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ProductGuy.in | Murali Erraguntala
COMPREHENDING CUSTOMER
BUYING PROCESS
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Comprehending CUSTOMER BUYING Process
Table of Contents
INTRODUCTION .............................
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INNOVATIVE OR FLEXIBLE PRICING .............................
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Introduction
I have earlier authored couple of eBooks (do...
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Comprehending CUSTOMER BUYING Process
The eBook is an attempt to identify attributes that contr...
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Comprehending CUSTOMER BUYING Process
Need to comprehend customer buying process
Did we ever po...
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Comprehending CUSTOMER BUYING Process
an indispensable need to comprehend the psyche of custome...
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Comprehending CUSTOMER BUYING Process
Tolerance Price
Do customers always follow a rigorous or ...
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Comprehending CUSTOMER BUYING Process
The underlying tenet is price dictates the rigor involved...
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Comprehending CUSTOMER BUYING Process
Dissect the buying process
Need is the first step of the ...
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www.ProductGuy.in
Comprehending CUSTOMER BUYING Process
Apart from identifying what causes customers to quit the...
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Comprehending CUSTOMER BUYING Process
derived by Bryony Thomas in her book – Watertight Market...
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Comprehending CUSTOMER BUYING Process
Buying stages of a car
For ease of discussions, I will h...
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Identify customer engagement points
With the advent of m...
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Who owns engagement points
Product Manager does not own ...
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Stage 1: Customers will be aware about new cars either t...
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Facilitate customers to make right buying decisions
Cust...
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know why they select one over the other. I bet customers...
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Customer information needs across buying stages
Without ...
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to customers. Customers only express interest in solutio...
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What information do Intuit, Vedantu.com and Freshdesk pr...
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Information
The engagement points in the information pha...
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On similar lines, in case of SUV with strong off-roading...
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customer to test how the product can fit in their enviro...
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Apart from identifying the kind of information required ...
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 Evaluation: How the car performs – Reviews by independ...
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Validated Learning
Product Manager has to understand the...
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Identify causes for churn
For effective validated learni...
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In my fictitious example, I assume 80% of TAM will expre...
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In this situation, Product Manager might have to rely on...
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Importance of perception
Why is perception important?
Ho...
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largely for better product-market fit. Nevertheless, doe...
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3. How do you want customers to perceive the product?
Le...
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The marketing campaign or the engagement points, albeit ...
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How to create a perception?
Amazon is known for putting ...
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be focus on perception enhancing events through ratings ...
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How long buying process does lasts
There is no one singl...
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Engaging in a dialogue with customers to precisely under...
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To build an effective product finder page, identify the ...
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Know the decision maker
It is a classic case of determin...
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emerging needs of customers and Product Manager should a...
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buying process. If planned well through providing approp...
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Otherwise, Product Manager has to figure out how to redu...
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Necessity for tools
Throughout this entire eBook, I have...
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 How many leads were lost?
o Why did customers not choo...
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possibly migrated to any other product or migrated to co...
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Concluding Thoughts
Product Managers are often obsessed ...
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Comprehending Customer Buying Process - To Sell Better

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The eBook is an attempt to identify those attributes that contribute to product success by teleporting Product Manager into minds of their customers to understand the psychology behind the buying process of customers. At every step of the buying process, right from awareness to either a successful or unsuccessful sale, Product Manager has to understand WHY behind every decision of the customer. I would be extremely happy and humbled if this eBook is successful in dissecting the buying process and let Product Manager know what happens at each stage of the buying process.

The eBook can also be stated as an attempt to reverse engineer the buying process of customers. Product Manager should always start with an end in mind (i.e. a successful sale) and work backwards to understand what factors would contribute to a successful sale of the product. Comprehending customer buying process by Product Managers provides a unique opportunity to identify those factors that can positively influence a sale.

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Comprehending Customer Buying Process - To Sell Better

  1. 1. ProductGuy.in | Murali Erraguntala COMPREHENDING CUSTOMER BUYING PROCESS
  2. 2. Page | 1 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Table of Contents INTRODUCTION .................................................................................................................................3 NEED TO COMPREHEND CUSTOMER BUYING PROCESS .......................................................................5 TOLERANCE PRICE..............................................................................................................................7 DISSECT THE BUYING PROCESS...........................................................................................................9 STAGES OF BUYING PROCESS .........................................................................................................................10 BUYING STAGES OF A CAR .............................................................................................................................12 IDENTIFY CUSTOMER ENGAGEMENT POINTS ....................................................................................13 PURPOSE OF ENGAGEMENT POINTS ................................................................................................................13 HOW TO CHOOSE OR IDENTIFY ENGAGEMENT POINTS........................................................................................13 WHO OWNS ENGAGEMENT POINTS ................................................................................................................14 ENGAGEMENT POINTS OF BUYING PROCESS OF A CAR ........................................................................................14 FACILITATE CUSTOMERS TO MAKE RIGHT BUYING DECISIONS...........................................................16 EMOTION VS RATIONALE ..............................................................................................................................16 CUSTOMER INFORMATION NEEDS ACROSS BUYING STAGES .................................................................................18 Awareness ........................................................................................................................................................19 Information ......................................................................................................................................................21 Evaluation.........................................................................................................................................................21 Trial....................................................................................................................................................................22 Adoption ...........................................................................................................................................................23 Loyalty...............................................................................................................................................................23 ACT OF PERSUASION ....................................................................................................................................24 INFORMATION NEEDS FOR BUYING STAGES OF A CAR .........................................................................................24 ENGAGEMENT POINTS FOR EACH STAGE OF THE BUYING PROCESS........................................................................25 VALIDATED LEARNING..................................................................................................................................26 IDENTIFY CAUSES FOR CHURN..........................................................................................................27 IMPORTANCE OF PERCEPTION..........................................................................................................30 WHY IS PERCEPTION IMPORTANT? .................................................................................................................30 BUT, WHAT KIND OF PERCEPTION DOES PRODUCT MANAGER WANT TO CREATE?...................................................30 WHEN TO CREATE A PERCEPTION? .................................................................................................................33 HOW TO CREATE A PERCEPTION?...................................................................................................................34 HOW LONG BUYING PROCESS DOES LASTS?......................................................................................36 SIMPLIFY BUYING PROCESS – GUIDED SELLING..................................................................................................36 TALK ABOUT SOLUTIONS, NOT THE PRODUCT....................................................................................................38 KNOW THE DECISION MAKER.........................................................................................................................39 BE AVAILABLE AT THE RIGHT TIME AT THE RIGHT PLACE ......................................................................................39 HOW ARE YOU DIFFERENT FROM OTHERS?.......................................................................................................39 WELL PLANNED TRIAL – TO ARTICULATE THE PRODUCT VALUE.............................................................................40 COMMUNICATE THE ROI ..............................................................................................................................41
  3. 3. Page | 2 www.ProductGuy.in Comprehending CUSTOMER BUYING Process INNOVATIVE OR FLEXIBLE PRICING ..................................................................................................................41 INVENTORY MANAGEMENT – ELIMINATE THE LEAD TIME....................................................................................41 LASTLY, BE HONEST......................................................................................................................................42 NECESSITY FOR TOOLS .....................................................................................................................43 CONCLUDING THOUGHTS.................................................................................................................46
  4. 4. Page | 3 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Introduction I have earlier authored couple of eBooks (downloadable copy available at www.ProductGuy.in)  Building New Product – Experiences of a Product Manager  Pragmatic Approach for Building GREAT Product Roadmap In both those eBooks, I have extensively captured nuances of building and evolving a product that perfectly meets customers’ needs and as desirable by customers. Building such amazing products does not necessarily guarantee success. It is only a partial contributing factor to a sale as we are only creating value. In addition to creating value, Product Manager should later be communicate, deliver and capture value for commercial success of the product. Product Manager has to bring the product closer to customers by appropriately communicating its value. The primary intention of communicating product value is to make customers believe in the product, believe in what it delivers. Customers’ perception about the product should align with actual value delivered by the product. Apart from identifying what to communicate about the product (the actual message), Product Manager also has to identify how to communicate (format) and where to communicate (location). The objective is to create awareness about the product and try to gain mindshare among target customers. Creating awareness brings the product closer to target customers, but the task of Product Manager does not necessarily end with creating awareness. When customers enter the process of buying a product based on awareness, they invariably do not make a buying decision merely based on the product capabilities. Price, support, brand value, customer reviews, societal pressure and emotional factors play a vital role in deciding which product to buy. Product Manager has a huge task to identify those additional attributes that can influence the buying decision of customers, plan for existence of those attributes, and create an awareness about existence of those attributes to customers. Doing so, Product Manager can facilitate customers to make right buying decisions.
