely together and understand the respective roles each plays as the customer migrates through the Buying Cycle.

The Activity Spectrum
So how does all this information help the Marketing Campaign Manager decide which activities to pursue? The manager should consider each activity and its stage within the Buying Cycle and set up criteria to determine whether it is strong enough to support the goals of that stage.

For example, a trade show can be a highly successful mechanism to lead potential customers through the Investigation stage and into the Evaluation stage. An astute marketing manager will use blogs, articles and other social channels to reach out to potential customers in the Awareness stage and invite them to the trade show using special codes that can be tracked in a database. Also, potential customers already in the Investigation stage whose contact information has already been captured may be sent a personal email invitation to visit the trade show, again using a special invitation code that can be tracked. The success of the trade show could then be determined by:

  1. The number of customers pulled from the Awareness stage into the Investigation stage
  2. The number of customers traversing into the Evaluation stage from the Investigation stage
  3. The cost of the trade show

Each activity can be analyzed similar to the above trade show example, where the success rate can be analyzed in terms of the amount of customers that traversed through the stages and the cost of the traversal. This information should be sufficient to calculate a type of ROI, where it can be compared with other activities.

It All Comes Down to Metrics
The spectrum of activities available to marketing managers must be analyzed using metrics. Admittedly, this is not an easy task, because data must be captured and correlated from several disparate systems, such as Google Analytics, banner-ad click-thru reports, reports from SaaS marketing automation services such as AtTask, Marketo or Eloqua, trade show contact reports and back-end customer interaction reports from SalesForce. Additionally, internal metrics such as budget spreadsheets and resource hourly reports are required to provide the cost-basis upon which ROI can be calculated.

As difficult as it may be, the gathering and correlation of metrics is absolutely necessary in any marketing organization that seeks to optimize its business. Marketing managers may therefore need to employ IT programmers or similarly talented individuals to build the data pathways between disparate systems.

Historical data is a great resource to draw upon when it’s available; however, if a particular type of event does not have historical data, it may appear that there is no way to judge its worth beforehand. In these cases, managers should take a “Best Guess” approach and use anticipated metrics. Such metrics can serve as place-holders until they can be replaced with real metrics. Furthermore, whether or not historical data is available, anticipated metrics should be used because they can provide a sense of what to look for while the event is taking place. For example, when planning a regional seminar, managers can prepare questionnaires for the attendees; questions would pertain to how they learned about the seminar (online, print ad, email, regional salesperson, etc.) and what problems they are trying to address during the seminar. This information can help determine potential customers’ position within the Buying Cycle.

Conclusion
Marketing Campaign Managers are faced with a plethora of options when deciding what activities to pursue in their quest to raise customer awareness and, ultimately, sales numbers. The specific activities need not be a shot in the dark, however, provided that the manager understands the customer Buying Cycle and how each marketing activity fits within that cycle. Armed with this knowledge, marketing managers can break down each activity, understand its goals in the overall sales scheme and identify criteria for success. Careful measurement and analysis of the results can provide deep insight to the success of each activity and have influence over future campaign activities.

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