This continues the series, 9 characteristics of great customer experiences and the post series, The Customer Feels Secure and Confident During the Journey - Part 1.
Part 2 covered the pre-purchase step. This piece covers aspects of the purchasing decision itself.
Purchase Decision: Customer is Deciding if he should buy / Company addresses the details of the sale
When a customer decides to buy he wants to:
Understand what he’s getting into
- Understand how the product solves his needs
- Understand the pros/cons of your solution vs other solutions and how they compare
- Understand the pros/cons of getting a solution for his problem in general
Understand the personal risk - time and money - he’s assuming with the change
At this point, a customer probably knows the problem that he wants to solve. He knows that this solution - or something like it - will definitely help him. He is fairly certain that he is ready to move forward, but he needs to learn the details to make the right decision for him. That’s why he is talking to your company (and that’s the difference between the previous step and this one - at this point, the customer is actively talking to you).
Keep in mind any decision to buy something is a life changing decision - no matter how larger or small. That’s why this is such an important step for the customer!
With decisions comes risk. A customer will determine how much risk he is willing to assume to make that life change. He’ll consider:
- If it is worth making the change?
- Will the time and money the product saves be greater than the money spent on the item/tool?
- Should the person just not make the change and keep status quo?
We buy tools. Often objects, as well as software, are a type of tool.
There are two types of objects to purchase: passive and active tools. Passive tools are objects that humans don’t need to interact with directly for them to serve their purpose. Furniture is a passive tool. A bed serves a purpose. A couch serves a purpose. A frame serves a purpose - it requires setup but after that, it serves its purpose without too much interaction from a human.
Active tools require human interaction so they perform their function. A computer is an active tool. A food processor is an active tool. A stove and appliances are an active tool. Skin care is an active tool (it's not very useful being in a jar!).
Software is also an active tool - you need to interact with it to perform its function. Software doesn’t just work. You need to tell it what to do.
However, the "cloud” - Dropbox, Box.net - is a passive tool. You can store files there and you don't need to interact with it for it to perform its function.
This distinction helps clarify how to best communicate with customers, as indicated later in the piece. The nuance between passive and active tools requires a slightly different approach, especially at this and the next stage of the lifecycle.
What are companies doing at this phase?
The goal of this step of the process:
- Make sure the customer understands what he's getting into when he purchases the product
- Provide the customer the product details he needs to make the purchase and measure the risk
The activities:
- Provide all the details about the sale - what will the buyer get, what to expect from the product, what happens post-purchase, warranty information, what happens if it breaks
- Help the buyer understand what he is getting into when he commits to reduce surprises
How do you help your customers feel comfortable here?
It’s all about knowing what they are committing to regarding the life change and risk.
How does the customer understand what he's getting into?
Customers need a clear understanding of a product - the good, the bad, the ugly - before they buy. At this stage, the person should be having an active conversation with sales. They need to understand the product’s strengths and weaknesses and answers to questions like:
- What the product does and how it works?
- Is there a physical product? With software products and cloud - you don’t own anything tangible. You rent space. What exactly is being sold?
- Which aspects of the product will save someone money in their daily life? How can savings be calculated? What is the cost of the product over time? (obviously less per year is better)
- How long will the product last (approximately) before replacement?
- What is covered in the cost? What is not covered? Support - is that extra or included?
- Is there volume pricing for smaller objects? Or if there are multiple products being purchased?
- What are the financing options? Minimally, will the product last through financing and payments?
- How would the purchase contract work?
- If it requires refillables and replacement parts - how often are these parts necessary? What’s the maintenance cost of it?
- What could break and how to fix it, as well as maintenance costs
- What is the warranty? What happens if it doesn’t work? What if it doesn’t work as expected?
And I’m sure there are more questions that I haven’t listed. This is why checklists exist that include what to consider for different products before committing and buying. This is also why procurement departments exist for corporate purchases. The art of buying can be complicated for organizations. It can be complicated for individuals as well, but they need to rely on their own research to make a decision. This is where you can provide a lot of insights to help others buy your tools.
Sometimes people think that sales means making a product look desirable, and to do that, you avoid mentioning its flaws, problems and drawbacks. But this is how a customer loses trust. If your product has problems and those problem embarrass your sales and marketing people to the point that they won’t share or discuss them and will mask them, the simplest way to address this is to fix the problems! The product should work as expected. You shouldn’t need to lie about it to sell it.
A customer wants to know the good and bad of a product/tool. If he knows both aspects, then he can make a more informed decision.
I think sometimes we forget that this part of the process is about information gathering - from product specs to finances and logistics. It’s about the commitment someone is making with the product and how his life will change and him knowing how that will happen. If something happens to his life by using the product that he’s not aware of, if there are any gaps in his understanding of what he is getting into, that situation will spark doubt into your relationship and break trust.
Once trust is broken, the customer will exit the process - even if he owns the product. And exiting doesn’t mean that he only stops using the product. He may tell everyone his story - and that story may stop others from purchasing.
For the customer to continue the process he needs to understand the risk he is assuming buying this tool/product and life change he should be expecting to experience.
Determining risk - or the logistics of time and money
There are some details that need to be considered at this stage - like cost and money. And this isn't simply the cost of the product. There are hidden costs with most purchases - maintance, refillables, and support to name a few. The larger the risk to the buyer, the more he considers the cost of ownership, meaning maintenance and post-purchase costs.
Common questions a customer may consider and need answers for: How much time does it take to setup the product? To get it working? To experience benefits?
For a less expensive product, the risk doesn’t need to be so clearly laid out. Maybe the gain is more soft, meaning a simpler way to do something. For a more expensive product, the cost (risk) is greater. And this means that there is more to consider when determining true costs.