  5. 5. Page | 4 www.ProductGuy.in Comprehending CUSTOMER BUYING Process The eBook is an attempt to identify attributes that contribute to a successful sale by teleporting Product Manager into minds of their customers to understand the psychology behind the buying process of customers. At every step of the buying process, right from awareness to either a successful or an unsuccessful sale, Product Manager has to understand WHY behind every decision of the customer. I would be extremely happy and humbled if this eBook is successful in dissecting the buying process and facilitating Product Manager in clearly discerning what happens at each stage of the buying process. The eBook is also an attempt to reverse engineer the buying process of customers. Product Manager should always start with an end in mind (i.e. a successful sale) and work backwards to understand what factors would contribute to a successful sale of the product. Comprehending buying process of customers by Product Managers provides a unique opportunity to identify those factors that can positively influence a sale. Downloadable copy of the eBook is available at www.ProductGuy.in/eBooks/
  6. 6. Page | 5 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Need to comprehend customer buying process Did we ever ponder why does a Product Manager have to comprehend the buying process of each customer? What is the ultimate goal? In all my earlier eBooks and blogs, I have repeatedly stressed that merit of the product is only a partial contributing factor to a sale. There are additional non-product attributes that influence the outcome of buying decision of customers. There is always a classic case of good products failing because of improper positioning, irrational pricing, lack of proper messaging to communicate the actual value of the product (i.e. the perceived value of the product does not match with reality), or selling through inappropriate channels etc. I definitely bet most of us would have come across at least few PMs screaming ‘Oh GOD, I had built a wonderful product that perfectly meets customer needs and aspirations, why the HELL product sales are not increasing’. In case of restaurant where food is analogous to a product, ambience and location of a restaurant is as important as taste and choice of the food. In case of B2C, marketing does play a critical role in communicating the value of the product and establishing an emotional connect. In case of B2B, the existence of reliable support system, brand value, and distribution network are other important factors that complement the actual product. Non-product attributes are list of all those elements apart from the actual product that is crucial to success of the product. Both product and non-product attributes together should provide compelling reasons for customers to buy the product. To determine the list of non-product attributes that would influence a sale it is critical to understand the complete buying process of customers. Unless Product Manager determines and fulfills both product and non-product attributes, it is not possible to guarantee the success of the product. Therefore, there is There is always a classic case of good products failing because of improper positioning, irrational pricing, lack of proper messaging to communicate the actual value of the product or selling through inappropriate channels etc.
  7. 7. Page | 6 www.ProductGuy.in Comprehending CUSTOMER BUYING Process an indispensable need to comprehend the psyche of customers while making a buying decision. Accordingly, Product Manager can incorporate those inputs to evolve the product and fulfill non-product attributes in alignment with expectations of customers. Such efforts would ultimately culminate in delivering more revenue through successful sales of the product embraced by target customers. Even in case of not so better product, understanding and corroborating the buying process can also help Product Manager comprehend the lack of product attributes that is leading to either lack of sales or decline in sales.
  8. 8. Page | 7 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Tolerance Price Do customers always follow a rigorous or systematic buying process for all the products they purchase? The buying decision of every customer is invariably under the influence of either emotion or logic, sometimes both. Typically, in B2B (Business to Business), logic plays a predominant role. The objective of B2B customers is to understand RoI (Return on Investment) of the product in terms of price of the product vs business benefits fulfilled by the product. In case of B2C (Business to Customer), emotion might play a bigger role depending on the nature of the product. For instances, buying decision of cars, mobiles are governed by both emotions and logic (albeit in varying degree). Customers might not base their buying decision purely based on the utility value of the product. However, there are certain exceptions in B2C products, probably kitchen accessories – KNIFE, which customers buy purely for its utility value. Price of the product determines the amount of effort customers put towards making a buying decision. Every customer has a price range, generally referred to as a tolerance price. The buying process can be whimsical for any product priced within the tolerance price range. Customers do not really care much about evaluating the products within the range of tolerance price. Probably awareness about such products and ease of availability would be more important to a successful sale. The tolerance price point is not universal and it probably depends on the per-capita income of each individual (in case of B2C) and the % of overall budgetary spends (in case of B2B). Customers will only start evaluating a product through a rigorous buying process when the price of product is beyond the tolerance price range. The rigorousness employed by every customer during buying process is definitely a function of the tolerance price. Customers do not employ similar rigor for buying a car and buying a stationary item. Every customer has a price range, generally referred to as a tolerance price. The buying process can be whimsical for any product priced within the tolerance price range
  9. 9. Page | 8 www.ProductGuy.in Comprehending CUSTOMER BUYING Process The underlying tenet is price dictates the rigor involved in buying process. Quite obviously HIGHER the PRICE, HIGHER the RIGOUR and VICE-VERSA. Evidently, this eBook is applicable only for those products, whose price is beyond the tolerance price range. For products, whose price is within the tolerance price range, comprehending the customer buying process might not be worthy. The rigor employed by every customer during buying process is definitely a function of the tolerance price. Customers do not employ similar rigor for buying a car and buying a stationary item
  10. 10. Page | 9 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Dissect the buying process Need is the first step of the buying process. The need could arise because of different reasons (emotional, peer pressure, social influence, utility etc.). Once the need arises, customers start looking for a product that addresses their needs and explore matching products. The entire discussion or efforts to understand the buying process only make sense if customers adopt rigorous process to purchase a product. To comprehend customer buying process, I intend to dissect the buying process of a product into stages and start identifying all possible customer engagement points (both offline and online) at each of those stages. Engagement points are typically touch points that customers leverage to locate the product, know about the product, gather feedback about the product, evaluate the product, throw feedback about the product and finally to buy the product. Dissecting the buying process is critical to identifying the combination of buying stage and engagement point at which customers are quitting the buying process. Later to decipher what causes customers to quit the buying process during that particular combination of buying stage and engagement point. Such efforts can help Product Manager understand the lack of non-product attributes that is causing customers to quit the buying process. Sometimes, the cause could be attributed to lack of product attributes as well (missing functionality, lack of ease of use, unreliability etc.) As customers enter the buying process, not every customer journey culminates in a sale and it is sheer pragmatic sense on part of Product Manager not to expect 100% hit rate. Because combination of both genuine buyers and frivolous buyers enter the buying process, Product Manager has to isolate the genuine buyers for further identifying who among the genuine buyers are actual target customers and figure out what causes the target customers to quit the buying process. Identifying the exact set of causes is more easily said than done, but quest for answers can possibly help Product Managers expand the bottom line. Engagement points are typically touch points that customers leverage to locate the product, know about the product, evaluate the product, throw feedback about the product and finally to buy the product
  11. 11. Page | 10 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Apart from identifying what causes customers to quit the buying process. Product Manager has another fundamental responsibility to identify what information customers seek across various engagement points at each stage of the buying process. Product Manager should identify the information which when provided to customers would make their buying process easier and simpler. Identifying the causes for customer churn and identifying what information customers seek are strongly inter-related. Unless, appropriate information sought by customers is provided to them during buying process to simplify their decision making process, they quit. Unless Product Manager recognizes the reasons for customers quitting the buying process, it will not be possible to reinforce engagement points to provide relevant details that can possibly influence buying decision of customers positively. Engagement point need not always provide information sometimes they deliver experiences too. In case of restaurant, where food is analogous to a product, restaurant is an engagement point that delivers the experiences for customers to enjoy the food. While the review sites like Zomato (www.Zomato.com) or Yelp (www.Yelp.com) are engagement points that provide appropriate information for customers to decide which restaurant to go. Source: http://startitup.co/guides/374/aarrr-startup-metrics Stages of buying process The stages in the buying process vary depending on the product. Nevertheless, there are already well-defined stages such as AARRR (developed by Dave McClure) and six stages
  12. 12. Page | 11 www.ProductGuy.in Comprehending CUSTOMER BUYING Process derived by Bryony Thomas in her book – Watertight Marketing. I have listed them as a reference to aid in better discussions. Source: http://www.smartinsights.com/marketplace-analysis/customer-analysis/consumer-decision-buying- process/ All those stages are self-explanatory, so I avoid dwelling into details of each of those stages. As I had indicated earlier, the primary idea of this section is –  To identify causes for an unsuccessful sale.  To identify the right amount of information that should be equipped at each of the buying stages to facilitate customers to make right buying decisions. Let me be realistic first, Product Manager could not fix all. Ideally, the product cannot be everything to everyone. The idea is to figure out if the product is losing out to its target customers. If there are any personas that are ideal buyers of the product and if the product is losing on those customers, then Product Manager should ascertain the exact cause. Ideally, the product cannot be everything to everyone. The idea is to figure out if the product is losing out to its target customers.
