Welcome back to the South Florida CEO Podcast. Today we’re going to dive into Today's Buyer's Journey and Where Your Company Fits In.
What does the buyer's journey today look like? And how exactly does your small- or medium-sized business in South Florida fit into all of that?
The Buyer’s Journey Defined
To make sure we're on the same page here, the buyer's journey is the active research process someone goes through in between when that person first starts looking for a solution to their problem and when that person ultimately makes a purchase.
Sometimes that person has a symptom that he’s looking for a cure for.
Sometimes that person has a question that he needs answered.
Sometimes that person has a problem he’s looking for a solution to.
And sometimes there’s a challenge and burning desire to find ideas on how to tackle that challenge.
Questions Are Being Asked By the Truckload
But in today's buyer’s journey, where so much starts with just simply asking a question on a search engine -- on a desktop computer, laptop, or mobile device -- using Google, Bing, Siri, Cortana, or Google Assistant.
People are asking questions like crazy. The kinds of questions they’re asking early depends on who it is that you're trying to attract your company. Who is the right person that you want to attract, in the right place, at the right time, and in the right context?
So they ask these questions. And they're just starting to gather solutions and answers to those questions.
Understanding What Your Prospects Really Care About
Early on, do they care about your needs? Of course not! They care about what's in it for them.
And it's super critical for people to get their minds around if you want to be relevant in today's buyer’s journey -- where your potential clients have all of the power. Your company is no longer in the driver's seat. So we need to figure out a way to position our companies so that we’re relevant to these future potential clients and seen as expert resources, subject matter experts, trusted advisors, educators, and thought leaders.
Because if we can get that kind of relationship, it is a game changer for how smoothly the sales process goes and how much friction that you're able to knock out of the buyer's journey and accelerate that person from stranger to visitor, visitor to lead, lead to sales opportunity, and ultimately a paying client.
Now we’re not done when they're a paying client. For any business that depends on recurring revenue or repeat sales, we need them to be a delighted paying client -- a good fit -- and a profitable paying client -- because when they’re delighted, they’re a heck of a lot more likely to become your company’s brand ambassadors and evangelists -- screaming from the virtual rooftops about how wonderful our companies are.
So again, the buyer's journey is the active research process that someone goes through in between when they’re first looking for a solution to their problem and when they actually make a purchase.
Stages of the Modern Buyer’s Journey and Decision-Stage Over-Weighting
What are some of the most important things to concern yourself with if you really want to dominate in your niche, sector, or industry when it comes to the modern buyer’s journey?
There are three basic stages of the modern buyer’s journey:
Most of the time, for companies that are relatively new to this, if your company has never really thought much about the buyer’s journey, almost all of your digital assets are going to be heavily over-weighted in the decision stage.
The reason that this is a problem is because most of the people that come to your website, that come upon your digital presence, that find you on social media, most of those folks are not going to buy that day.
Now it is possible that you have an e-commerce business or something with a very inexpensive purchase price and extremely short sale cycle -- where someone actually does buy on their very first conversation with you, their very first visit.
Average Sales Cycle Length
But in most cases, where there's a considered sales process, where someone does some research and looks at a bunch of different options, chances are your sales cycle is measured in somewhere between weeks or months -- and if the purchase is large enough, your average sales cycle length may even be several months to pushing more than a year.
So it’s very important for us to know our average sales cycle length.
Just like it’s really important for us to understand who our most important economic buyer is; who our primary buyer persona is.
When it comes to the modern buyer’s journey, we have to be aware of those three stages:
And be very cognizant that there’s a very good chance that you’re overweighted, that there’s way too much emphasis right now on your website and on social media on the decision stage, where someone is ready to buy.
Relevance is Everything
In order to be relevant in today’s modern buyer’s journey, where people are doing as much as 60% or 70% of their research before they're ready to talk to you, it's super critical that we figure out a way to be relevant in that early-stage research -- during their awareness stage where they’re just starting to be aware that there's some kind of probably that they need to solve. Or some kind of question that they need an answer to. Or some kind of goal or challenge that they're trying to address. We need to figure out a way to be relevant.
