If you’re in sales, you should really be keeping the purchasing cycle at the forefront of your mind throughout all your commercial activities.
Put simply, the purchasing cycle encompasses distinct stages through which a customer moves before buying a specific product or service. Sounds important, right?
It is! This article will provide you with the background information you need to fully understand and utilize the purchasing cycle in your sales, including advice on how to identify the motivations in different types of buyers and an outline of the five steps that need to be taken before you can close a deal.
What is the Purchase Cycle?
Expanding on the definition above, the purchase cycle is a process in which a customer decides to buy something. You can think of the purchase cycle as a roadmap that your customers will unconsciously follow on their journey to a purchase. Along the way, they’ll make stops at certain waypoints—these are the purchasing cycle steps. It is important to understand what brings a customer to each step in the cycle, and what is needed to move them onto the next step.
Purchasing Cycle Steps
There are five steps involved in the purchase life cycle, all of which align closely with buyer psychology. That is, throughout the purchasing cycle, the customer will transform from a motivated, or interested buyer to a fully conscious actor who is ready to close on the deal. Let’s look at the steps in more detail.
Step 1: Motivation
The first step of the purchasing life cycle is initial interest, or motivation. This step involves how much customers already want to buy a product or service. In the motivation purchasing stage, a customer will have a driving problem motivating them to want to obtain a product or service. Buyers are interested in many things based on their priorities and motivations over time. Thus, their motivational direction will determine whether their interest level is high enough for them to continue their movement and to go to the next phase.
Step 2: Education
The second stage in the standard procurement cycle is education. If a buyer is motivated past the initial interest phase, they will require more information on what they can do to satisfy the need they have developed. Salespeople usually respond with Feature/Benefit selling techniques. For example, a clothing store might first highlight the many different styles of jeans they have in the store and then give information about the low pricing of their jeans to influence a customer’s purchasing decision.
Step 3: Validation
Now comes the most interesting part of the purchasing cycle: transfer of ownership, or validation. In this part of the procurement process, the customer either gets on board or stops the buying evaluation. This is a make or break moment where the customer takes ownership of the solution being offered, decides to stay in the education mode, or stops the evaluation altogether.
Step 3 requires the customer to start thinking through how they are going to use the product or service. In this stage, buyers might be considering things like “how do I install it?”, “how will it make life easier?”, or “how will it make me more money?”. It is vital that during this stage of the cycle you make the customer understand how they can use the product or service being offered and make them see the benefits.
Step 4: Rationalization
Once customers have completed the transfer of ownership, a unique thing happens. They start to consider questions such as, “is this the right time to make a decision like this?” or “have we looked at enough options?” When buyers are in the rationalize phase, they may come up with objections, get cold feet, develop buyer’s remorse, or get stuck at the final step.
Many salespeople do not anticipate the customer having to go through a final rationalization process within the purchasing cycle. However, after completing a transfer of ownership and proceeding up the decision path, buyers need one final justification or rationalization.
Often in the procurement process, the larger the sale, the more time a customer spends in this stage. However, buyers who stay in the Rationalization phase too long tend to see the proposed solution now as too old or not current; or, after having slept on it, still cannot make a decision. The key takeaway is that buyers need to rationalize a purchase before they make a final decision. The proactive salesperson is aware of this step and uses proactive tools to stay in control of the sale.
Step 5: Decision
The actual decision is the final buying step. If a customer has gone through the buying cycle and is still motivated, they will make a decision. “Closing” means obtaining a final purchasing decision, either yes or no, without delay. Yeses are great, noes are great (for different reasons); it’s the maybes that will kill you. Time is the enemy here, and here is where most salespeople make the biggest mistake.
Buyers don’t “close”: they make decisions based on the buying process that has just been described. The customer should feel like the close of a deal is just the final step in a natural buying process. There are no high-pressure (money-losing) tactics here, just some tools to help the customer through the final step of his buying process.
Unpacking Buyer Types
Now that you understand the steps of the purchasing cycle, let’s consider the start of the entire process: motivation. Recall that for the procurement process to begin, customers must have an initial interest in purchasing a specific item or service.
And while important, initial interest is not enough to drive the buyer to make a purchase. The most important aspect of the customer buying cycle is motivation: motivation is the customer’s reason for taking action to fulfill a need or desire, or to follow through on an initial interest.
So what can you do to drive buying motivation? The first step is to understand the two types of buyers and how their motivation might differ.
Procurement Process Motivations
There are two motivators that affect a customer’s final purchasing decision: pain and pleasure. Therefore most buyers orient their behavior around the avoidance of pain or the obtainment of pleasure.
Salespeople should focus on customers’ motivation direction, because it includes a time and motion element. Motivational direction directly addresses the pain/pleasure motivation of a buyer. Customers who focus on the avoidance part of pain are known as AWAY buyers, and customers who focus on the attainment part of pleasure are called TOWARD buyers. Buyer type is at the core of the purchase cycle.
Types of Buyers
Customers are either “TOWARDS buyers” or “AWAY buyers.” They tend either to move away from pain or towards pleasure, which affects their buying patterns.
AWAY buyers will always be focused on the negative part of the sale. Their purchasing decision is motivated by the avoidance of something. When asked a question like, “Why would you buy a new TV?” AWAY buyers would respond: “The old one just isn’t working right” or “It doesn’t have the features on it I need.” Since they are moving away from some sort of pain, it is most helpful to motivate an AWAY buyer by telling them what they cannot have, will not get, or will lose by not purchasing a specific product or service.
TOWARD buyers want the latest, coolest thing, identifying only positive, forward-moving reasons for purchasing a product or service. They would have a very different response to the same question, saying, “I like the new features” or “It will fit great in my living room. Further, TOWARD buyers don’t express any thoughts on the previous product, but focus on the desirable features of the new one.
How Buyer Type Influences Purchase Cycles
Between 70 and 80 percent of the world’s population are AWAY buyers. However, most companies’ sales literature takes a positive spin, pronouncing the latest and greatest features and functions about their product or service. This tactic inadvertently caters only to TOWARD buyers. Although salespeople shouldn’t forget about this type of buyer, they must remember that the vast majority of customers are AWAY buyers. Therefore, companies should focus on what customers won’t get, can’t have, or can avoid doing to increase the likelihood of a purchase. Only then will they get the attention of 70+ percent of the audience.
There are certain “direction” words relating to each type of customer. For AWAY buyers, salespeople should use terms such as stop, avoid, less, before it’s too late, and prevent. For TOWARD buyers, the sales approach should include terms such as great, new, improve, 40% better, and act now.
If about 80 percent of buyers are AWAY buyers at beginning stages of a purchase, then businesses should make sure they have more AWAY words and questions in initial communications. To be successful in the purchase cycle, suppliers must figure out what their buyers are trying to do to increase the likelihood of customers making a purchase.
Salespeople should pay attention to the stages involved in the purchase order life cycle to be successful in different interactions with buyers. It is important to use marketing techniques that target both AWAY and TOWARD customers, in addition to ensuring that all steps of the purchasing cycle are given enough attention.