Customer Buying Cycle

It is important to understand your customer’s buying cycle so I created this graph to help you understand it. Regardless of the business you are in this buying pattern holds true. Your understanding this model will help you in managing the relationship that you have with your customers. Each of these phases can be performed online. Today most consumers perform at least one of these phase activities online and are increasingly moving to performing the majority of these activities online.

The cycle begins with the research phase. During the Research phase consumers endeavor to find as much information as necessary to make them feel comfortable regarding the products of interest. This phase includes understanding features, comparisons, and cost. Many times consumers search the internet by keywords looking for product explanations, reviews, and ratings to assist them in become informed.

The next phase is Selection. This is the phase in which based on the information gathered in the research phase the consumer makes a value based decision regarding which product to purchase and from what vendor. Many businesses make the mistake of assuming that the selection in cost based. However, this is completely false. Consumers make their selection based on perceived value. Customers will select a higher cost product over a less expensive product, if the perceive the value of what they are purchasing as being high. Also, factored into the selection is who they are buying it from.

The third phase is Purchase. This step can and many times is done online however; certain products consumers still and perhaps will always fell more comfortable purchasing from a brick and mortar location.

The next two steps are Use followed by Evaluation. Based on the consumers’ experience of using the product they make an evaluation. Usage involves not only the function of the product (what it does) but also experience (how it got done). Online support tools help to increase the user experience. Based on the consumer’s experience they make an evaluation of the products. A product that may not function as high as expected might still receive a high evaluation if the experience is high.

The final step is Recommendation. This is the most important phase of the lifecycle for business owners. Your products and services live and die based on recommendations. It cost more to regain a customer then it does to keep a customer. A consumer may only a few people about a positive experience but they will tell many more about the bad experiences. Now on the internet disgruntled consumers can blog your business to death.

Understanding each of these phases and putting together a strategic plan to address each of them will have a tremendous affect on your business.

Byte or get bitten!