How do we figure out a better way to be relevant?
We need to understand that buyer persona and what's keeping them up at 2 o’clock in the morning. What are their goals? What are their secret desires? What kind of experience do they want from a company like yours? What do they look for? What kind of events do they attend? Where do they hang out online? Where do they hang out offline?
Once we start to get some consensus on this, we can prioritize what their biggest questions are and what their biggest concerns are. And we sure as heck need to make sure that we address these as proactively as possible. It's all about their questions, their challenges, their concerns, their problems, not yours.
And again, if everything is just focused on yourself and how wonderful your company is, and how wonderful your team is, all the awards that you've won, that's kind of sort of decision stage best case scenario. And it's completely tone deaf when it comes to the awareness stage -- where someone is just starting to be aware that they might have a problem
The consideration stage is what most people call the middle of the buyer's journey or the middle of the funnel. That's where they are starting to understand that the problem, their goal, their challenge actually has a name. They're starting to understand some of the lingo, some of their jargon. And they're looking to compare the different solutions that are available to address that.
They haven't yet come down to the point that they're looking at companies or looking at brands. They’re looking at broader categories, non-branded types of things that help them get their mind around what they’re trying to solve.
Now when it comes to today’s buyer’s journey, and where your company fits in, sometimes people question, “Well, what if our company sells to consumers? What if we’re business-to-consumer (B2C), as opposed to business-to-business or (B2B)? It doesn't matter all that much.
What matters is that you’re obsessed with understanding who that primary buyer persona is.
Who's the most important economic buyer that you're trying to reach?.Who's the second most important person that you're trying to reach, your secondary buyer persona?
And perhaps start to have some clarity on your negative buyer personas. Who’s always going to be a bad fit? Who do we want to knock out and disqualify at the top of the sales funnel, the early part of the buyer’s journey, as quickly as possible?
Because we know, they're never going to be happy with our product or service offering. We know they're never going to be a profitable client. And we want to make sure that our sales resources are not wasted on them.
So once we understand who the top two, perhaps at the absolutely most top three, most important people are, who are the bad fits we want to get out of there -- then we can get a better handle on who we need to really be paying attention to.
Why Tracking Average Sales Cycle Length is Much Trickier in the Modern Buyer’s Journey
Again, we have to understand the average sales cycle length. If you're not currently tracking how many days, weeks, or months it is in between when somebody is first logged into your CRM system (customer relationship management), or first subscribes, or first shows up on your radar screen, vs. when they actually purchase, we need to start almost immediately getting our minds around that stuff.
And bear in mind, what’s tricky today about keeping track of that number is that most of the time, by the time that person is on your radar screen, they’re a good 50%, 60%, 70% or more of their way through the decision-making process. So it may look like, on the surface that, that the average person’s sales cycle is only three weeks.
But that average of three weeks may only be for the 70%, 80%, 90%, or 100% point in the process -- the last 30% or 40% or so of what they're going through in the decision-making process.
So there’s a very good chance that there's at least another 6, 9, or 12 weeks in front of that where your company is not currently present -- because you're not relevant to that early stage of the buyer’s journey -- the awareness phase. You don't yet have educational resources, thought leadership, and trusted advisor status in the awareness and consideration stages of the buyer's journey.
Average Client Lifetime Value (LTV)
Besides our buyer personas and average sales cycle length, another big thing that we need to keep track of --- that’s super important -- is our average client lifetime value, sometimes called LTV (lifetime value).
Average client lifetime value is how much revenue an average customer of yours generates over the lifetime of its relationship with your company.
If someone only purchases from your company once, well that's their lifetime value. If a couple of months or a couple of years later they're going to purchase again, that new revenue gets added to their average client lifetime value.
If your business is based on a recurring revenue business model, that all adds to average client lifetime value.
But we need to have an idea when we're forecasting or tracking all of this, and understanding your buyer’s journey and where your company fits in, what we can afford to invest in scaling all of this.
We need to understand what your average client lifetime value is because that’s an enormous determinant of what kinds of resources are worth allocating towards improving these outcomes.