  13. 13. Page | 12 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Buying stages of a car For ease of discussions, I will henceforth follow the 6 stages defined by Bryony. Nevertheless, the thoughts or suggestions put forward in the following section of the eBook will be applicable to any other stage approach of customer buying process as well. Figure 1 – Stages in buying process of a CAR I have constructed the buying stages of a car and a closer look will reveal that I have comfortably omitted the TRIAL stage. For me TRIAL makes more sense in case of B2B product where customers will trial the product free of cost for a longer duration (3-6 months) in their environment before they decided to purchase the product. For me TRIAL is a natural extension of evaluation stage where customers will attempt to evaluate the product very briefly. In case of buying a car, there would not be any detailed attempts to evaluate the car and therefore I thought it is appropriate to drop the TRIAL phase while ascertaining the buying stages of a car. Stages therefore referred in this article are only for reference and not for strict adherence. Depending on the nature of the product, Product Manager can either add additional stages or remove existing stages. What is critical is that Product Manager should identify an exhaustive list of stages for the buying process of the product. Otherwise it would not be possible to identify at which stage the product is experiencing customer churn and what information has to be provided at each stage to facilitate customers to make right buying decisions. Once Product Manager determines various stages of the buying process of the product, it is time to embark on the journey of identifying various engagement points within each stage of the buying process. Awareness Interest Evaluation Adoption Loyalty
  14. 14. Page | 13 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Identify customer engagement points With the advent of mobile, web and social media, the engagement points for customers to know about the product, to evaluate the product, to collect feedback about the product and to throw feedback about the product has only manifold. The task at hand for Product Manager is to identify exhaustive set of engagement points at each stage of the buying process. Purpose of engagement points The purpose of engagement points is to establish connection between the product and customers (both existing and prospective). Engagement points provide more details about the product in order to simplify the buying process of customers, solicit feedback on what customers think about the product and finally to deliver or enhance customers experiences with the product. The nature of interaction and communication between engagement points and customers can be bi-directional or unidirectional. Engagement points can take any form – personal, digital, social etc. How to choose or identify engagement points Product Manager should choose engagement points depending on how customers would like to interface with the product (in which form and in which location) at each stage of the buying process. All those drivers combined together define the engagement points at each stage of the buying process. Product Manager does not define all the engagement points. Customers also define few engagement points. For instance, customers dictate where to throw feedback about the product. Engagement points also need to evolve with changes in customer behaviors. Product Manager should either deprecate existing engagement points or introduce new engagement points in accordance with the changing behaviors of customers. Ultimately when, where, and how (timing, location, and format to share information) of each engagement point should be driven by customer preferences and conveniences. Engagement points should create a plethora of options for customers to engage with the product, therefore the criterion for selection of engagement points is not merely by choice but by convenience and preferences of customers.
  15. 15. Page | 14 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Who owns engagement points Product Manager does not own the entire engagement points. Especially in digital word customers have lot of opportunities in throwing feedback about the product and being candid about the product through social network sites. Product Manager can hardly control the outcome of customers, but should constantly monitor and control the situation before it gets out of control. There have been instances where companies have opened themselves to social networking sites such as Twitter but got embroiled in some of the worst social media crisis (e.g. Nestle) while others have been able to better manage the situation. Digital world is truly an open world and Product Manager should be wary about what is happening with his/her product and react cautiously. Social media is both a bane and a boon in terms of obtaining direct feedback. Every Organization should have sufficient expertize to manage the situation occurring through social media and does not spill it into a crisis. Nestle is a classic example of social media mismanagement1 . Engagement points of buying process of a car For sake of illustration, let me revisit the example of buying a car and list down all possible engagement points for each stage of the buying process. Awareness Word of Mouth/ Referral Auto Exhibitions TV/ Newspaper/ Magazine / Online Ads Car Shows in TV Personal Messages via SMS/Emails Interest Online (Car Website, Review Sites, Social Media) Car Showroom Auto Magazines Auto Exhibitions Evaluation Test Drive at Car Showroom or Friends/Family Car Review Sites Adoption (Buying) Car Showroom Banks (Finance/Loans) Company Lease Loyalty (Retention) Service Center On Road Assistance Social Media Customer Care 1 Source: https://www.wsj.com/articles/SB10001424052702304434404575149883850508158
  16. 16. Page | 15 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Stage 1: Customers will be aware about new cars either through TV /newspapers ads, word of mouth, referrals etc. Stage 2: Once the need to buy a car arises, based on the awareness customer will pick a set of cars. Customer will try to get more information about each of those cars either through online (car website, review sites or social media) or offline (car showroom or through friends/family or auto magazines). Stage 3: Customer will later try to examine the performance of each of those chosen set of cars either through test drive arranged by respective car show room or through friends/family who has owned the car or use review sites (like www.team-bhp.com – pretty familiar in India) for customer testimonials. Stage 4: Finally, customer will buy a car at a show room. Customer will interface with multiple banks for attractive credit option. Otherwise, customers can prefer to pay cash or buy though company car lease. Stage 5: Customer later shares his/her feedback or complaints based on his/her experience of using the car either through review sites (like www.team- bhp) or in-person to his friends or using social media or with service executives. Basic tenets for identifying engagement points  Engagement points in each stage of the buying process should be exhaustive  Engagement points across all stages of the buying process need not be mutually exclusive
  17. 17. Page | 16 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Facilitate customers to make right buying decisions Customers have certain expectations from product in alignment with their respective needs. During buying process, customers are actively on lookout for experiences or information that can provide sufficient details to identify whether the product can meet their expectations. As long as experiences or information provided by participating engagement points during each stage of the buying process matches or exceeds customer expectations, the journey would culminate in a sale. Therefore, the task of Product Manager is to identify what are the expectations of customers at each stage of the buying process and accordingly feed the engagement points at each stage with necessary data so they are equipped to meet the expectations of customers. Customers start their journey with a need for basic information about the product and as they march onto subsequent stages of the buying process their desire to know more about the product only increases. Journey of buying process starts with creating awareness about the product through feeding customers with basic information about the product (purpose, USP etc.). While seeking information, customers look for more details about the product. Later they evaluate the product to validate whether the product details provided at information and awareness stages are authentic. Customer testimonials, product trials or product demonstrations are some means to evaluate the product to ensure that the product delivers what it promises. Customers would reach evaluation phase if the information provided until then were convincing enough to buy the product. So evaluation phase is an opportunity to persuade customers that product delivers as promised to them in previous stages. Good news is that customers do not look for discrete information. The kind of information they want to know about the product primarily stems from initial messaging of the product in awareness phase. Emotion vs Rationale Buying is not always completely rationale especially in case of B2C, even in case of B2B where logic plays a predominant role in terms of determining the product-fit, ROI etc. somewhere deep down the role of emotion in the buying decision could not be downplayed. The information provided at various stages need not essentially be purely logical that can help customers rationalize their buying decisions, it should also facilitate some emotional connect. When customers consider two products equals, they do not always
