The buying cycle represents the journey customers take before they commit to a purchase. Discover the various stages involved, the importance of this cycle, and strategies to refine it for better user conversion.
Chances are, you’ve established some form of sales cycle that guides new customers through your product offering.
This is typically a structured approach with clear-cut phases, designed to transform prospects into leads, leads into qualified opportunities, and opportunities into paying customers.
While having this structure is absolutely essential, most SaaS businesses we’ve worked with face a similar challenge: their customers rarely stick to that prescribed path.
Your customers aren’t thinking about what boxes they need to check to qualify as a sales-ready lead. They’re navigating their own landscape of pain points, constraints, and purchasing authority. They’re following their unique buying journey, the yin to your sales process’s yang. The peanut butter to their jelly. You know what we mean.
Gaining insight into your customers’ actual purchasing behavior and synchronizing your marketing strategies, pricing structure, and sales methodology with their natural buying patterns will help you improve conversions, strengthen retention, and reduce sales costs.
Not aligning these processes represents one of the most frequent pitfalls we observe across SaaS organizations.
Here’s how to refine your sales approach to complement your customers’ buying cycle, beginning with a clear explanation of what the buying cycle entails.
What is a buying cycle?
The buying cycle (also known as a purchase cycle) is the journey a customer takes when acquiring a product or service. Customers progress through multiple phases in this cycle as they recognize their problem, research potential solutions, and advance toward a final buying decision. Following that decision comes the question of whether they’ll purchase again.
The five buying-cycle stages
Though the specific buying cycle varies somewhat across different products and services, every customer experiences some version of
- recognizing they face a problem;
- evaluating their available options;
- reaching a decision; and
- acquiring a solution (or renewing, for subscription-based products).
Different strategies are needed at each phase to encourage customers to advance to the following stage, as they anticipate different types of engagement with you based on where they are in the journey. Your objective at each phase isn’t necessarily closing the sale. Rather, your attention should center on simply guiding each customer forward to the subsequent stage.
And while we might wish we could dictate which phase customers occupy at any given moment, they’re actually the ones steering the ship. Our role is simply to synchronize our strategies and sales methodology with wherever each customer happens to be in their purchasing journey.
Here’s a closer examination of each phase in the cycle.
Revenue models: 11 types and how to pick the right one
1. Awareness
Awareness marks the initial phase of the buying journey. Prospective customers recognize they face a challenge requiring resolution and start exploring potential solutions. This is also the phase where businesses typically concentrate the bulk of their marketing resources, as the opportunity for attracting new customers is constrained only by total market size.
The moment prospective customers learn about your product or service and its potential to address their challenge, they transition to the following phase in the journey: consideration.
2. Consideration
The consideration phase is where your sales efforts can begin creating real impact. Your customer is actively seeking solutions, and your product is (with any luck) among the contenders. Your responsibility during this phase is to supply comprehensive information demonstrating how your product or service addresses their challenge more effectively than alternatives and what advantages they’ll gain after resolving their problem.
After customers become persuaded they must acquire a solution for their challenges (whether that solution is your product or a competitor’s), they move forward to the following phase: intent.
3. Intent
During this phase, decision-makers compare the different alternatives head to head. Whichever one makes the strongest logical, emotional, or financial case will be their ultimate choice. Your sales team’s responsibility at this point is to demonstrate that, among the potential solutions under consideration, yours is the product or service they ought to select.
In time, each customer will be prepared to complete the purchase and then advance to the fourth phase: purchasing.
4. Purchase
The customer has selected the product they intend to acquire, and they complete the transaction. Hopefully, it’s yours. If it isn’t, there’s room for improvement!
Your work doesn’t conclude at this phase, though. It’s essential to cultivate a lasting relationship with customers and to assist them throughout their problem-solving experience. Maintaining regular contact can also generate opportunities to encourage customers to buy again or continue their subscription. This is the catalyst for the following phase.
5. Repurchase/Continuous Purchase
This phase can vary in appearance, depending on your offering.
If your product is perishable, like food, or consumable, like diapers, your customer will likely return before long for another order. Similarly, if you operate a subscription business, your continuous purchase moment will arrive when a customer’s billing period ends and they’re billed again. This phase can (and optimally will) cycle indefinitely, which is why businesses often discover the greatest opportunities for revenue growth here.
Why buying cycles matter
Even the highest-performing businesses convert only a small fraction of their potential customer base. Everyone else remains somewhere else along the buying cycle. Perhaps eventually they’ll reach the purchasing phase, or perhaps they won’t.
Without a thorough grasp of how your target customers think when acquiring a product, you’ll waste energy on sales and marketing activities, and you’ll never win that customer. Conversely, viewing your products from your customers’ vantage point and grasping what propels customers through each phase of the buying cycle is what leads to a successful business.
Here’s why purchase cycles should be important to your organization.
Optimize your marketing efforts
Examine your marketing activities through your customers’ perspective to identify which elements are performing well and where your energy will generate the greatest results.