Cost of Client Acquisition (COCA) and Its Relationship with Average Client Lifetime Value
At the same time, we're understanding our average client lifetime value, we need to pay really close attention to our cost of client acquisition.
If you've ever watched the reality TV show Shark Tank, you know that the venture capitalists on there are obsessed with asking questions about your numbers. One of the questions that they always ask is, “What is your cost to acquire a customer?”
And you don't have to have the kind of company that's looking to get on Shark Tank to really, truly get your mind around how critical that question is to be able to answer.
Because there's a direct relationship between what a client is worth to your business and what you can afford to invest in getting that kind of client.
For example, if you have an accounting firm and you work with small clients. And you know an average client spends $3,000 with you on accounting fees every single year. And your average client has been with you for five years.
So you can take $3,000 a year in professional services fees x 5 years and back into your average client lifetime value of $15,000 -- at least for that particular buyer persona.
Now, this figure puts an upper limit on what we can afford to invest in acquiring a customer like that. We're certainly not going to spend $30,000 or $10,000 or perhaps even $5,000 to acquire a $15,000 client.
But along the same lines, many small- and medium-sized businesses severely underinvest in client acquisition and struggle to scale because they don't have a high degree of confidence in their buyer personas. They don't have a high degree of confidence in their average client lifetime value. So they may not be investing in any of this at all. Or the investments that they do make are so minuscule that it would be wildly unrealistic for them to have expectations of being able to repeat.
Product/Market Fit (PMF)
So we need to understand the average client lifetime value. We need to understand our average cost of client acquisition, sometimes called COCA. And we need to have an idea about whether our company has achieved product/market fit (PMF).
We need to know exactly who are ideal customers are. We need to know exactly what their average purchase sizes are. We need to know how often they buy. We need to know how long they stick.
Because once we have that, we can figure out whether there is strong demand to be able to scale the business. If we don't yet know who the ideal customers are, if we can't yet answer those questions with some of those basic metrics, we need to keep trying to figure out product/market fit as quickly as possible.
How Your Company Fits Into Today’s Buyer’s Journey
So one of the biggest challenges with all of this -- with getting our mind around being relevant in today’s buyer’s journey: we have to be mindful of just how much the buyer's journey has changed in the last couple of years.
Like I said before, most buyer’s journeys are starting with people asking questions; asking a question on search, asking a question on social -- so much to the point -- and they’re finding such great resources out there -- that by the time they're ready to talk to a company like yours, they may be 60%, 70%, or more through that decision making process.
And this is a big challenge for a lot of companies that are completely invisible early on.
But it's also a great opportunity for those companies that are able to get found early on and earn a seat at the table as a trusted advisor.
Google and the Zero Moment of Truth (ZMOT)
Google, a couple of years ago, put out a piece of thought leadership that explains this and looks at this with a slightly different angle. Google called it the Zero Moment of Truth (ZMOT).
What Zero Moment of Truth is all about: these changes in how people research and make decisions have been so profound that it's no longer about what you say about your brand. Your brand is what the Internet collectively -- on search engines and social media -- say about your brand.
Search and social are enormously impactful in shaping people’s buyer’s journey and ultimately their purchase decisions.
The best way for your company to own the buyer’s journey is that you must have
- Content available for each buyer persona (starting with and prioritizing your primary buyer persona and then your secondary buyer persona)
- Content for each stage of buyer’s journey (Awareness, Consideration, and Decision)
We must be able to prioritize. We can't be like the kid in the candy shop where we have eight different kinds of customers or 12 different kinds of customers, that we’re trying to appeal to. And we (mistakenly) weight them all or value them all, equally.
Surely if you look at the gross revenue and the profitability of those kinds of clients, you must have some inkling as to what you want to start with and where you want to prioritize.
Content for Each Buyer Persona and Each Stage of the Buyer’s Journey
So we need to have content for each of those buyer personas. Because chances are, if you do the buyer personas correctly, you’ll find that they look at things differently. They have different ways of looking at the world. And they have different problems, different challenges, and different language.