  18. 18. Page | 17 www.ProductGuy.in Comprehending CUSTOMER BUYING Process know why they select one over the other. I bet customers might not have a rationale answer to it. The answer lies in emotional attachment to the brand. Classic example being Pepsi vs Coke, studies have been consistently proven that even for hard core fans of either Pepsi or Coke it is tough to differentiate the brand based on taste. Customers choose a brand because it invokes some emotions within them and customers take pride in associating with the brand because of those emotions. As Simon Sinek indicated in his TED talk on ‘Start with Why’, when customers believe in what the brand believes they strongly associate with the brand and customers take pride in such association. In case of B2B, emotional connect could be attributed to certain attributes like trust. While making a buying decision, there are couple of ways customers choose to evaluate a product. A strong brand association means that customers will always look for reasons to choose the product. Otherwise, customers will look for reasons to reject the product. In the former case, default decision is ‘YES, I want to buy the product’ and in the latter case, default decision is ‘NO, I might not want to purchase the product’. Unless the product is terrible in the former case, customer will never reject it. In the latter case, the product should be extra-ordinary and awesome for a customer to pick it. Stronger brand association would probably explain why ordinary products score better success than awesome products with little or no brand association. There is nothing wrong in being rationale and making sure that the product gets a tick mark against all customer requirements and expectations. It is also equally important to secure a tick mark against emotional factors as well. Nevertheless, how to identify what emotions to evoke within customers. Evoking certain emotions creates a perception about the brand, what kind of perception to create in the minds of customers determines what kind of emotions to evoke within customers. I talk more on this topic in subsequent section ‘Importance of Perception’. Customers choose a brand because it invokes some emotions within them and customers take pride in associating with the brand because of those emotions
  19. 19. Page | 18 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Customer information needs across buying stages Without any iota of doubt, Information needs across buying stages comprises of both rationale and emotional. Customers explicitly look out for information to rationalize their buying decisions and it should be available at right place in right format either as messages or as experiences. Simultaneously Product Manager should have plans to evoke consistent emotions through those messages and experiences across all buying stages. While we evoke consistent emotions across all the buying stages, the information shared through those messages and experiences for rationalizing buying decisions have to be sliced and diced according to each buying stage. Understandably, the information needs of customers to rationalize their buying decisions across all stages of buying process do not remain same. It hardly makes any sense to flood customers with entire details about the product at awareness phase. Product Manager has to identify the right set of information to provide at each stage. Product Manager should not let customers experience information overload thereby making their choices difficult and eventually pushing them away from the product. Primary purpose is to help customers make right buying decisions by providing only appropriate and relevant information, so only RIGHT customers (i.e. actual target buyers) buy the product. I always opine that successful sale to a non-target customer will always be detrimental. Especially with B2B products, pruning of information and sharing appropriate information at each stage of the buying process is crucial for a successful sale. Most B2B products contain plethora of features and they do bunch of things to address various customer pain points. However, while interfacing with customers, it is sufficient to talk about the finite future set that would address exact customer needs or pain points. To do so, Product Manager has to be aware about customer environment and their needs or pain points. Lack of such information will only push Product Manager to flood customers with product capabilities. Product Manager is letting customers experience information overload leading to a very bad experience. Product capabilities sound alien Product Manager should not let customers experience information overload thereby making their choices difficult and eventually pushing them away from the product
  20. 20. Page | 19 www.ProductGuy.in Comprehending CUSTOMER BUYING Process to customers. Customers only express interest in solutions delivered by the product and curious to know how those solutions can address their pain points. What customers expect at each stage of the buying process is how the product can address their pain points. Identifying customer pain points and elaborating how the product can address those pain points in more optimal manner much better than competition and as desirable by customers will essentially simplify the buying process. I have elaborated below on the kind of information expected by customers at each stage of the buying process. Awareness Awareness is all about creating a lasting impression in the minds of customers about the product or brand synonymous with its core functionality. BMW2 with luxury cars, DropBox3 with collaboration, Freshdesk4 with customer support, Intuit5 with financial or accounting SW. When the need arises for a customer (both B2B and B2C), brands or products that are synonymous with the functionality capable of addressing their need should immediately strike them or when customers’ google for products addressing their needs, search results should display relevant products. The focus of creating awareness lays entirely with Product Marketing Manager. Awareness is not about throwing many details about the product, it is just about communicating what the product does. I have few examples 2 BMW - http://www.bmw.com/com/en/ 3 Dropbox - https://www.dropbox.com/ 4 Freshdesk - https://freshdesk.com/ 5 Intuit - https://www.intuit.com/ Product capabilities sound alien to customers. Customers only express interest in solutions delivered by the product and curious to know how those solutions can address their pain points
  21. 21. Page | 20 www.ProductGuy.in Comprehending CUSTOMER BUYING Process What information do Intuit, Vedantu.com and Freshdesk provide in those advertisements?  Intuit is an online software to manage sales accounts, invoices  Vedantu is a portal offering personalized tuitions (1-to-1).  Freshdesk is customer support software. The advertisements communicate what those products stood for in addition to communicating what their primary service offering. There are no much details, intention is to provide information on what the product does without dwelling too much into the details while creating awareness about their respective products through ads. The primary intention of communicating product value during awareness phase is to make customers believe in the product, believe in what it delivers. Existence of such belief will push the customers further deep into the buying process. The primary intention of communicating product value is to make customers believe in the product, believe in what it delivers
  22. 22. Page | 21 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Information The engagement points in the information phase should preferably engage in a dialogue with customers to understand their needs and grasp what problems they are intending to solve. Accordingly, should customize details fed to customers to indicate how the product can address their needs or pain points, what its competitive advantage is and how uniquely the product can address customer pain points, what is the price of product offering. In case of online tuition (Vedantu.com), customers will be able to identify for which grade tuitions are available and for what subjects, who are instructors. What is the mode of delivering tuitions?, is it a recorded medium or done live?, do Vendatu.com conduct tuitions for competitive exams as well?, if yes, for what exams? etc. Evaluation Demos substantiating that the product can address customer pain points can be an ideal opportunity to let customers evaluate and experience the product. Product Manager has to demonstrate the capabilities required by customers, demos for the heck of it helps none. More often Product Managers are obsessed with demonstrating features that that they deem more important to customers. Some of the features might be innovative (out of box), unless they would influence the buying decision of customers, it is not advisable to explicitly talk about them. Evaluation is all about creating an atmosphere for customers to evaluate the product in alignment with their requirements. If it is a sports car, what is the point in allowing customers to test drive the car within city limits with speed restrictions where customers could not really experience the complete functionality of the car? So test drive should really happen on highways/freeways to experience the power of the car firsthand by prospective customers
  23. 23. Page | 22 www.ProductGuy.in Comprehending CUSTOMER BUYING Process On similar lines, in case of SUV with strong off-roading capabilities, there should be a facility for customers to experience the off-roading capabilities before buying the car. Otherwise, I do not see how customers can make right buying decisions unless the brand has a strong reputation for building SUVs with strong off- roading capabilities. Product Manager can also create an atmosphere to facilitate customers to experience their offerings. Apple stores do not merely exist for selling all their products. They exist primarily to allow their prospective customers to discover, learn and experience various Apple products. Companies such as Bose that offers home theatre solutions create an exclusive environment to allow customers to experience their offering thereby creating a WOW experience among their target customers. Testimonials of customers already using the product for similar purposes, market share to emphasize the acceptance of the product among customers are reliable alternatives to allow prospective customers to evaluate the product. Product roadmap highlighting plans of the product is also critical for evaluating the future of B2B products. Some customers would be interested to know how the product would evolve in future to address their evolving business needs. Customer can always resort to one or more of the earlier suggested methodologies to evaluate the product. Trial Trial is an extension of evaluation phase especially in B2B space. Evaluation does not always involve actual validation of the product. Even if evaluation phase involves actual validation of the product, the process happens in a controlled environment. On the contrary, customer conducts trial in a real environment and it is an opportunity for