Perhaps you’re attracting plenty of qualified visitors, but those leads aren’t converting to purchases, suggesting a challenge in the consideration or intent phase. Or maybe you find that you’re converting almost every lead that comes your way, but you need to generate more leads. In that case, you should dedicate more resources to creating awareness.
Regardless, it’s valuable to identify where your marketing investments will produce the strongest impact.
Convert more customers
When they’re still working to grasp the challenge they’re facing, customers don’t appreciate aggressive sales tactics. Similarly, they don’t require elementary education about a solution after they’re prepared to complete a purchase.
Recognizing what customers require at each phase and then aligning your sales strategy to that phase directly enhances your conversion rate. It also prevents you from frustrating customers who might not be purchase-ready.
Capture a higher market share
In addition to boosting conversions with new customers, refining your purchase cycle can maintain existing customers selecting your product or service instead of your competitors’. This allows you to secure a larger portion of those customers over the long term.
Dedicating resources to retention analysis delivers significant returns. In fact, increasing retention by just 5% can grow profits by 25% to 95%. While concentrating more on the later phases of the buying cycle might result in delayed outcomes, the boost in renewals and customer lifetime value is well worth the effort and the patience.
We’ve covered the benefits. Now let’s discuss implementation.
How to build a B2B marketing strategy that works
Optimizing for every stage of the buying cycle
If you dedicate all of your energy to just one segment of the customer purchasing cycle (finalizing the sale, for instance, or informing customers about their challenges), you’ll miss all the potential customers who remain at the opposite end of the cycle.
You can’t bypass the buying process. Instead, refine your sales and marketing activities for every phase of the purchasing cycle.
Here’s what you should focus on at each phase to advance customers along their buyer journey.
Awareness: marketing moves
Your marketing team needs to prioritize this from the very beginning. It’s vitally important that:
- your customers are aware that your product is available; and
- your product will address nearly all of the challenge they’re experiencing.
Creating awareness around your product demands a solid grasp of the particular difficulties your potential customers are facing and how your product or service alleviates those difficulties. Begin by developing focused content that helps them start resolving those challenges. Next, distribute your content in places they’ll encounter it, such as on social media. Put it anywhere your future customers are already active.
After potential customers interact with your content and (ideally) subscribe to your newsletter, you can leverage marketing automation tools to develop them until they’re prepared to advance to the consideration phase.
Consideration: tiers and options
Customers at this phase are looking for the optimal solutions to satisfy their requirements, and there’s a strong possibility you’re not their sole option. Your primary approach should again be content. Articles, case studies, and videos all inform customers about your solution and emphasize reasons to select your product over your competitors’.
There’s another tactic your competitors might be missing, though, and that’s providing multiple pricing tiers and product variations. Customize each tier to particular customer personas or budget ranges. This way, every customer can locate a tier that aligns with their requirements as precisely as possible. It also sets your product apart from those of competitors who offer just a single choice.
Your potential customer grasps what they require, understands how your product will address their challenge, and is prepared to acquire a solution. Let’s examine some approaches to help seal the deal.
SaaS business model: Stages, pros & cons + essential tools to get ahead
Intent: product descriptions, reviews, and branding
Customers who arrive at the intent phase are prepared to acquire a solution. Your responsibility now is to convince them to acquire your solution.
Success at this point relies more on building trust with potential customers than informing them. Allow your product to demonstrate its value. Customer reviews, case studies, and benefits lists can help influence customers to provide you, instead of someone else, their credit card number. Ensure you’ve emphasized what your product can accomplish that’s superior to the rest, why your other customers are completely satisfied with it, and why your brand represents quality.
On the landing page, we explain how customers can integrate our analytics software with their existing system, and the benefits they’ll experience by doing so. We also include social proof, like testimonials and logos from existing customers, to boost trust even further. Finally, the page has a clear CTA to sign up for a free trial, making it easy for potential customers to move to the next step: purchasing.
Purchase: optimize pricing
Your customer is prepared to commit to your solution. The last obstacle you want is for them to reconsider at the final moment.
Ensure your pricing is correct. Discovering at this advanced phase that your pricing exceeds (or, in certain cases, significantly undercuts) what they’re anticipating to pay is often the final obstacle preventing the sale.
For SaaS companies, the only viable option is to base pricing on value. By determining how much customers are willing to pay for your product before they reach a purchasing decision, you’ll increase not only your conversion rate but your profitability as well. Always opt for value based-pricing to maximize your revenue.
The journey doesn’t conclude with the purchasing decision, though. You can also enhance your retention or repurchase rate with a few additional approaches.
Repurchase and renewal: customer care over everything
Whether you’re offering subscriptions or one-time purchases, expanding your lifetime revenue relies far more on keeping existing customers and boosting your repurchase rate than on the volume of customers who complete the initial purchase.
Customer churn can devastate your business when ignored, but redirecting your attention away from marketing in the final phase toward customer care and product advocacy can help maintain renewal rates at healthy levels. Ensure customers are satisfied, and that they’re continuing to be satisfied, by checking in consistently. As your satisfied customers gain more familiarity with your product, request testimonials or case studies from them, or ask them to recommend you to other potential customers.