We also need to have content available for each stage of the buyer's journey. If we make the flawed assumption that every stranger that hits our website on day one is immediately ready to buy, that’s not a good place to be. It comes across as very selfish. It comes across as very mercenary. And chances are, it sends a really bad first impression that you don't really get what they're all about. And chances are, they're finding another company that you directly compete with, or indirectly compete with, or maybe even a non-business-model competitor that's providing information, educational resources and thought leadership that's a lot more relevant in that awareness stage.
So again, the best way to own the modern buyer's journey is to make sure you have content for each buyer persona, especially your primary and secondary buyer persona -- and you have content for each stage of the buyer’s journey:
- Early-on awareness type of content that’s completely product agnostic and company agnostic
- Content for the middle of the buyer’s journey, for each buyer persona, that helps people narrow down their options and compare the different solutions
- Decision stage
Again, chances are if you've been doing digital marketing, Internet marketing, content marketing, or Inbound marketing, you're probably over-weighted, over-stocked on decision stage content. But we need to make sure that your decision stage content is customized and personalized for each of your buyer personas.
So if you look at your primary and your secondary buyer persona, and you look at the three different stages of the buyer's journey, think about a matrix -- like a two by three matrix. So we have six boxes that we need to fill up.
And in those six boxes, we need
- Conversion paths -- landing pages, forms, calls to action, and confirmation pages
- Workflows for lead nurturing that continues to educate and build trust
- Premium content that goes behind those landing pages, so people have a reason to raise their hands and give you their information for what's on the other side of that landing page
Preferred Content Formats
What’s also supercritical is to make sure that you understand that at different stages of the buyer's journey, people have different preferences for content formats.
If you want to learn more about a new business, or a new company that you’ve never heard of before -- their products or services, there are different kinds of content that people prefer.
When people have been surveyed about these kinds of things, what comes up very high on the list?
- Product information about features and functions (classic decision stage content)
- Product ratings and reviews also come up fairly high on the list. Why? Product ratings and reviews are especially interesting as third-party social proof that is more trustworthy than what comes out of your mouth.
- Peer experience
- Case studies
- Demos are critical because most people are very visual learners. Certain people learn best by reading. There are a lot of people that learn best by hearing. Some people learn best by seeing and experiencing. But the general trend on the web, search, and social media is multimedia content -- especially video.
The Importance of Video Content in Today’s Buyer’s Journey
Video-based content is exploding like crazy as mobile devices have gotten faster, mobile broadband has gotten faster, and the amount of content being uploaded as video on YouTube, Instagram, Linkedin, Facebook is just off the charts. Linkedin and Facebook both have native ways of uploading videos where they actually give preference to uploading videos natively as opposed to just sharing a YouTube link.
But the general trend is highly-favoring multimedia video content. So we need to make sure that we certainly have that type of content asset and those kinds of learning resources available for each of your most important buyer personas -- your primary and secondary buyer persona -- and your buyer’s journey stages.
Most of the time, companies that are new to video just create late-stage content for the decision stage of the buyer’s journey -- which means:
- “Yay, clap for us. We’re wonderful.”
- “Yay, we won these awards.”
- “Yay, these are our products.”
Yes, that approach certainly has its place. But that’s like the seventh, eighth, and ninth inning (for baseball fans).
This means that we need to try harder to be relevant in the first six or seven Innings and the first 70% of the buyer’s journey. So strangers who have not yet heard of our company have a reason to pay attention to what we're talking about.
The Bottom Line on Today's Buyer's Journey and Where Your South Florida-Based Company Fits In
So today we've been talking all about today's buyer’s journey and where small- and medium-sized businesses in South Florida fit into all of this.
We started out by talking about the buyer’s journey and the three different stages of the buyer’s journey.
We talked about getting your mind around some key metrics: including sales cycle length, average client lifetime value, and cost of client acquisition.
We talked about the 70% factor and Google’s Zero Moment of Truth.
We talked about what it takes for your company to own the buyer’s journey, to completely dominate the buyer’s journey for your first and second most important buyer persona.
And we talked about different kinds of content that are especially relevant to people in shaping their ultimate purchase decisions.
I’m so glad to have you with us for this episode of the South Florida CEO Podcast.
I’m Joshua Feinberg. And we look forward to seeing you back again next time.
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