Purchase Process

How the purchase process is changing in the age of social media and mobile phones.

The assumptions about how people buy and interact with a company have changed.

The sales funnel used to work on the assumptions that buyers started with a long list of potential companies or brands to consider and narrowed their choices down to a few options to create a short list which they researched and then chose from. It also assumed that once someone purchased, their interaction with the company was based on their use of the product or service. New research shows this is not the case. Social media has changed that.

It's fast and easy to get advice and opinions from friends and colleagues.

Purchase Process: new thinking on how customers make buying decisions

David Edelman, a McKinsey consultant, writes in Harvard Business Review, "Consider this: Not long ago, a car buyer would methodically pare down the available choices until he arrived at the one that best met his criteria. A dealer would reel him in and make the sale. The buyer’s relationship with both the dealer and the manufacturer would typically dissipate after the purchase. But today, consumers are promiscuous in their brand relationships: They connect with myriad brands—through new media channels beyond the manufacturer’s and the retailer’s control or even knowledge—and evaluate a shifting array of them, often expanding the pool before narrowing it. After a purchase these consumers may remain aggressively engaged, publicly promoting or assailing the products they’ve bought, collaborating in the brands’ development, and challenging and shaping their meaning."

This is the premise of the consumer decision journey proposed by McKinsey based on research with 20,000 people.

Consider alternatives they know about
- "The journey begins with the consumer’s top-of-mind consideration set: products or brands assembled from exposure to ads or store displays, an encounter at a friend’s house, or other stimuli. In the funnel model, the consider stage contains the largest number of brands; but today’s consumers, assaulted by media and awash in choices, often reduce the number of products they consider at the outset."
Evaluate and expand their list to consider
- "The initial consideration set frequently expands as consumers seek input from peers, reviewers, retailers, and the brand and its competitors. Typically, they’ll add new brands to the set and discard some of the originals as they learn more and their selection criteria shift. Their outreach to marketers and other sources of information is much more likely to shape their ensuing choices than marketers’ push to persuade them."
Buy
- "Increasingly, consumers put off a purchase decision until they’re actually in a store—and, as we’ll see, they may be easily dissuaded at that point. Thus point of purchase—which exploits placement, packaging, availability, pricing, and sales interactions—is an ever more powerful touch point."
Enjoy, advocate, bond
- "After purchase, a deeper connection begins as the consumer interacts with the product and with new online touch points. More than 60% of consumers of facial skin care products, my McKinsey colleagues found, conduct online research about the products after purchase—a touch point entirely missing from the funnel. When consumers are pleased with a purchase, they’ll advocate for it by word of mouth, creating fodder for the evaluations of others and invigorating a brand’s potential. Of course, if a consumer is disappointed by the brand, she may sever ties with it—or worse. But if the bond becomes strong enough, she’ll enter an enjoy-advocate-buy loop that skips the consider and evaluate stages entirely."

Here's a link to the full article in Harvard Business Review by David Edelman.

From our experience: this is an outstanding foundation to understand how people make buying decisions. We think it would be enhanced by noting that:

There are "off ramps" all along the way where prospects choose not to consider or advocate a brand or company. It's important to understand what accelerates a purchase decision process along with what stalls it.
Only a small portion of customers "bond" and advocate a brand or company. Many people buy most things because they are "good enough". They don't love the product, service or company. It meets their needs.
Some people are by nature are extroverts who frequently and widely share what they think about a brand, company or non-profit. Social media sites like Facebook, Twitter and LinkedIn make this easy for them to "gain an audience". It's like anyone can get on the karaoke stage.
Most people listen instead of sharing anything. They watch and observe how the extroverts "sound off". They also watch how the company responds, especially to negative comments.
Some people are more like resource librarians who don't share unless asked. These people tend to be seen by friends and colleagues as knowledgeable people who will tell them the truth and offer credible pros and cons. Think about who you go ask when you want to buy a new TV. It's probably not the early adopter gadget guy who gets everything that's new. The more credible advisor is probably someone who reads a lot and is more cautious and objective.
Marketing needs to continue to get the word out and also adjust to address customer and prospect complaints and nurture existing customers to create brand fans who will share positive word of mouth and defend the brand.

