It seems like such a simple question, but if your company hasn’t defined and mapped the process your customers go through to make a purchase decision you are just guessing and guessing can cost you time, money and market share.
According to CSO insights and other research organizations, many sales organizations haven’t taken the time to map and align the stages of the buying and selling process. Instead sellers are sticking with the archaic notion that the only important stages are those in the selling process. Nothing could be further from the truth.
Let’s start with a simple chart that shows the steps of both a typical buying and selling process. You and your client will benefit by discussing your specific respective processes early on. While we show these as stages others may prefer to call them phases or milestones.
Stages in the Buying Process
While there are many differences in how companies buy, the buying process for most organizations traverses through seven stages.
- Introspection: Often a buying process is triggered when a potential customer is exposed to external stimuli such as ads, television commercials, trade show information, published reports etc. that cause them to take a closer look at unmet needs of the organization. Think of the commercials prior to Apple’s launch of the first smartphone. They created the awareness of possibilities that didn’t exist and in many cases were not even imagined by many people.
- Problem Recognition: At some point introspection may lead to awareness that some unmet need is hindering the organization’s performance. Customers realize that they may want to better understand their situation and how others in the organization view this unmet need.
- Problem Definition: Once a problem is recognized, the customer may attempt to define the problem. What are the causes? What is the scope and size of the problem? How urgent is the need for change? What are the economic consequences of not changing?
- Solution Image: At this point a customer may formulate an image of the ideal solution. What would a solution look like? How quickly would it address needs? What would it cost? What suppliers are able to provide the solution? At this juncture, customers may send out RFPs or inquiries to engage suppliers and discover their qualifications.
- Qualify Suppliers: At this point in the buying process, customers may include Purchasing or members of the technical team to establish specifications and evaluate supplier credentials. In this stage customers often have a preferred vendor in mind.
- Selection: The Selection stage can be automatic when an existing supplier has capabilities that align with the newly recognized needs. The process can however, become long and complicated when no one vendor seems to demonstrate an ability to meet the unmet needs that are driving the buying process.
- Purchase Order: In most buying processes the issuance of a purchase order is automatic. However, the seller needs to investigate (early in the buying process) the source of funding. Who controls the funds? Do the funds come from more than one source?
Understanding the Buying Process
- The buying process answers three simple questions: “Why do something?” “Why do it now?” and “Why you?”
- Buying influences (not sellers) control the purchase process. Understanding the Buying Process – and where Key Buying Influences are in the process – is key to your Selling Actions and resource commitment.
- Most organizations have a regulated buying process with a defined number of stages. These stages may vary as the result of the size/scope of the purchase, nature of the product, buyer expertise, market and industry. In some organizations the seller may discover more than one buying process.
- The most common problem in defining the buying stages is the temptation to rely solely on the input from the sales organization instead of from the buying team (especially your Coaches). Members of the buying organization are familiar with informal processes, political issues, preferred measures and competing projects—all of which may influence how purchasing decisions are made.
- There is a beginning and an end to both the buying and selling process and for each stage of the process. Each stage can be defined by the number of days (from shortest to longest) that it takes to complete that stage. While it will vary, historical information can assist the seller determine its length. The total number of days from beginning to end is the length of the buy/sale cycle.
- Each stage should have a specific Action Commitment that must be achieved to move an opportunity to the next stage. This should be a specific, measurable action(s) to be completed by the buying influence or customer. These are often called exit criteria or observable evidence.
- While the buying process is depicted as linear in the diagram not all buying influences may be at the same stage. Sometimes, especially early in the buying process, individual buyers may be at different stages. This is especially true when there are many individuals providing input on the purchasing decision or when a committee is involved.
- It is not uncommon for one or more buyers to regress in the buying process as the result of new information that alters their perception of the project’s scope, size or urgency. Many factors may contribute to regression. A new buying influence may join the buying process – or a key Buying Influence may exit the process. External conditions may impact the buying organization’s priorities. When they regress in the buying process, the seller needs to identify the stage, the factors that prompted change and adjust their selling strategy and resources accordingly.
- When one or more buying influences gets lodged at one stage, the buying process can become stalled. Progress is unlikely unless the seller, or Key Buying Influence with high degree of influence/authority (or some external factor) helps motivate change.
- Buying influences can exit a stage at any time. This often occurs as the result of change: priorities shift, changing personnel and acquisitions.
- Understanding each customer’s stage is key to moving them to the next stage and closer to making a decision.
Aligning the Buy/Sell Process
Once a seller has an understanding of the buying process, the challenge is to make sure the buying and selling processes are aligned. It’s easy for sellers to surge ahead of the customer. What happens when the buy/sell processes aren’t aligned?
- Deals become “stuck in the Funnel” and your ability to forecast business loses credibility
- Sellers have limited Valid Business Reasons for communicating with Key Buying Influences
- Customers view sellers as demanding or unresponsive.
Having a defined buy-sell process allows others in the organization to learn what top performers are doing to win sales so they can identify and share best practices. It also allows for more meaningful “must-win” deal reviews because a Front Line Sales Manager can immediately understand where the opportunity resides in the buying process. Lastly, it ensures that each opportunity is correctly placed within the sales funnel.
Mapping the buy-sell process is not a luxury–it’s a requirement for most organizations to be successful today. The statistics don’t lie. In 2015 the average win rate of forecasted deals was 45.9%.1 In craps the odds of winning are 49.3%. Therefore, you have better odds in Las Vegas than with your forecast. If you haven’t mapped the buy-sell process do it now! If you need help, contact us. Our references can attest to our effectiveness.
- Data from CSO Insights
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