Oct 23, 2008

Customer Purchase Lifecycle

The Customer Purchasing Lifecycle

Before you decide on selling anything online, you need to first determine whom your customer is, what they purchase, and why they are purchasing online.

One of the most common mistakes we see people make is promoting to a customer (or audience) before they fully understand who their audience is. It is very easy to waste money promoting what you "think" people want, rather than what they are actually looking for.

Before we go any further, we need to understand the steps someone takes between the time they learn of a product or service, to the time that they actually make a purchase. It is a known fact that it typically takes a person 7 times (this could be website visits, email newsletter, etc.) before they make a purchase online. We are going to show you how to catch people later in their buying cycle so you can increase your chances of someone buying from your website.

Purchasing Phases

Research Phase -> Decision Phase -> Purchasing Phase

(1) Research Phase

People love learn before they buy, they’re hungry for information about the product/service that they may decide to purchase. Although some purchasing decisions are more spontaneous than others, people learn about a product before they purchase it, and this “learning” is done using many mediums. These could include television, online, magazine, friend referral, from a celebrity, a roadside billboard, etc.

People naturally gravitate online to complete their research, as it is the “information highway”. You can find information on virtually anything through a simple search in Google, thus why the majority of the research is done on the net.

(2) Decision Phase

Some people have already made up their mind as to what product they are going to buy, and they want it now. While others go through a decision phase where they research a number of products/services and decide which one best suits them.

Someone’s decision can be easily persuaded by reviews and personalized opinions of others. This is where a good Internet marketer can intercept an individual, showcase certain products that are similar, and deliver a convincing review to promote a decision.

(3) Purchasing/Action Phase.

The final phase is the one that is profitable to us as Internet marketers. No commissions will be paid unless there is an action that takes place! Whether this is a click, a lead, or a sale, a visitor needs to become a customer to fulfill the lifecycle.

During the purchasing phase, it is very difficult to detour someone from their purchasing decision. They have done their research, made the decision, and now are fully prepared to buy. In an ideal world, you would be able to target all the people within this phase, but often times the research and searching is complete at this point. An example of a search term that would target people within this phrase would be “purchase product_name, order product_name, buy product_name”.

The Misconception of an Advertiser

If you are trying to sell golf clubs online and deliver traffic coming from general keywords like “golf” or even a keyword phrase like “golf clubs”, chances are you will not have a high conversion rate. The reason that “golf clubs” won’t convert is because you’re picking up this visitor too early in the purchasing life cycle. At this point, they are typically looking for information about golf clubs. They are not looking to buy, and will usually perform several more searches before they do decide to make a purchasing decision..

Let’s drill down a little further and catch someone a little further along in the purchasing lifecycle. We now know that “golf” & “golf clubs” won’t convert very high. After visiting a few forums, you can easily discover that people are searching for irons, putters, drivers, wedges, or specialize clubs. So, chances are that the keyword “golf clubs” (although seemingly targeted) is actually way too broad.

If you start promoting here, it will take a lot more work to actually sell than if you were to dig a little deeper into the purchasing lifecycle. Drivers, wedges, irons, and putters are still too broad and people want to learn about brand names, types, loft, and reviews before they make a purchase. Ideally, you would hyper-target someone who types in Taylor Made r5 Driver, or someone who is searching for a 56 degree Cleveland Gap Wedge. People that are searching these terms are SERIOUS buyers and are on the edge of the transition between a researcher and a customer.

It is much more work to walk someone through all the stages of the life-cycle, and typically requires several follow-ups.

Take Advantage of Company Advertising & Branding

When you see an ad in the newspaper, on the radio, on TV, or in a magazine, you should see this as an opportunity to take full advantage of these customers online. People often times learn about different products/services offline before they migrate online to do research and quite often, make a purchase online.

People who see advertising offline are also likely to be much further along in the purchasing lifecycle. This is because they have become knowledgeable of the brand, know what the company has to offer, and if the advertisement was effective, may be ready to purchase.

Another effective method of using company advertising is to use infomercial's to your advantage. Infomercial's do a great job of selling and by the time someone is done watching the show, they have made the decision whether they want to buy or not. Traditionally, people would make a purchase over the phone as it was the only method of ordering. However, many now use the Internet to order infomercial products. This is a great opportunity for you to offer people searching the product keywords either the product, or a related product that will work just as good if not better.

To take advantage of company advertising, you have to use product-type keywords. This could include company names or the actual product names. People will be more likely to buy if they are already familiar with a brand and have seen an advertisement prior to visiting your site.

Product-Related Keywords

Many advertisers don’t take advantage of product related keywords. When we say “product-related” we are referring to search terms that include the product name or the company name of the product that is being searched. For example, if someone was searching the term “Wealthy Affiliate Review”, this would be a product-related keyword for Wealthy Affiliate, as would “wealthy affiliate”, “wealthy affiliate program”, etc.

People who search product-related keywords are typically very far along in the purchasing lifecycle because they are already knowledgeable in the subject area and they have already been exposed to some form of branding or advertisement.

We will use the Wealthy Affiliate example again. Someone who is searching the term “wealthy affiliate” has probably already done a significant amount of research. They may have started by searching the term “affiliate marketing” and found a website promoting Wealthy Affiliate. They then did some additional research and analysis on Internet marketing related schools to decide which program would be best suited for them. Finally, they search the program they are interested in joining, Wealthy Affiliate.

As you can see, people who are searching product-related keywords are usually on the verge of becoming a customer. If you can deliver the information that they are looking to find (the program is excellent; the program is good, however check out this better alternative), then you will likely convert this visitor into a customer.

What is Your Purchasing Lifecycle?

Take a look at the last purchase that you made online. Where did you start and where did you end up? Did you purchase the same day that you started looking, and why or why not? Were you exposed to positive or negative advertising about a product? Did you see the product/service in a magazine or on TV before you saw it online? Was the price an issue for you, why or why not? What was the last phase in the analysis process before you actually purchased the product?

There are many things that you can learn from taking a look at how you purchase something online. You probably follow many of the steps that your visitors take when purchasing. You will find that you research things slightly differently from others may do, however the last few steps in the process before you make the purchasing will probably reflect that of all customers – you want to feel good about making the purchase.

Conclusion

Understanding why people buy and the different steps they take before they purchase will allow you to understand how to effectively promote a product. This will also allow you to gain a better understanding of how to find keywords that target someone who is further along in the purchasing lifecycle.

Highly profitable marketers make loads of money because they understand the mindset of a customer. They know not only how to turn their traffic to qualified customers, they understand how to take a visitor and walk them through the steps of the lifecycle (usually through a mail-out). Learn how to master the customer purchasing lifecycle and you will be able to apply these tactics to make any industry/market profitable



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