The 7 Stages of the New Buying Cycle
By Jack Warkenthien, CEO of NextStep Solutions
Last year, I chose to rewrite my original sales tome, “Life’s A Sales Call: How to Succeed in the World’s Oldest Profession”. Since it was first published in 2005, the content was a decade old, so imagine the changes that have occurred in the sales and selling arena. For past readers, the epiphany will be the fact that, today, it’s far more important to learn how people buy than learn how to sell to them. For starters, by the time you’re aware of a sales candidate, more than 57% of the buying decisions have been already made (according to the CEB study-The Challenger Sale), and there are probably 5.4 decision makers involved in the purchase. Scary? Yes, of course! The reason is because there is so much more information now available online that purchasers are doing their own research instead of trusting you to provide them with what they need to know. So let’s first review the traditional buying cycle.
The 4 Traditional Stages of the Buying Cycle
So how has B2B (business-to-business) buying changed in recent years? During my research, I realized that one of the most significant changes lies in the stages of the buying cycle. More or less, there’s a set process we all go through when making buying decisions from a series of steps designed to help us go from uninformed and curious to investing our cash in a solution that solves our problem or addresses our challenges. Regardless of the exact terminology used, the basic buying cycle resembles the following (the equivalent sales cycle stage that correlates is in parenthesis):
- Stage 1: Awareness (Discovery). We become aware of a problem, need, challenge, or opportunity and this leads to dissatisfaction and a desire to take action.
- Stage 2: Outreach (Matching). We reach out to others, conduct research, and speak to potential vendors in an effort to understand the myriad of potential solutions that exist and match the ones that best fit our needs.
- Stage 3: Selection (Resolving). During the research phase, we develop a preference for one particular vendor or solution. Since buying is an emotional decision, one solution becomes our emotional favorite and that horse moves to the front of the track.
- Stage 4: Purchase (Opening). We purchase the desired product or service, thereby addressing the problem or challenge identified and meeting our needs along the way.
The 3 New Stages of the Buying Cycle
The universe of buyers has changed pretty dramatically in recent years. Procurement has risen from being an administrative function to more of a strategic player on the corporate stage as there are much higher stakes when things go wrong. With the internet becoming such a ubiquitous, on-demand, open source of information, content marketing and thought leadership is available to anyone with a browser. Finally, the ground has been leveled between new start-ups and long established businesses due to the new affordable technologies available to all comers. All of these factors have had an incredible impact on buyer behavior and specifically on the steps your buyers take when considering the purchase of new products or services. In addition to the 4 traditional buying stages, there are 3 new ones to understand:
- Research: After the Awareness stage, buyers now take advantage of all the digital information available on products, services, and vendors. The new Research stage is probably the most important NEW stage because of the extensive information now available to the public. In Sales, you should find ways to support your buyers by providing them the information that’s needed to make an informed decision. This is your chance to be a thought-leader, trusted advisor, and buyer’s consultant, instead of a sales rep.
- Collaboration: Following the Outreach stage, your buyers expect collaboration with you instead of manipulation, self-serving, and short-term focused thinking. Buyers are tired of being sold. Over the years, they’ve read all the same books and seen all the tricks. Buyers value savvy, well-educated, and informed sellers who act more like management consultants than peddlers. They are open to collaborating on finding the right solution for them and not simply told what to do or buy.
- Negotiation: Once the Selection stage has been complete, know that buyers will attempt to negotiate everything! Welcome to the new reality. Everything is negotiable and we’re not just talking price. In today’s procurement world, all items are on the table including payment terms, project scope, intellectual property utilization, etc. Not only will the buyers be negotiating with you, they will often be negotiating with several vendors at the same time. Savvy sellers understand that in the new world, buyers hold more power than ever before.
Here’s the silver lining for you sellers – If you invest the time to educate the buyers with new ideas and perspectives, collaborate honestly with them, and help them discover the superior value your product delivers, not only will you win the deal today but you will have built a long-term, mutually beneficial, prosperous relationship for the future.