Your database or customer relationship management system (CRM) may hold valuable information about your customers that will help you understand their needs - and how they make their purchasing decisions. Mac Mackay of Duncan Alexander & Wilmshurst explains
When trying to understand customers it is worth recognising that there is a process involved when people buy. At the beginning, potential customers may not know anything about your organisation, but in the end they take action to buy your products or services. Understanding this process can help ensure that you succeed in 'selling' to a customer.
The buying process
The basic buying process is as follows:
- Unaware - I don't know what you do...
- Aware - I know what you do, but so what?
- Interest - Yes, that's OK, but I am not sure you're the one...
- Conviction - You sound plausible, but do I really need it?
- Desire - YES! I want it, but how do I get it?
- Action - I know how to get it easily, thanks!
Good CRM systems can track parallels between potential customers and those actually buying. By so doing, it's possible to understand where particular potential customers are in the process, and take them from one stage to the next until they buy from you.
Understanding the decision-making unit
In many situations, it's not just one person that makes the decision to buy your products or services. In many markets, more than one person is involved in the buying decision. Children influence their parents, for example, and in business-to-business markets, the bigger the value of the purchase, the more people are involved in the decision. We call this the decision-making unit, or DMU. DMUs may be individuals or groups.
There are six possible roles in a DMU. It's worth noting that some people or groups may have more than one functional role in the buying decision:
- Users - these people will use the product or service and may be closely involved in after-sales service, yet not necessarily involved in deciding which supplier to use or placing the order.
- Influencers - these people have an effect on the decision-making process, yet may never actually use the product or service - they may even be outside your organisation. They may be technical advisors, journalists, or perhaps budget holders who influence how much is spent.
- Deciders - take the opinions and ideas from the rest of the DMU to reach the final decision. In larger organisations the decision may fall to IT departments, for example, who make recommendations to others in the DMU. It may be a single individual or a team.
- Approvers - often the budget holders or management team, they 'sign off' the decision to buy.
- Buyers - are involved in placing the order and dealing with the suppliers to ensure that the new product or service meets specification, is delivered on time, and installed to schedule.
- Gatekeepers - control access to the rest of the DMU, for example personal assistants who control whether suppliers get to speak to or meet any of the individuals above.
Good CRM systems include information on the DMU, and where each individual or group is in the buying process.
Remember, CRM systems are more sophisticated than simple mailing lists. Because they hold information about customer behaviour and preferences, they can improve customer satisfaction and retention. They can help you to identify customer needs more effectively, allowing you to up-sell and cross-sell, increasing profitability.
Written by Mac Mackay.
