What Is The New B2B Buying Cycle & 6 Timeless Tips
The B2B buying cycle is a critical concept for those who sell products or services to other businesses, as it gives insight into the journey a customer takes when making a purchase. It is essential for companies to understand this cycle in order to tailor their sales strategies and build strong, long-lasting relationships with their customers.
It typically involves five stages: prospecting, qualifying, presenting, closing, and follow-up. Each stage requires a unique approach and strategy from sales representatives, and understanding the needs and concerns of B2B buyers at each stage is crucial for success.
In this post, we will delve into the B2B buying cycle, a crucial part of the B2B buying journey, and explore the tips and strategies that can help companies navigate this process effectively. We will cover the key considerations for each stage of the cycle and provide practical advice on how to approach each step with confidence.
- The B2B buying cycle is the process of closing and keeping a customer
- Without retention, customer acquisition efforts go to waste
- Awareness ➡️ Interest ➡️ Evaluation ➡️ Purchase ➡️ Renewal
What is the B2B Buying Cycle?
As the great Peter Drucker once said, “The purpose of business is to create and keep a customer.” Understanding the process that a business undergoes when making a purchase from another business is crucial in order to effectively target and engage with potential customers.
The B2B buying cycle typically consists of several stages, here are some of the general stages:
- Problem recognition: In this stage, the business realizes that it is facing a challenge or requirement that calls for a solution.
- Information gathering: The business commences its search for information on potential solutions to the problem at hand.
- Solution evaluation: The business carefully evaluates the solutions found, weighing factors such as price, quality, and functionality.
- Purchase decision: The business decides on the solution it will purchase and from which supplier.
- Post-purchase evaluation: After the purchase has been made, the business assesses the performance of the solution and supplier.
It is worth noting that throughout the B2B buying cycle, businesses engage in numerous interactions with potential suppliers, including online research, meetings, demonstrations, and negotiations. These interactions play a vital role in enabling the business to make informed decisions and cultivate long-lasting relationships with suppliers.
Understanding the B2B buying cycle is crucial for companies looking to tailor their marketing and sales strategies to meet the specific needs of each potential customer. By anticipating the needs and concerns of businesses at various stages of the cycle, companies can position themselves for success in the competitive world of B2B commerce.
What is a B2B Sales Cycle
Similar to the B2B buying cycle, the B2B sales cycle is a journey, a story that businesses undertake when purchasing from one another. This concept is vital for companies that sell to other businesses. It helps to reveal the path a customer takes when making a purchase, and the various types of engagements they have with the company at each stage.
The B2B sales cycle typically has five chapters: Prospecting, Qualifying, Presenting, Closing, and Follow-Up.
In the first chapter, Prospecting, sales representatives identify potential customers and initiate contact with them. This can include online investigations, participating in events and trade fairs, and reaching out to businesses through cold calls, email, or direct mail. The aim of this chapter is to create interest in the company’s offerings and determine if the business is a suitable match for the company.
Next, in the Qualifying chapter, sales representatives assess the needs and budget of the potential customer to determine if they are a suitable match for the company. This can involve asking questions, conducting research, and evaluating the business’s buying process. The objective of this chapter is to ascertain if the business has a genuine requirement for the company’s products or services and if they possess the budget and decision-making power to make a purchase.
The Presenting chapter is where sales representatives provide a comprehensive overview of the company’s products or services to the potential customer. This can include demonstrations, product information sessions, and online presentations. The aim of this chapter is to educate the customer about the company’s offerings and demonstrate how they can fulfill their needs.
In the Closing chapter, sales representatives negotiate and secure a purchase agreement with the potential customer. This can include negotiations, agreement on the terms and conditions of the B2B sale, and the creation of a contract. The goal of this chapter is to secure a purchase agreement and persuade the customer to sign on the dotted line.
Finally, in the Follow-Up chapter, sales representatives ensure that the customer is satisfied with the purchase and maintain ongoing contact with the customer to foster a long-lasting relationship. This can include checking in with the customer, addressing any concerns or issues that may arise, and providing ongoing support and education about the company’s products or services. The aim of this chapter is to ensure that the customer is content with their purchase and to form a strong, long-lasting relationship with the customer.
Throughout the B2B sales cycle, sales representatives engage in a variety of interactions with potential customers, including online research, meetings, demonstrations, and negotiations. These interactions help sales representatives make informed decisions, build relationships with potential customers, and ultimately secure a sale.
It is crucial for companies to comprehend the B2B sales cycle in order to effectively target and engage with potential customers. By anticipating the needs and concerns of businesses at different stages of the cycle, companies can tailor their sales and B2B marketing strategies to meet the specific needs of each potential customer and form robust, long-lasting relationships.
