One of the most important things you can do for your business is to really understand how your sales process works. A potential customer typically doesn’t hear one ad or one recommendation and then come into your business and buy from you. There is a process that happens naturally and understanding how it works, and how you can help it move along fast, is the key to having more business faster.
In today’s post I want to help you discover the key to understanding how a potential customer becomes a customer and how to use that information to your business’ advantage.
Setting the Stage
At this point in your customer’s life they have no knowledge of your brand. They have never heard of you and the only ingredient present in the recipe of them becoming a customer is that they have a need (or will have a need in the future) for your product or service. At this stage in the game, getting their business is up for grabs. They have a problem and the need it to be solved by some outside force (hopefully…. you).
With that said, lets dive into the key stages of the potential customer life cycle and how to move them through each.
Stage 1: Awareness
This is where your “cold advertising” comes in. Someone hearing about your business on the Radio, TV, Newspaper, or via a Facebook ad the first time isn’t going to get them to buy from you 99% of the time. Those ads will begin to establish awareness about your brand, however. Most people “swing for the fences” in these types of ads and try to get the customer right away and this usually leads to disappointing results.
The key with advertising to a cold prospect is to do more than try to pitch your product. In the stage of gathering awareness we need to focus more on teaching and telling stories. These types of messages are going to stick with your prospect far more than a pitch for them to buy something.
Remember: At this stage your prospect doesn’t know or trust your business. They may not even be aware they need your product/service yet.
The goal of this stage of marketing your product or service is to make them aware that you exist. This can be done by teaching them about something they didn’t know or telling them an interesting story (which also has embedded teaching).
Check out the video Below for a quick example of an ad that is designed to gain awareness through the use of a teaching story:
This is a video that was put out by Gordon Ramsey’s book publisher in order to promote an upcoming “how to” book from Ramsay. Notice how informative this video is and how easy it is to consume and implement. I can promise you this sold some books and has been shared all over the place because its so useful on its own.
Think about all the things you could teach for free in your ads instead of going straight for the sale. These kinds of “free guides” and “walkthroughs” are easy to put together and really make people aware of your presence in the marketplace (even if you aren’t a celebrity already).
Stage 2: Consideration
At this stage, your cold prospect is now aware of you and is starting to connect that you can solve a problem they may be experiencing. The key thing to realize in this stage is that by making your audience aware of your company you have most likely pushed them into realizing a two key things.
- They Have a Problem that you can Solve.
- You have competitors that also claim to be able to solve it.
Once they realize that they have a problem and that you may be a solution, they will go looking for alternatives to compare to you. A consumer wants to make sure that what you claim to be is legitimate and that there is no one else out there who can solve it better than you. At this stage a few key marketing points start to come into play.
Key Concerns in Stage 2:
- Quality of Product/Service Delivered
- Branding (what about your brand fits them better than your competitors)
- Social Proof (do they know anyone who has used you and prefers you)
When someone is deciding who to choose to solve their problem they need to lock into at least two of the key concerns above. If you can be the business that fits two of the Key Concerns, you’re well on your way to locking them in as a customer. You don’t have to nail all five (but the more you get the better off you are).
Stage 3: Preference
The transition from the Consideration stage to Stage 3 is a powerful thing.
At this point in the customer lifecycle, they have checked enough of the key concern boxes (see above in stage 2) in your favor to start believing that you are the right choice to solve their problem. At this stage you still haven’t converted them into a paying customer, however.
They have decided in their minds that you are the best available option to solve their problem and that your competitors are not going to be their first choice unless something happens between this stage and the next one to tip the scales in your competitor’s favor.
This is where you need to implement tactics to tip you potential client in your favor (before a competitor has a chance to tip them back to theirs). You have an advantage at this point because a client has already made up their mind that you are the key to solving their problem, but you need mechanisms in place that can push them over the edge.
Some Tipping Points that Push Clients from Stage 3 to Stage 4 (Purchasing)
- Promotions pointed at Just them (this further locks in that you are the right fit)
- More Content that Teaches them something (proving you are the expert to trust)
- More Stories that further your brand message
- More people talking about how great you are (social proof/testimonials)
Stage 4: Purchase
It finally happens. The potential customer broke through all barriers and actually invest in your product or service.
This is the stage where most businesses drop the ball entirely because they feel the process is complete. This is where great businesses develop into powerhouses. A customer has had to overcome many hurdles to spend money with you at this point and immediately after purchase they are trying to decide if they made the right decision.