We also need to remember that expensive is relative based on the tool and its cost (time and money). Generally, tools that cost over $500 are considered expensive for individuals; over $1000 for a company. However, this is also relative based on the proportional savings the tool gives, the income/revenue of the buyer, and the benefit the buyer will have from owning the tool.
A tool may be considered expensive based on initial cost, but over time if not much maintenance is required, it's possible that someone got a bargain. This is something to keep in mind when working on your materials to help customers at this stage.
What you can include in your experience to make someone feel comfortable at this phase of the lifecycle:
Additional information about how the product will help the customer:
Demonstrate how your product solves his problem and reduces risk (time and money).
- Product literature: what exactly is it, what exactly is someone getting. Pretty much all of the content from the previous phase should help here.
- 3rd Party Reviews of Products. What does an expert have to say about your product? Publications, bureaus, analysts - they all carry a lot of weight. These 3rd parties may ask questions about a product that the standard customer/buyer never thought about. If anything, their analysis helps you, even if it is critical.
- Buyers Guides. Sure, this could sound misleading, but if you created a buyer guide that positioned how you prioritized your product requirements in the context for what someone should consider when they go to buy that type of product, you would be creating a very valuable list of purchase recommendations. It's basically your opinion of what makes a great product.
- Customer reviews: This is peer-to-peer advice. It’s not the same as expert advice, but people sharing their experiences with your product are always valuable. There is nothing more powerful than a peer's opinion.
Let them see your product in action so they understand first hand how it works
- Provide demos and samples for active tools. Showrooms for passive tools. Let the person experience the product first hand. Don’t discount the value of demos that use loaners, either. They also allow a customer/buyer the opportunity to experience what something is like - the pros and cons.
- For large scale purchases - encourage tours. A tour of customer sites or ability to see first-hand how customers use it is key for someone to purchase. It’s due diligence for a large purchase.
Content that shows how to reduce risk to make the decision
The customer wants to see how this decision will benefit his life and if it will save him time and/or money.
- Clearly communicate what comes with the product. Is it just the product or support too? How about the warranty? Explain everything. This could occur during conversations with a sales person or be included in datasheets. However, it needs to be clearly stated somewhere. For many online tools, this is posted clearly somewhere on the site.
- Tool to help determine what will the savings be for you. Ah - the famous calculator! How long will you have the product? What’s the cost per year? How does the product save you money? How does the cost compare if you buy up front vs finance it? Calculators can help answer these questions. They help the customer/buyer visualize the financial and logistical side of the purchase. If you aren’t sure what types of calculators you should include at your site, talk to someone in your procurement department. They can quickly tell you because this is what they consider for most products all day long.
And relationship building continues
- Keep telling the customer/buyer the truth. It increases honesty and transparency - and most certainly builds trust. Telling the truth will build the relationship if it doesn’t build a sale. Frankly, the relationship with a customer/prospect is far more important that the sale. The person may not buy today, but the person may refer you to a friend for a future project.
- Keep checking in with the customer, even if he says no. Keep in touch with him and let him know about new developments in the field - new technologies, ideas, approaches. Keep showing him that you are an innovator. And show what you offer for the solution - the tool/product, the support, the help. Make sure that the customer/buyer knows that you are there for them.
- Don’t beg a customer/prospect/buyer for information to get a sale! Let the customer initiate the sale. You only need to check in, provide information, answer questions, help them see what the product is like. Don't force ANYONE to buy ANYTHING. As I'll point out in future posts, those actions don't produce wins for anyone. If anything, it could be your downfall.
Make the competitive conversations about your customer - not you!
I think we often get confused about competitors and their role in product development. We will try to posture as producing the better solution or service, but “winning customers” doesn’t mean you won the overall competition. Competition will ALWAYS be there in some way. In fact, the option someone has to do nothing to solve a problem is competition.
Competition is a result of people wanting to create a “better product.” Often, the better product is targeted to a slightly different audience or people with different needs or life perspective.
Let’s face it - without competition, we wouldn’t have any drive to create a better product. In my course, there will be a unit on competition and it dives into this topic in more detail.
Customers are choosing a product that will work for them in their life changing decision to buy your product. Researching your competitors - even researching what it means to do nothing to solve the problem - is a way for someone to make sure they are choosing the right solution. This is why it’s not a bad thing when a customer doesn’t choose you and chooses a competitor. It's not really a loss because the customer wouldn’t be a fit with your services anyway. Either they would exit the process or worse - share their dissatisfaction with others. When a customer chooses a competitor, they are indirectly telling you that there is something that they want that you are or are not offering.
There are always customers for your service. And if you aren’t often selected, maybe you need to reconsider your target customer, expand that customer group, or change your product and service.
What you can do to leverage this idea?
- Continue targeting the types of customers you want to have. Stop thinking about customers you don't want. Focus on what you DO want. What do you offer that will make these people happy? What additional features will make them HAPPIER? Keep doing what is working for you and keeping customers interested. Stop doing what they don't like. Determine why they leave you and either stop doing that or work around it.
- Charts that compare your solution to others. People need to understand how all solutions compare so they can prioritize their needs. It doesn’t matter if you offer less. What matters is if what you offer is the best for what you are selling to your audience. How are you solving their problem? How do other solutions solve the problems? Do they offer too much? Not enough? Use criteria that you think your target customers want when you create these charts. And that criteria will show to the customer, in an indirect way, what you think is important for the right solution to their problem to include.
Part 4 will address owning the product and what that means.
nice..
Posted by: ajtuto | Saturday, May 12, 2018 at 07:49 PM