  24. 24. Page | 23 www.ProductGuy.in Comprehending CUSTOMER BUYING Process customer to test how the product can fit in their environment and address their requirements. Product Manager has to exert control on the trial by identifying stakeholders on either side to work together throughout the duration of the trial. In addition, the trial should be planned well determining what customer might evaluate and pro-actively verifying whether there is any possibility for the product to misbehave. Such pro-activeness is required to avoid any negative impact during the trial. Adoption Customers go past this stage if they are convinced that product is worth the price. Communicating and justifying ROI is critical especially for a B2B product. Communicate ROI to customers to indicate the value delivered by the product could offset the initial cost. If the product costs $100,000 and it is the responsibility of Product Manager to communicate the tangible and intangible benefits of investing $100,000 to customer business. Product Manager has to clearly articulate the benefits in terms of operational efficiency (savings in $) or ability to generate more revenue, or enhance customer delight etc. Depending on the situation, Product Manager should create options for additional discounts, migration plans or flexible pricing providing an attractive proposition to customers. Loyalty In this phase, customers do not seek information but they seek experiences. Level of experiences delivered will determine the loyalty of customers. Track how customers are using the product (mostly B2B) and measure their satisfaction level. Keep a tab on the support cases, feature requests raised by customers. Possible interlock with customers to spot and trigger opportunities for CROSS SELL and UP SELL. Loyalty is not merely to create cross sell or up sell opportunities alone, but to have those loyal customers act as product ambassadors and speak positively about the product. I am surprised at how certain companies periodically call their respective customers to remind them about pending service or license upgrades or renewals. The engagements points in loyalty phase should imbibe such behaviors resulting in utmost customer satisfaction and delight. Loyalty is not merely to create cross sell or up sell opportunities alone, but to have those loyal customers act as product ambassadors and speak positively about the product
  25. 25. Page | 24 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Apart from identifying the kind of information required by customers during each stage of the buying process, Product Manager should have penchant to know more details on how and where customers would like to consume the information. If we are providing all the information required by customers but not in the form expected by them and not in the location of their choice, then it is a colossal failure. Act of persuasion The information provided by various engagement points during each stage of the buying process should GUIDE customers to make informed buying decisions. Firstly, engagement points in the information phase should understand customer needs through a dialogue. Next step is to help customers identify the best product suited for addressing their needs and later the focus should shift towards communicating ‘WHY it is the BEST Product for Customers’. Engagements points should engage in an ‘act of persuasion’ in making the target customers believe that the product is right for their use and evoke right kind of emotions that can successfully lead customers through adoption phase. It is important to enforce ‘Act of persuasion’ selectively only upon the actual target customers. As I stated initially buying process is filled with actual and frivolous buyers, so there is a need for filtering process to let go off frivolous buyers while persuading only the actual target customers. Information needs for buying stages of a car  Awareness: Awareness about the type of car (hatchback, sedan, SUV, MUV), approximate price range, engine options (Diesel/Petrol). Awareness is also about simultaneously emphasizing the brand value to make an emotional connect.  Information: Information about color options, mileage, various models and features available in each model, price of each model. Dealer and service center location details. What is the ownership costs and service interval? Product finder – to help customers identify the right model. Sometimes customers face trouble even choosing between diesel and petrol variant. Awareness Information Evaluation Adoption
  26. 26. Page | 25 www.ProductGuy.in Comprehending CUSTOMER BUYING Process  Evaluation: How the car performs – Reviews by independent experts or customer testimonials in forums or showrooms offering the facility to test-drive the vehicle. Acceptability among wide range of customers - Decision of some section of customers are driven by herd mentality, so popularity of the car might play a critical role in influencing the buying decisions of customers with herd mentality.  Adoption: Available pricing options (Exchange options, Discounts, Freebies, Attractive finance options through various banks) etc.  Loyalty: Minimal expectations from customers in terms of reminding them about impending service schedule, communicating the approximate cost upfront. Listening to customer defined engagement points (mostly social network) to hear about customers’ feedback and act appropriately. Engagement points for each stage of the buying process Immediately after identification of all possible engagement points for each stage of the buying process, Product Manager can decide on the right level of information provided by various engagement points at each stage of the buying process. Does it sound simple? Guess not. I have earlier pointed out that engagement points need not necessarily be unique across various stages of the buying process. Customers might use same engagement points across multiple stages of the buying process. In such scenarios, the engagement point (be it offline or online) should have the intelligence or ability to identify where a particular customer is positioned in the buying process. Accordingly decide the type of information fed to those customers. Marketing is all about providing consistent messaging about the product but it has to be sliced and diced for each stage of the buying process. The car show room (an offline engagement point in the buying process of a car) can proactively engage with customers to identify where exactly in the buying process do they exist and accordingly feed with appropriate information. Product Manager should device such similar approach for online engagement points as well. Online engagement point should have the intelligence to identify the positioning of each customer in the buying stages and should have history of their buying process. Accordingly, engagement points can automatically personalize contents in relation to customers buying history and their position in the buying stages.
  27. 27. Page | 26 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Validated Learning Product Manager has to understand the expectations of customers and feed engagement points with sufficient details to meet those expectations. Demystifying the buying process and identifying the cause for customer churn can help understand the gaps in the information provided by various engagement points. The learning is used to reinforce engagement points to bridge the gaps. Doing so PM would have identified the silver bullet to accomplish the following four critical pillars of product development 1) Creating value – Evolve better product 2) Communicating value – Promotion strategy that facilitates wider awareness about the product, communicates the exact value proposition and establishes an emotion connect with prospective customers. 3) Delivering value – Selling at locations that are within arm’s reach of customers 4) Capturing value – Pricing the product in proportionate with value perceived by customers
  28. 28. Page | 27 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Identify causes for churn For effective validated learning, Product Manager should have mechanisms to identify the reasons for customer churn and use those findings to reinforce engagement points with relevant information. Identifying how many customers are traversing through each stage of the buying process can help in determining customer churn rate at each stage and identifying the engagement point that has caused the churn can provide more reasons on why customers have quit the buying process. Nevertheless, what makes the task of tracking customer movement across the buying stages difficult is that most of the engagement points are independent and are non-related. Another factor that contributes to the complexity is that customers seldom use the same engagement points during the entire journey of their buying process and they could probably use combination of both offline and online engagement points. Yet, Product Managers can hardly keep quit at such implausibility. There is absolutely no point in fretting about the lack of perfect solution. Product Manager has to imbibe a combination of quantitative and qualitative analysis to identify the total number of customers at each stage of the buying process and to identify the cause of churn at each stage of the buying process. There is also a possibility that customers can engage with multiple engagement points in each stage of the buying process and we need to eliminate those discrepancies while accounting for number of customers in each stage. For sake of consistency, let me revisit the example of buying a car and start with quantitative analysis. Product Manager has a sales target as a % of the total addressable market (TAM). For sake of convenience, let me assume that TAM is 1000 and sales target is 2% of TAM for each month. According to our buying process, we start with 1000 in awareness phase and end up with 20 in adoption phase. Instead of treating the buying process of customers as a black box, I am insisting on trying to demystify the buying process to understand where the problem lays and what would be the possible cause of not meeting the sales target. In spite of meeting the sales target, demystifying the buying process can still help us understand what is causing customers to adopt the product. Demystifying the sale process is all about understanding what % of the TAM is expected in each stage of the buying process. If 20% of the overall TAM has to adopt the product, then Product Manager has to work backwards to figure out the % of overall TAM expected in each stage of the buying process.