By doing a few small things immediately after the purchase you can effectively make up their minds for them.
Some key things to do after a Purchase to lead a customer to “Loyalty”.
- Send them a Thank You Note.
- Outline a clear Customer Support Line of Communication
- Support their purchase relentlessly (even outside of the guaranteed time if possible)
- Call them on the Phone just to see how things are going (if possible)
- Deliver at least 5x the Value of their purchase (if they bought something for $100 give them things that seem to be worth $500)
- Give them benefits that non customers don’t get (private sales, service, etc)
If you do the right things post purchase, you’ll be able to easily transition your customers into the next Stage: Loyalty.
Stage 5: Loyalty
Loyalty happens when you give a customer a reason to believe that they made the right decision purchasing from you (as covered in “Stage 4”). Once a customer is in this stage, they will go out of their way to buy from you again and again. This happens because you have proven that it is easy for them to spend money with you and that they will get more than they pay for when they do.
A key thing for any business is to give customers benefits for being loyal and make special considerations for customers that have exhibited that they are loyal to your brand.
A Few Ideas to Advocate Loyalty and Reward it:
- Private Discounts for Repeat Customers
- Private Membership Programs to Loyal Customers
- Small Notes of Thanks (no sales pitch attached)
- Birthday Notes (just say happy birthday)
- Make Good Customers Famous (talk about your best customers)
Please note: This stage of the customer life cycle is the first stage that you should ever try to get testimonials and referrals from. Not all Loyal Customers will send you referrals. The key to getting them to do that can be found in Stage 6. It is never wise to ask for testimonials or referrals from anyone that is below this point in your customer lifecycle.
Stage 6: Advocacy
Even great businesses mess this up and miss one of the greatest opportunities to get new business they can get. Most businesses don’t focus on testimonials and referrals because they get busy with the “day to day” work of running their business. If you look back through all stages of the customer lifecycle on this page, however, you’ll find that referrals are a big part of the process.
Getting a customer to this point is not easy, but once you do, you have the most valuable sales tool that your business can obtain. There is no advertising on the planet that compares to word of mouth marketing.
So… How do you get someone to the point where they will be an advocate for your business?
There are two key components:
- Asking for the Referral the Right way.
Let’s cover those in depth.
You should never ask for a referral or testimonial until you have a customer that has achieved the loyalty stage. Many businesses mess this up and ask for it during the “Purchase Stage” of the Customer Life Cycle and that’s why they have gotten such disappointing results and lackluster testimonials.
The key is to wait until you start seeing symptoms of customer loyalty and after you have rewarded that as outlined in Stage 5.
Once a customer has exhibited that they LOVE your business and they start to take ownership of it as “Theirs”, you can start to ask them for testimonials and referrals.
Asking for a Referral the Right Way:
- Don’t directly ask for it at first.
- Ask for a testimonial instead.
- Once you get a testimonial, encourage them to be on the “team”.
This flies in the face of what many smart business owners tell you but it all comes down to this. If you ask the right questions from a happy customer, you will set them up to answer those questions, not only to you, but to the world at large.
What I mean by that is this:
When you have good customer that has proven themselves to be loyal, you want to contact them and ask them to give a testimonial about why they love your business. You can do that by getting them to answer these questions in order:
Question 1: What Problem Were you having that lead you to our Business?
Question 2: How did you hear about our Business/Product/Service?
Question 3: What was the Result of Using our Product/Service to Solve your Problem?
Question 4: If you had a friend/family member who was having the same problem would you recommend us to help them? Why?
The Video Below will explain why these questions are so powerful.
Once you get a testimonial from someone, you have effectively made them think through why they use your product or service. This helps them work through what they would say to someone who might need your service/product as well. After that, you just need to make sure that you show them that you see them as a vital part of the business family.
Once they understand that they are a part of your “family” it becomes easy to talk more about your business with others. This can be accomplished by simply doing everything in Stage 5 and also letting them know occasionally that the success of your business depends on referrals from your best customers.
Why the Life Cycle Matters:
Business Owners and managers spends a great deal of time trying to understand how to communicate with their potential customers and customers better, but often it can be a mess. Understanding what you need to do and when you need to do it is important and understanding the “Funnel” that a customer goes through to get to you, buy from you, and recommend you is important.
Understanding the cycle will not only help get more customers in the door, it’s going to keep them inside. This is what will keep your business alive, and the revenue stream flowing
I hope this walkthrough was helpful to you in your business.
***** I’d love to hear what you think below. Let me know below.
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