Customer Lifecycles



Customer Lifecycles

by Tim Smith, PhD, May 13, 2002 |  |[pic] | |

| |  |  |  |

|  |Much to their detriment, many businesses in B2B markets consider issues of consumer buying behavior theory |

| |irrelevant. While much of customer lifecycle theory originates in B2C marketing, it can be profitably mapped|

| |into B2B marketing and sales. |

| |The basic sequence according to consumer buying behavior can be listed as follows: Goal Activation, |

| |Awareness, Attribute Learning, Benefit Prediction, Product or Service Choice, Experience and Learning, and |

| |Relationship Growth. The same process applies to B2B markets as well. |

| |Goal Activation: Goal activation refers to the consumer identifying that their state of existence could be |

| |enhanced in reference to a goal state. Consumers either see an opportunity to raise their current state of |

| |satisfaction or are responding to a drop in their historical state of satisfaction. In consumer markets, |

| |people make purchases either because ice-cream will make them happier or they have to replace a blown-out |

| |tire. In business markets, the product or service might either enable the firm to capture increased profits |

| |or help them to deal with a process that is no longer working. Some sales literature refers to these buyers |

| |as being in either growth mode or trouble mode . When firms aren't in either of these states, salespeople |

| |either attempt to make them uncomfortable or seek the opportunity to which they are apparently oblivious. |

| |Awareness: After a consumer becomes aware that they can change their state of happiness or profitability, |

| |they then need to become aware of a possible solution to their problem. Fostering awareness is a core |

| |function of marketing but is often shared with the sales force as well. For consumer markets, awareness is |

| |sometimes stimulated with point-of-purchase displays, advertising, direct mail, and telemarketing. Business |

| |markets use many of the same tools: advertising, trade shows, direct mail, and telemarketing. |

| |Attribute Learning and Benefit Prediction refers to consumers investigating a product or service. For |

| |consumer products, Attributes and Benefits might come from reading labels or hearing. It \'s magically |

| |delicious a few thousand times. In hi-tech business markets, the same tools are used to communicate |

| |feature/benefit learning & and more. Features and Benefits are communicated in business markets using a |

| |variety of means: web sites, customer visits, technical sales, white papers, and user meetings, to name a |

| |few. I refer to this stage in the buying process as Consumer Investigation. As business people, our role is |

| |to guide and manage the Consumer Investigation process to lead the prospect to an obvious conclusion: Our |

| |product or service is the best for your situation. |

| |Finally we get to Choice. This is where the sales exec should come in and behave as the hunter that she. The|

| |job is to close the deal whether it is in consumer markets or business markets. Choice will reflect both |

| |short term issues, such as instant gratification or getting rid of the sales person, and long term issues |

| |such as a better upgrade strategy or clearer relationship building process. When it is said that sales |

| |people own the customer in business markets and marketing owns the customer in consumer markets, they are |

| |referring to the process of Choice. |

| |Experience and Learning: The consumer or business has purchased the product and is learning its value. For |

| |consumer products, the experience might be that people notice the motorcycle to be a BMW built for long |

| |rides and hot curves. For business products and services, consumers might learn the added features of Office|

| |XP that enable efficient management of contacts or performance of mail merges, or they might learn that the |

| |Customer Support Representatives (CSRs) are able to actually help the firm deal with a down system within 24|

| |hours (crucial for mission critical systems). For B2B markets, experience and learning is an important |

| |element in gaining repeat purchases, cross-selling, or account referencabilty. In designing a customer |

| |management campaign, these aspects of customer management are critical to the longevity of the firm in |

| |thinly traded markets. |

| |For the Awareness and Consumer Investigation processes, it is imperative that business leaders in both B2C |

| |and B2B markets consider cost efficiency and depth of message in relation to the medium of choice. It is |

| |also true that you can't bull-rush the process. Businesses selling to businesses must treat the prospect or |

| |buying committee as professionals that will make an informed choice based upon the perceived economic |

| |benefits. While emotions enter the process, the emotional sale must match the logical sale to minimize |

| |cognitive dissonance that could delay a purchasing decision indefinitely. Likewise, the experience and |

| |learning aspects must match the sales message. Without matching the message with the deliverable, the |

| |installation team will learn that it has to match an impossible deadline for a project scope that is |

| |ill-defined, or the product team will learn that customers request an innumerable amount new features. |

| |Consumer behavior isn't just a function of consumer markets, nor is it a function of large volume markets |

| |alone. The knowledge and theory of consumer behavior is a domain to be utilized by all businesses in |

| |capturing revenues profitably. |

| |--- |

| |Tim Smith, PhD is a principal at Wiglaf, a Market Research and Sales and Marketing Strategy consultancy |

| |serving tech-driven businesses operating in business markets. Small and medium sized businesses select |

| |Wiglaf for our quantitative and fact driven approach. . |

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