  29. 29. Page | 28 www.ProductGuy.in Comprehending CUSTOMER BUYING Process In my fictitious example, I assume 80% of TAM will express interest to know more about the product, 25% of customers from interest phase will evaluate the product and 20% of customers who has evaluated the product will finally buy it. Please note that in each phase if there are multiple engagement points then there is a possibility for a single customer to use multiple engagement points, so getting absolute count of customers in each phase is not straight forward and Product Managers has to grapple with those challenges. Awareness is the 1st step of the lead generation raising sufficient curiosity among customers to know about the product and thereby triggering the journey of buying process. Various engagement points in the awareness phase should ensure that together they are capable of reaching the entire TAM. Every stage thereafter should provide compelling reasons for customers to traverse to the subsequent stages culminating in a sale. While demystifying the buying process, if a Product Manager identifies that a specific stage in the buying process does not attract sufficient population, (s)he has to identify what specific engagement point in the previous stage would be causing the churn. As per my example, if entire car sales does not exceed 20 units per month then there is a trouble. Earlier suggested framework provides a structured way to understand where exactly the problem lies. Suppose if only 300 customers are getting to know about the car through various engagement points in ‘Interest’ phase, then I could think of one of the following possibilities 1. Lack of awareness about car among target customers. The chosen engagement points (such ads, car shows etc.) might not be sufficient to create awareness. 2. The engagement points are sufficient but the message communicated through the engagement points did not resonate with customers to create a curiosity factor. Awareness (1000) Interest (800) Evaluation (100) Adoption (20) Loyalty (20)
  30. 30. Page | 29 www.ProductGuy.in Comprehending CUSTOMER BUYING Process In this situation, Product Manager might have to rely on qualitative analysis to identify what engagement points can create a better awareness about the product and figure out why existing engagement points were not able to create the required awareness among customers. Suppose if the Organization is successful in creating awareness among target customers and yet there is no sizable number of target customers reaching information phase, then the trouble might be with the messaging. The product messaging might not be communicating the exact value of the product or rather the message would be correct but the interpretation could have gone wrong. Customers might perceive the product in a manner contrary to the expectations of the Product Manager. Success of the product is dependent upon the perception. All of us would have heard about the phrase ‘Start with WHY?’ and it is applicable universally to every activity. Comprehending customer buying process is no different. Product Manager has to focus on WHY (s)he is not encountering expected results at each stage of the buying process. In fact, I am becoming a firm believer in 5 Ws theory. Why would help us to understand the reason at the surface, however if we need to understand the exact cause beneath those failures then start focusing on 5 Ws. Repeatedly ask WHY? WHY? WHY? WHY? WHY? To unearth the actual cause, sometimes the findings might surprise Product Manager.
  31. 31. Page | 30 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Importance of perception Why is perception important? How customers perceive the product determines their behavior and their behavior determines the outcome. The facts do not determine the success of the product as much as the perception does. Product Manager therefore has to focus on creating a perception among the minds of existing and prospective customers that reflects positively on the success of the product. Tata Nano, a $2,000 car built by Tata Motors in India, was supposed to disrupt the entire market. However, it was a complete fiasco. Why? Tata Motors marketed Nano as a low priced car and customers too perceived it as cheap car. Owning a car is matter or pride, customers were never happy about being associated with a cheap car. The perception of the brand too took such a huge hit that it is still trying hard to shed its tag of ‘cheap car’ maker. The car did not fail primarily because of the actual product, but because of the perception surrounding the product. What-if customers perceived the car as a ‘Value Car’, would it have made a difference. Probably yes, but what is important to consider is that ‘PERCEPTION MATTERS’. What kind of perception does Product Manager want to create? Every Organization build products with a basic premise that they will be valuable for customers and customers will readily embrace them. So ideally, there are two elements 1. What do customers really need or want? Product Manager should focus on ‘NEED’ and not on ‘WANT’ – Problem Focus 2. How does product create value for customers? – Solution Focus While building a product, Product Manager ensures that there are lots of synergies between (1) and (2). Otherwise, there is no purpose in building the product. Fundamentally, the value rendered by the product and customer needs should overlap How customers perceive the product determines their behavior and their behavior determines the outcome. The facts do not determine the success of the product as much as the perception does
  32. 32. Page | 31 www.ProductGuy.in Comprehending CUSTOMER BUYING Process largely for better product-market fit. Nevertheless, does it suffice for product success? Product Manager should bring the product closer to customers with appropriate marketing strategy. For better success, Product Manager determines the right marketing strategy to market the product better among target customers; the focus is primarily on what kind of message to communicate to target customers. The kind of message depends on how customers should perceive the product and what they should believe about the product For product success, customers should perceive that the product addresses their needs in the most optimal manner in comparison with competition. How customer should perceive the product should eventually determine the marketing message for the product. The market strategy is about creating a perception derived from the understanding - ‘How Product Manager would like customers to talk about the product, what Product Manager would like customers to believe about the product’. Therefore, the (3) aspect of building a commercially successful product is to derive the right marketing strategy to ensure that customers’ perception of the value rendered by the product aligns with the actual value delivered by the product (i.e. the perception should match the reality). Otherwise, customers might feel that the product does not fit their purpose and as desired by them. So essentially Product Manager needs to ensure that (1), (2) and (3) overlaps for a successful sale. 1. What do customers really need? 2. What value does the product delivers? The market strategy is about creating a perception derived from the understanding - ‘How Product Manager would like customers to talk about the product, what Product Manager would like customers to believe about the product’
  33. 33. Page | 32 www.ProductGuy.in Comprehending CUSTOMER BUYING Process 3. How do you want customers to perceive the product? Let us get back to the clichéd example of buying a car. The car under discussion is a multi-purpose family vehicle catering for a larger family of six people. It is reliable and well designed with utmost driving comfort. While creating a perception, the target is always to hit the ‘SWEET SPOT’ and maximize it. Based on the customer needs or expectations from a family car, Product Manager has to identify how customers should perceive the product (more on the functional aspect) that is in alignment with reality. Creating a perception around the functional value is required but it is not sufficient, Product Manager has to create a perception of certain traits that is synonymous with the brand and the product. Perception involves both rationale and emotional. I have also indicated that unless we satisfy the rationale and emotional needs during the buying process, commercial success can evade the product. Therefore, in addition to creating a perception about the functional value of the car that is in alignment with customer needs, Product Managers has to identify ideas or emotions synonymous with the product and the brand. In case of car, brands are always synonymous with traits such as ‘Luxury’, ‘Performance’, ‘Family’, ‘Safety’ etc. Please note that the brand and the product have to represent same traits. Customer Needs (1) Actual Value Delivered by Product (2) Customer's Perception of Product Value (3) Sweet Spot
  34. 34. Page | 33 www.ProductGuy.in Comprehending CUSTOMER BUYING Process The marketing campaign or the engagement points, albeit they deliver messages with varying depth, each of them should aim at creating same perception among the minds of customer (i.e. the car is a family car which is reliable and well designed with utmost driving comfort). The information that is delivered to customer during various stages of the buying process should essentially focus on how the car is delivering on those parameters and it not worthwhile for someone to talk about the off-roading capabilities of the car or its ability to go from 0-100KMPH (KiloMeters Per Hour) in x seconds. The perception that Product Manager is attempting to create to increase the perceived value of the product should also be in alignment with brand perception. It holds well for certain products and more so in case of cars. While Product Manager is trying to create a perception that the car is reliable with utmost driving comfort, the brand perception should also be in alignment with reliability and driving comfort. If the perceived value of the brand takes a hit on the parameter of reliability and any effort on part of the Product Manager to create that perception around the product will be complete fiasco. When to create a perception? The necessity for creating a perception starts with sending the 1st message about the product and thereafter at every opportunity customer interfaces with the product during the buying cycle and pre/post the buying cycle, there is a necessity to manage the perception. It is essential to frequently measure the perception and ensure that customers perceive the product in a way we like them to do. Otherwise, customers’ notion of the product might contradict the reality. If such customers enter the buying process, the probability of successful sale will be minimalistic. In such cases, each engagement point at various stages of the buying process should also target to create perception in the minds of customers. All engagement points should work like a well-orchestrated symphony to create and manage a consistent perception. ‘How do Product Manager wants customers to perceive the product’ and ‘What memories do Product Manager wants customers to carry about the product’ determine the behavior of each engagement point.
  35. 35. Page | 34 www.ProductGuy.in Comprehending CUSTOMER BUYING Process How to create a perception? Amazon is known for putting its customer first and they succeed in creating a similar perception among customers as well. Every customer too opines that Amazon is ‘Customer friendly’. I presume everyone in Amazon believes what (s)he stand for. To ensure creating and managing an appropriate perception across all engage points consistently, it is critical for every stakeholder involved to understand what the brand and the product stands for. What the brand and the product stands for should be religiously imbibed into the thought process of every stakeholder and it should act as guidance for any decision making that could even remotely impact customers. Doing so, every engagement point can act in-harmony to manage a consistent perception. Engagement points involved in the buying process alone does not have a sole responsibility to manage perception. Every organization needs to have additional mechanisms to deal with perception threatening events that might shake the foundation of what the product stands for. Product failures and recall of cars plying on the roads might have a serious impact on how customers perceive the product. In such cases, even though engagement points are tuned to influence the perception, there should be other dedicated ways to restore the perception. Similarly, there should also All engagement points should work like a well- orchestrated symphony to create and manage a consistent perception. ‘How do Product Managers want customers to perceive the product’ and ‘What memories do Product Managers want customers to carry about the product’ determine the behavior of each engagement point What the brand and the product stands for should be religiously imbibed into the thought process of every stakeholder and it should act as guidance for any decision making that could even remotely impact customers.
