Whether or not you’ll win over a new buyer is already well-decided before you have your first encounter.
Most of the factors that influence your buyer’s decision-making have already done their work. Your only hope to change or maintain the buyer’s trajectory is to capitalize on whatever positive influences you have instilled along the way.
Buyers pass through eight stages of understanding before they contact you about a project, then another four stages are left before you have a customer for life.
The 12 Stages of Perceived Value
Whether any of the first eight stages has a positive influence is determined by how good your marketing is.
Think of the stages as a scorecard: each item is rated by the buyer on a scale of zero to ten, with ten being highly positive. If they pass through a stage without being influenced, that reduces the likelihood that you will close any deal later on.
Stages 1-4: Undifferentiated Value
The first four stages come during the buyer’s initial discovery, which may occur long before they have a specific need.
Buyer Initiates Their Search
1. The buyer has heard of you from other buyers.
2. They know what it is you do.
3. They know how to contact you.
4. They know what you say you do well.
These assess your undifferentiated value – the value one can perceive from simple observation.
Stages 5-8: Differentiated Value
The next four stages occur once the buyer has a project in play. The prospect will apply comparative analysis in order to validate their initial observations. Note: They still have not even contacted you yet.
Buyer Uses Comparative Analysis
5. You compare favorably to a known competitor or reasonable alternative.
6. Referrals and testimonials agree that you are a viable resource.
7. They have a sense of your cost and whether they can afford you.
8. They have a sense that you have a good overall reputation.
Stages five through eight gauge your differentiated value, which comes from validated sources coupled with contextual ratings. In other words, a third party has provided information that helps the buyer compare your offering to someone else’s.
Consumer review sites such as Yelp or Angie’s List offer this form of validation as do peers and experts. Chances are you have differentiated value whether you intended it or not.
You might conclude that some of your recent prospects do not seem to have spent time on all of these subjects. Indeed, buyers often skip steps, which makes closing more unlikely. Then there are all the prospects that you never find out about. We cannot possibly know how many potential buyers did not contact you based on their initial assessments. (However, a little market research can help you understand what causes folks to steer away from your company.)
Stages 9-12: Branded Value
If the customer passes through the eight stages of understanding with an overall positive impression, your chances of completing a sale are dramatically improved. However, there are four more hurdles to cross in order to be highly confident and it is entirely possible that stages one through eight have not made a positive impression.
There are many reasons why a buyer might still reach out to you – procurement rules, lack of choices, or an unverified recommendation. Therefore, it is paramount that you qualify that the buyer has done their homework before you presume to sell them anything.
Once They’ve Met You
9. They decide that they want to afford you.
10. Your company name becomes emblematic of their needs.
11. They will alter their budget to afford you.
12. They will alter their project to your specifications in order to work with you.
These final four steps represent your journey to Branded Value.
How the 12 Stages Impact Sales
Obviously, if you can help the buyer pass through stage nine, then your close rate trajectory will take a sharp upturn. However, you can also win business without winning over the customer. The process of building your value continues even after you’ve been selected.
A buyer that only clears the first four stages has made their decision without differentiation. That generally suggests that they see no difference between you and the other candidates and have chosen on price or some other mundane aspect of your offering. This will most likely lead to a decision based on price.
The buyer that passes through the differentiated stages five through eight with positive impressions begins their encounter with you as a likely buyer. This generally leads to a decision based on perceived value. Our primary interface at this stage is the salesperson. Did she reinforce or undermine your differentiated value? Did she deliver a price-appropriate solution?
Some sales processes are designed to intervene in the buyer’s journey of discovery with prospecting methods that introduce the potential buyer to your company before they have a need. This type of outreach is only useful for starting the process of assessing undifferentiated value sooner. A large pool of prospects engaged this way increases the likelihood that some will move on to considering your differentiated value once they have a project with which to engage.
The process of Business Development takes the prospect through the first eight stages. The process of Sales touches the final four.
If your marketing is not designed to influence the buyer’s perception of value, if direct contact doesn’t reinforce your reputation, if your sales team is poised to intercept instead of engage, then you are progressively reducing your close rate potential with every encounter.