For instance, in the Prospecting chapter, a company might concentrate on generating leads through cold calls, email campaigns, or online advertising. In the Qualifying chapter, the company might assess the needs and budget of the potential customer to determine if they are a suitable match for the company. In the Presenting chapter, the company might offer detailed product information, case studies, and customer testimonials to help businesses make informed decisions. And in the Closing chapter, the company might negotiate the terms and conditions of the sale to secure a purchase agreement.
Simple-sounding stuff right? The hard part is executing consistently.
What are the 3 Types of B2B Purchases?
Now that we’ve understood what the B2B buying cycle and B2B sales cycle are, it’s important that we also understand the 3 types of B2B purchases.
Let us delve into the world of B2B purchases – transactions made between two businesses, as opposed to between a business and a consumer. These transactions are not to be taken lightly, for they require a great deal of thought, consideration, and execution. And so, it is imperative that we understand the different types of B2B purchases and the stages involved in the B2B buying cycle.
First and foremost, B2B purchases can be broken down into three main categories: commodity purchases, projects, and solutions.
- Commodity Purchases: Commodity purchases are simple transactions that involve the purchase of goods or services that are low in value and complexity. They are typically made on a recurring basis, such as office supplies or raw materials, and are made based on price, delivery time, and quality. There is little consideration given to the relationship between the buyer and the supplier in these types of purchases.
- Project Purchases: Project purchases, however, are more complex and of higher value. They are made for a specific purpose, such as construction projects, IT installations, or equipment upgrades, and require extensive research and evaluation. The buyer will carefully consider the relationship with the supplier and work closely with them to develop a customized solution that meets their specific needs.
- Solution Purchases: Solution purchases are the most complex and strategic type of B2B purchase. They involve a long-term partnership between the buyer and the supplier, with the goal of addressing a broader business challenge or problem. The supplier provides a comprehensive solution that integrates products, services, and expertise, while the buyer provides access to their organization and support throughout the implementation process. Examples of solution purchases include enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, expert consulting, and outsourcing agreements.
The process of making a B2B purchase typically involves several stages, including problem recognition, information gathering, solution evaluation, purchase decision, implementation, and post-purchase evaluation, as mentioned in our two previous posts on the B2B buying journey. The buyer recognizes a need or problem, gathers information about potential solutions, evaluates the solutions considering factors such as price, quality, and functionality, decides which solution to purchase, implements the solution, and evaluates its performance after the purchase has been made.
It is imperative that businesses understand the different types of B2B purchases and the stages involved in the B2B buying cycle in order to successfully market and sell to other businesses. By anticipating the needs and concerns of businesses at different stages of the cycle, companies can tailor their marketing and sales strategies to meet the specific needs of each potential customer, build strong relationships, and secure repeat business.
B2B purchases are complex transactions that require a great deal of thought, consideration, and execution. By understanding the different types of B2B purchases and the stages involved in the B2B buying cycle, companies can develop effective marketing and sales strategies that will help them succeed in the B2B marketplace.
What is the B2B Customer Lifecycle?
We’re progressing quite well! We’ve learnt about the B2B buying cycle and B2B sales cycle, as well as the 3 types of B2B purchases. This leads us to the B2B customer lifecycle, the most fun part of the process. After reading this post, we want you to plan out how you’ll get 100% renewals!
The B2B customer lifecycle is the journey a business takes when they interact with a company, from the moment they become aware of a need to the final renewal. It is essential for companies that sell products or services to other businesses to comprehend this concept, as it enables them to grasp the path a customer takes when making a purchase, and the various interactions they have with the company at each stage.
You see, by understanding the B2B customer lifecycle, companies can tweak their marketing and sales strategies to cater to the specific requirements of each customer and establish strong, enduring relationships.
There are five stages in the customer lifecycle that I want to draw your attention to: Awareness, Interest, Evaluation, Purchase, and Renewal.
- Awareness: This is where a business realizes it has a problem that requires a solution. During this stage, the business commences its search for potential solutions, conducting online research, seeking advice from industry experts, and attending events and trade shows.
- Interest: Once the business has identified the problem and gathered information on possible solutions, it begins to take an interest in specific solutions. This stage involves reaching out to suppliers for further information, attending demonstrations, and participating in initial discussions.
- Evaluation: During this stage, the business assesses the solutions it has found and determines which one is the best fit. This involves comparing prices, quality, and functionality and may involve negotiations with suppliers. The business may also perform in-depth research and testing to ensure the solution meets its specific needs.
- Purchase: After evaluating its options, the business makes a purchase decision. This may involve approval from multiple stakeholders and the creation of a contract. The business will choose the solution and supplier that offers the best value and meets its needs effectively.
- Renewal: Finally, the business evaluates the solution and supplier performance and decides whether to renew the contract or renegotiate terms. This may involve ongoing monitoring, performance reviews, and negotiations.