  36. 36. Page | 35 www.ProductGuy.in Comprehending CUSTOMER BUYING Process be focus on perception enhancing events through ratings by recognized agencies, product endorsements by persons with lot of authority in the related space etc.
  37. 37. Page | 36 www.ProductGuy.in Comprehending CUSTOMER BUYING Process How long buying process does lasts There is no one single answer to this question and it really depends on the product. However, intention of this section is not to identify the time duration taken for the buying process to complete, but to identify the tasks during buying process that are ideal for optimization to shorten buying cycle. Who does not want to see money quickly, long buying cycles are exhausting and exasperating. I have summarized 10 tips to shorten the buying cycles. Earlier sections have explained some of them in bits and pieces. I am explicitly summarizing all of them to highlight how focusing on them can help reduce buying cycles. Most of the tips offered below might be exclusively applicable for B2B products. 1. Simplify buying process 2. Talk about solutions, not the product 3. Know the decision maker 4. Be available at the right time at the right place 5. How are you different from others? 6. Well planned trail – To articulate the product value 7. Communicate RoI 8. Innovative or Flexible pricing 9. Inventory management – Eliminate the lead time 10. Lastly, be honest Simplify buying process – Guided selling In case of B2B and B2C products, major contributing factor to delay is inability to pick a right product due to plethora of products that are almost similar. Simplifying the buying process by making customers choices easier and facilitating customers to make the right buying decision is the ideal step for guided selling. Under the pretext of providing more choices to customers, Product Manager builds more products that are redundant. We see this trend in most of the B2C electronic products such as TVs, Mobiles etc. Further adding to the agony is tons of information about each of those products, virtually making it difficult for customer to choose an appropriate product. Trying to identify which of those products are perfect for the needs of a customer would be tantamount to searching for a needle in a haystack. Information overload could push customers away from the product.
  38. 38. Page | 37 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Engaging in a dialogue with customers to precisely understand their needs and narrow their choice of products to a handful, can simplify buying process. Such engagement should possibly start during information phase of the buying process. Let me provide an illustration to simplify buying process. Above is the product finder for Canon compact cameras. It is not too great, but at least it is better than nothing is. The product finder lists certain product functionalities and help to filter the available products. In a way, it makes search easier. Instead of looking at the feature set of each product, prospective customers can just use the product finder to narrow the search down to handful of cameras. Nevertheless, for a camera, the amount of memory and available auto options are also important. I would probably wish to list them in product finder for further simplification of the buying process. My worst nightmare is while picking a DSLR. Nowadays there are more novice photo enthusiasts and it is surprising to notice that none of the DLSR manufacturers have buying guide in their respective sites to guide the beginners. I do not want to be critique here rather the objective is to highlight the need to ease the buying process. If it is not easy to choose a product, customers just pick the easy route. They look out for referrers and it might probably work for well-established brands with a loyal customer base. Worst case, customers can be misled too. Somewhere down the line, the company is being a cause to push customers away.
  39. 39. Page | 38 www.ProductGuy.in Comprehending CUSTOMER BUYING Process To build an effective product finder page, identify the critical attributes that customers use to evaluate the product. In case of camera, the possible attributes could be (i) stylish, (ii) zoom length, (iii) price, (iv) auto, manual and (v) memory. Pick such attributes and determine the values under each of those attributes for customers to choose. Depending on the choices made by a customer, provide a list of matching products with an option to compare them. Ideally, it is a 1st step to the guided selling. Talk about solutions, not the product When the Product Manager is solution focused, (s)he is willing to take a giant leap to understand customer environment, their needs and their pain points to position the product precisely at the intersection of problem and solution. Being solution focused, Product Manager does not restrict himself/herself to merely selling the product by highlighting its capabilities but will take a step further to elaborate how the product can fit into customer environment seamlessly integrating with other products to address their needs and pain points. Providing such clarity can help customers to shorten the time taken to understand how product perfectly fits into their environment to address their needs thereby making their buying process simpler and quicker. Solution focus is more important in case of B2B product.
  40. 40. Page | 39 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Know the decision maker It is a classic case of determining USER vs BUYER. If the USER and BUYER are two different entities, identify the respective entities early in the buying cycle. Invariably USER and BUYER both have different objectives. USER is more concerned about the usability of the product to address their business problem in comparison with how the product addresses the business problems or needs. On the contrary, BUYER is more concerned about how the product addresses the business problems or needs and at what price points. Usability of the product might not be a primary concern of the BUYER. Product Manager cannot talk to both the entities at the same length as their purposes vary. Identifying both the entities early in the buying cycle, will help Product Manager to address their concerns and convince the efficacy of the product to both of them in parallel. Doing so will eventually reduce the duration of the buying cycle. Be available at the right time at the right place When the need arises, customers start looking for products that can help them address their needs. Customer might visit a store, search online, or seek opinion of experts/friends to identify available products capable of addressing their needs. Whatever be the case, identify all possibilities of where a customer could start looking or searching for products matching their needs. Make sure you have the engagement point in each of those possibilities to connect with prospective customers, to create awareness about the product and to start engaging with the customer. How are you different from others? My take on new deals of both existing and prospective customers is to understand both explicit and implicit needs. Later present those needs holistically back to customers and highlight how best the product is addressing them. There should also be emphasis on When the Product Manager is solution focused, (s)he is willing to take a giant leap to understand customer environment, their needs and their pain points to position the product precisely at the intersection of problem and solution
  41. 41. Page | 40 www.ProductGuy.in Comprehending CUSTOMER BUYING Process emerging needs of customers and Product Manager should articulate how the product would evolve to address those needs. Such an approach will provide an impression among the minds of customers that Product Manager is holistically looking at entire needs of their business (both current and future). Nevertheless, every customer would still ask how the product is better than that of competitors. So in most cases, it is required to highlight how the product optimally addresses their needs better than the competition. Having competitive analysis handy would make the job easier. Respect competition. Never bully competitors before your customers. Customers might not always favor chest-thumping attitude. While being gracious, always highlight which attributes make you stand out in the crowd. Would such approach make any difference to customers? Here again, do not just blindly pick attributes that make the product stand out, instead pick those set of attributes that are of significance to customer. If a product does a specific functionality better than competition and if it is of no use to customer, then it hardly matters to customer how well the product performs that functionality. Use this principle even while responding to RFPs in case of a B2B product. Every product does well in certain parameters and not so well on other parameters. While responding to RFP, what matters is that whether the product is performing better on parameters that are of significance to customer’s business needs and highlight the same as part of the RFP response. Doing so would help customers convince about their choice of product without any further deliberations. Well planned trial – To articulate the product value Instead of treating trial as an overhead in the buying process, treat it as an opportunity to demonstrate the value of the product tangibly. In most cases, products from multiple vendors look similar on paper. In such cases trial go a long way in demonstrating the tangible value and product differentiators. Even though customers conduct the trial, Product Manager should at least be part of the process to know what functionalities customer plans to evaluate as part of trial, to identify whether customers’ understanding of the product is in alignment with the product’s actual behavior and capabilities. Even if customers set the agenda for trial, Product Manager has to educate customers on the list of product capabilities that would be of significance to their environment. Ideally, trial delays the buying process, but it brings transparency to the
  42. 42. Page | 41 www.ProductGuy.in Comprehending CUSTOMER BUYING Process buying process. If planned well through providing appropriate support to customers, it would be possible to complete the trial quickly scoring few brownie points with customers to close the deal successfully. Communicate the RoI Is the product worth the price? It would be last question on the minds of every customer after they have zeroed in on the product. Product Manager efforts to convince customers on how the product could address the needs of customers better than any other competition can definitely help customers chose the product. However, until customers are convinced whether product is worth the price, they would not go past the last phase of the buying process (i.e. Adoption stage). Every product (mostly B2B) needs to have a RoI tool that can outline both tangible and intangible benefits of purchasing the product. Customers should get convinced that value derived from the product outweighs the cost. Providing relevant RoI data would only accelerate the buying process. Innovative or flexible pricing Pricing in case of B2B products might not always be rigid. Depending on the strategic importance of a customer, volumes etc. different pricing options is put forth before a customer depending on how they want to structure the CAPEX and OPEX. Certain customers have budget for HIGHER CAPEX but want considerably LOWER OPEX, few other customers want to follow OPEX model with relatively LOWER CAPEX. Understand customer preferences and their budget constraints. Accordingly figure out the possibilities for any change in pricing. Since the approvals might take longer, Product Manager has to undergo this task in parallel while the product is being evaluated. Remember the topic of identifying BUYER vs USER, the discussions with BUYER should happen earlier in the buying cycle along with the USER to understand the expectations of BUYER in terms of RoI, pricing etc. and accordingly formulate the pricing strategy within the permissible scope. Inventory management – Eliminate the lead time Focus on efficient inventory management to eliminate the lead time might not be relevant if there is a conscious decision to create an impression of exclusivity of products by maintaining a constant inventory level leading to long wait times.