Google is promoting the concept of ZMOT (Zero Moment of Truth). Learn more about that idea and the view of the increased importance of search and mobile phones in the customer purchase process.

The Purchase Process

During the pre-purchase stage of the process

People may go through each stage of being: unaware; aware; consideration; preference; purchase. Or, they may never proceed from one step to another. Or, they may move very quickly from one step to another for a product they purchase frequently.

During these stages, prospects are learning, comparing and researching alternatives and then shopping for price and perhaps availability and terms.

Market research can help to understand what is most influential at each of these stages. Things to consider: word of mouth, advertising, PR, company and third-party websites, reviews, product/service demonstrations, sales reps, distribution and competitive experiences.

TIP: With people seeking the advice and input of their friends and colleagues, it's important that a company's marketing messages are credible. Don't oversell and overpromise. That will backfire. Messaging research can help you identify what words to use that customers use to describe the benefits of your product, service or company.

Customer stages in the post-purchase process

Customer stages after they've purchased...

Nearly new
- Nearly new customers may be in a "honeymoon stage," or the complete opposite, questioning if this was a good purchase decision or not. And they may be deciding whether to make a return because the company/product or service hasn't lived up to their expectations.
- They are vulnerable. They have no loyalty; they are open to switching companies or products; they are deciding if there's any buyer's remorse. And they are seeing what it's like to be a customer versus a prospect.
- The good news is that nearly new customers are teachable: At this stage they may be very open to learning how to use the new product or service.
- Customer Contact Plans
- Email Newsletters

Established Customer
- Established customers may buy certain products/services but not across the product or company line.
- They may want to know tips on how to avoid problems.
- These customers may have settled in and know what functions/features they have learned how to use and may not want to invest more time. Any new software is an example of this phenomenon. You learn how to use what you need and disregard all the "bells and whistles."
- Are they: Loyal? Being an advocate and recommending to others? Complacent and just resigned to continue buying?
- How to Sell More to Existing Customers
- How to Get More Referrals
- How to Measure Customer Satisfaction
- CRM (Customer Relationship Marketing)

TIP: every company should be monitoring what people are saying online. There are a lot of free tools and some paid services that make this "eavesdropping" on public conversations easy. How to Monitor Online Buzz explains how to do this.

Ready to buy again
- The key is to anticipate when someone will be ready to buy again and to be proactive in reaching out to them before that with a relevant message or offer.
- Have you anticipated when these customers will be ready to buy again? A lot of advertising for consumer products is called "reminder advertising." Email newsletters can work the same way to help keep your company/product/service top of mind.
- Have you sent reminder messages or triggered the sales team to contact the buyer?
- Would some type of customer loyalty program help keep more customers?
- Trigger Events That Indicate Someone Is Ready to Buy

From our experience: You always need to be filling the sales funnel and nurturing your existing customers and prospects. Email marketing makes this easy and inexpensive to send newsletters and short relevant emails. Then, depending on your business, you may want to also integrate "personal touch" calls, handwritten notes and invitations to special events, and perhaps even a direct mailer or two. Some messages will only be relevant to new customers or prospects. Others only to your very best customers. Your business customer contact plan should be personalized to like-minded groups of customers. Learn more about Customer Contact Plans.

Purchase Process - the purchase process is changing in the age of social media and mobile phones. It's fast and easy to get advice and opinions from friends and colleagues.
Trigger Events in Marketing that indicate someone may be ready to buy. Certain events, milestones, or seasonal activities may indicate that people are ready to buy. Identifying these "triggers" and reaching out to customers at the right time with the right message is a great way to attract new customers.

Contact Plan - how to create a customer contact plan so that you are sending customers and prospects the most relevant information at the right time.

ZMOT Zero Moment of Truth - Google's view is that search is now integrated throughout the buying process because of mobile phones and customers wanting to be smart buyers.

Buying Process - How to sell more by helping prospects at all nine stages of the buying process.

How to Sell Online - learn what to do to sell online

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Purchase Process

Purchase Process

Purchase Process: new thinking on how customers make buying decisions

The Purchase Process

Customer stages in the post-purchase process

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