Similar to what we said in the B2B buying cycle section, throughout the customer lifecycle, businesses engage in a plethora of interactions with suppliers, including online research, meetings, demonstrations, and negotiations. These interactions help businesses make informed decisions, develop relationships with suppliers, and ultimately ensure their needs are met.
It is imperative for businesses to understand the B2B customer lifecycle to target and engage potential customers effectively. By anticipating the needs and concerns of businesses at different stages of the cycle, companies can tailor their marketing and sales strategies to meet the specific requirements of each potential customer and establish strong, lasting relationships.
For instance, during the awareness stage, a company might focus on increasing awareness of its products or services through content marketing, social media, and online advertising. In the interest stage, the company may offer free trials or demonstrations to entice businesses to try its products or services. During the evaluation stage, the company may provide detailed product information, case studies, and customer testimonials to help businesses make informed decisions. And in the renewal stage, the company may offer incentives such as discounts or loyalty programs to encourage businesses to renew their contracts.
The B2B customer lifecycle is an integral aspect for businesses that sell products or services to other businesses. By understanding the journey that customers undertake when making a purchase and the various interactions they have with the company at each stage, businesses can tweak their marketing and sales strategies to meet the specific requirements of each customer and establish strong, enduring relationships.
So, my friends, embrace this concept and watch your business soar to new heights! Set an aspirational goal for 80-100% renewals, and you’ll achieve close to it.
As a seasoned marketer, I have seen the many challenges that businesses face when navigating the B2B buying cycle. Whether you are a sales representative or a marketer, understanding the B2B buying process and the motivations of B2B buyers is essential to building strong relationships and closing successful deals. Here are some tips for navigating the B2B buying cycle with ease and confidence:
- Know your audience. The B2B market is made up of a diverse group of consumers, each with their own unique needs, motivations, and buying processes. As a sales rep or marketer, it is crucial to understand who your target audience is and what they are looking for in a product or service. This information can be gathered through online research, customer interviews, or market surveys. By taking the time to understand your target audience, you will be better equipped to tailor your sales approach and messaging to meet their specific needs.
- Build relationships. The B2B buying process is often a long and complex journey, from top of funnel marketing to closing and retaining the client. Whether you are reaching out to potential customers through cold calls, email, or online advertising, it is important to be personable, professional, and build trust with your target audience. By establishing strong relationships with B2B buyers, you will be better equipped to understand their needs, anticipate their concerns, and effectively address any issues that may arise during the sales process.
- Be a valuable resource. As a sales rep or marketer, your goal should be to position yourself as a valuable resource for B2B buyers throughout your B2B demand generation process. This can be achieved by offering valuable insights, sharing industry trends, and providing educational resources that help B2B buyers make informed decisions. By providing B2B buyers with the information and support they need, you can build their trust and establish yourself as a trusted advisor, making the sales process smoother and more effective.
- Focus on the benefits. When navigating the B2B buying cycle, it is important to focus on the benefits of your product or service rather than the features. B2B buyers are motivated by the potential impact that a product or service will have on their business, so it is important to articulate these benefits in a clear and concise manner. Whether you are presenting your products or services in a demo, or crafting a sales email, be sure to highlight the benefits that will help B2B buyers achieve their goals and improve their business.
- Adapt to change. The B2B buying process is constantly evolving, and it is important to be flexible and adapt to change. This means staying up-to-date on the latest trends and developments in your industry, as well as being open to new and innovative sales approaches, such as B2B marketing automation. By being adaptable and embracing change, you can stay ahead of the curve and continue to effectively navigate the B2B buying cycle.
- Follow up. Finally, it is essential to follow up with B2B buyers throughout the sales process and after the sale has been completed. This means checking in with B2B buyers to ensure that they are satisfied with their purchase, addressing any concerns or issues that may arise, and maintaining ongoing contact to foster a long-lasting relationship. By following up and providing ongoing support, you can build trust and establish yourself as a trusted partner to B2B buyers.
In conclusion, the B2B buying cycle is a complex and dynamic process, and it requires a strategic and thoughtful approach. By understanding the needs and motivations of B2B buyers, building relationships, positioning yourself as a valuable resource, focusing on the benefits of your products or services, adapting to change, and following up, you can effectively navigate the B2B buying cycle.
The Final Word
Understanding this cycle and being prepared for each stage of the process can give companies a significant advantage in the B2B market. Whether you are a seasoned B2B marketer or a sales representative just starting out, taking the time to understand the B2B buying cycle will put you ahead of the competition and help you build strong, long-lasting relationships with your customers.
So, my friends, I encourage you to take the time to study the B2B buying cycle, familiarize yourself with the key considerations for each stage, and develop a strategy for success. With the right approach, you will be able to navigate the B2B buying process with ease and secure more sales for your company.
If you need help with building and understanding your B2B buying cycle, consider scheduling a complimentary strategy session with a team of digital marketing trailblazers.
Until next time!