  43. 43. Page | 42 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Otherwise, Product Manager has to figure out how to reduce the waiting time. In case of B2C, this would be applicable for products like Cars. In case of B2B, with HW products there would always be a lead time. It would be the responsibility of Product Manager to anticipate the future sales and pro-actively maintain the inventory. If there is big ongoing deal, in accordance with the probability of deal closure, Product Manager can alert manufacturing team to maintain appropriate inventory levels. Long lead times can have negative impact on the deal and it can also further extend the duration of buying cycle. Lastly, be honest Always be honest with your customers. If the product does not fit their requirements, be honest with them to indicate that the product might not be a best fit. Selling the product to a wrong customer is always worse than not selling. Product Manager might have made revenue, but there will be definitive long term implications. Customer would later realize that the product does not fit their requirements and situation might deteriorate possibly jeopardizing all future businesses. The negative feedback from a customer might also have implications on other customers as well. Being honest helps Product Manager to build a long lasting relationship with customers that might probably facilitate more sales in future. How someone could possibly explain why B2C customers would always buy products from a specific store or brand, why B2B customers directly raise a purchase order to procure products from a specific vendor without any RFP or evaluating any competitors. The only answer that I could anticipate is the TRUST towards the BRAND and the PRODUCT.
  44. 44. Page | 43 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Necessity for tools Throughout this entire eBook, I have been evangelizing to take a holistic view of the entire buying process and connect the dots to understand what goes beneath the thought process of customers while making a buying decision. Nevertheless, the buying process is really complicated with multiple engagement points at each stage of the buying process spread across offline and online space. It would be extremely tough for Product Manager to grasp what is exactly happening without the aid of tools. Product Manager should have access to tools that could stitch all the activities across the entire buying process together. Without the existence of tools and without the ability of tools to stich the activities across the buying stages, how does Product Manager ever know whether the issues with customer support are hurting cross sell/up sell opportunities? How does Product Manager ever know which marketing campaigns had direct impact on sales? How does Product Manager ever know whether product is being evolved as per the expectations of customers? What I had observed is that the CRM tools fall into three main categories  Marketing – Awareness phase  Sales – Information phase till Adoption phase  Customer support – Loyalty phase Product Manager might or might not have a say in selection of tools, but if there are multiple tools (s)he has to figure out some ways to stitch them together to understand more on customer behaviors. Presence of tools hardly makes any difference unless the Product Manager is not curious to know -  How many customers are aware about the product?  How customers are aware about the product?  Was awareness about the product was created among all target customers?  Have marketing campaigns effectively communicated the value of the product to entire target customers?  Did the awareness phase raise enough interest among target customers to know about the product?  How many customers have expressed interest to know more about the product?  How many initial leads converted into sales? o What customers liked most about the product? o What are the top 3 reasons for customers to buy the product?
  45. 45. Page | 44 www.ProductGuy.in Comprehending CUSTOMER BUYING Process  How many leads were lost? o Why did customers not choose the product? o Are we consistently losing to any competition? o What would help product regain the lost ground?  Are customers satisfied with the product? o Was there any recurring sales from those customers o Did quality of product had any impact on up-sell/cross-sell opportunities The thought of tools triggered to me when I recently had an opportunity to demonstrate my product (B2B) in one of the leading events. The tool used in the event is awesome, it identifies –  How many customers are visiting the event?  Which booths did they visit and when  What sessions (demo, technical, keynotes etc.) did they attend?  Short survey to identify, the list of technologies or products that interest customers, what is budget spend of customers for next few quarters Product Manager can have precise details on the exact number of customers who knew about their product and who those customers are. Product Manager can further identify if there is a dip in the % of attendees knowing about their product due to inappropriate location of booth or any other factors. The tool is exhaustive to provide any details pertaining to the event and customers who attended the event. But what is missing is to understand the influence of the event (awareness phase) in pushing the customers to next phase (information phase). Other element that I missed during the event is to figure out whether customers attending the event are existing customers or not. Accordingly, I could adapt information provided about the product to both existing and prospective customers. Icing on the cake would be to link the details of customers visiting the event with support data to identify the list of issues recently faced in their network, so Product Manager could have leveraged the opportunity to set appropriate expectations, allay any fears about the capabilities of the product to address their needs. Customers also would be happy that they are being heard and their issues are taken seriously. Ideally, tools do a fantastic job in silos (marketing, sales and customer support), but they should be unified to get some fantastic insights. Can dip in customer support cases of a specific customer be correlated with sales tool to identify whether that customer has
  46. 46. Page | 45 www.ProductGuy.in Comprehending CUSTOMER BUYING Process possibly migrated to any other product or migrated to competition? Can patterns of critical support cases and sales be linked to check if there is any correlation? The biggest insight that could be obtained is to identify the exact set of reasons (both product and non-product attributes) influencing the buying decision of customer. There should be deliberate introspection to identify whether customers are buying the product for those reasons that Product Manager envisaged. If not, something is fundamentally wrong in our understanding of customers and our approach to build, sell and market the product. Those activities are not aligned in favor of customers thought process applied during the buying stages. Sometimes, the tools might not be linked for fear of data security breach. Nevertheless, nothing should stop Product Manager to at least manually stitch them. Otherwise, Product Manager could not create a feedback loop or establish causal and effect mechanisms among the four main pillars of product development - (i) creating value, (ii) communicating value, (iii) delivering value (iv) capturing value.
  47. 47. Page | 46 www.ProductGuy.in Comprehending CUSTOMER BUYING Process Concluding Thoughts Product Managers are often obsessed with building great products that they focus less on bringing products closer to customers for spectacular commercial success. Even though Product Marketing Managers take the mantle of bringing the product closer to customers, there should be coordinated efforts between Product Manager and Product Marketing Manager to figure out how to bring the product and customers closer in addition to spotting the weak links in the buying process. Real success of the product does not lay in creating the value but in capturing the value, unless Product Manager/Product Marketing Manager thinks how customers think (s)he cannot communicate and deliver the value to capture it appropriately. The world is such a complex place that we often have to simplify it to unravel certain mysteries. Comprehending the customer buying process can be better termed as one such mystery that only a few of them have been able to unravel and it rightly reflects in commercial success of their products. Through this eBook, I believe I have made an honest and humble attempt in systematically understanding what goes into the thought process of customers while making a buying decision. Nevertheless, what really helps Product Manager to comprehend buying process of customers is the curiosity to know ‘WHY?’ behind every possibility during all possible engagements with customers. Appreciate any inputs or comments based on your experience. Together we could unlock mysteries of buying process of customers for providing more insights that are more actionable. I really appreciate any feedback about the contents. Please drop your comments either at my blog (www.ProductGuy.in) or at murali.erraguntala@gmail.com. Happy Communicating and Delivering Value 

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