A key component of facilitating customer lifetime value is synchronizing selling and marketing to the buying process. The way people buy and the process the proceed through to make a purchase decision provides the mechanism for a transaction. Therefore, focusing on "what the buyer goes through" to buy is extremely important.
UPSA has named this process "Sales Cycle Management." You can read more about Sales Cycle Management.
The components of Sales Cycle Management are therefore the:
The first component of the Commerce Cycle is the UPSA Buying Cycle. The UPSA Buying Cycle details the thoughts and strategy of a potential buyer and the buying organization. By shifting specific focus to the buying environment within the UPSA Commerce Cycle, sales professionals recognize there is a distinct set of phases that a buyer engages in to buy. The result of the buying cycle will result in buying the product or service, or not. The UPSA Buying Cycle also includes the processes and activities found in selecting a potential vendor (the selling organization). This cycle is one half of the UPSA Continuous Selling Improvement Model discussed earlier in this chapter. This Buying Cycle outlines the commonly accepted and universally applied process by which a customer buys any product and details what they experience when they buy. It is important for sales professionals to understand this buying cycle because it will unlock many mysteries on what is happening during the sales process.
To illustrate, consider an organization purchasing any product or service. The organization would generally progress through the following nine phases:
- Plan – The buying organization outlines a plan for its business, such as its strategic plan, realignment of the organization, the acquisition of new capabilities, or define a new vision.
- Recognize – The buying organization realizes they have a need (based on what happened in phase one) and seeks to satisfy that need. They begin to take action towards buying (as opposed to making their own solution or product). They act accordingly by setting forth goals, objectives, targets, and budgets. They may appoint a team of people to evaluate potential vendors in this phase.
- Search – The buying organization engages in activities to find a vendor, partner, or supplier. They begin reviewing capabilities of selling organization(s) to see which competitor can meet their needs and with whom they would like to have a relationship.
- Assess – The buying organization requests proposals, conducts more in-depth meetings, requests more detailed information, has more “serious” dialogue, conducts an analysis of risk. The buying organization mitigates risk as much as possible.
- Choose – The buying organization has narrowed the choices down to one organization, begins “testing water” to gauge the organization's ability to fulfill. Has decided that benefits outweigh risks, begins talking about implementation.
- Obligate – The buying organization writes the check or signs the proposal. Key decision-makers have their reputation on the line, the budget is set aside, and the entire affected organization has begun moving in a new direction.
- Implement – The buying organization is now a “customer or client” and begins implementing the selected solution. They re-align organizational resources as necessary. They put long-term plans together
- Track – The customer formally or informally begins documenting the selling organization's ability to fulfill the solution. The buying organization looks for a return on their investment and justification to further or continue the relationship.
- Integrate – Obtaining maximum use of the product/service from within the buying organization. The buying organization ingrains the product/service into the competencies necessary to create their own products/services.
Obviously, the goal of selling is to have the customer attain a return-on-investment (ROI) in pre- and post- sales processes, and return-on-assets (ROA) once the purchase is capitalized. Ideally, the product or service will become fully integrated, leveraged, and justified. From a relationship perspective, the buying and selling organization begin to work with a more trust-based bond. The buying organization begins to include the selling organization in appropriate strategic discussions.
For a transaction to occur the buying organization must progress through every phase of the UPSA Buying Cycle; however, the length of time spent in each phase may be slowed or accelerated. A buyer may also exit the cycle at any time, for any reason. The nine phases may occur over one hour or may take years. Whatever the length of the buying cycle in the organization, whatever the product/service being evaluated, the buying organization is always in one of these nine phases. When a buying decision is made, it results in a decision to “buy” or “not buy” from the buying organization. This is often referred to closing or losing the sale. Obviously, sales professionals would like to close the most deals as possible bringing in greater revenue to their companies.
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The second component of the Commerce Cycle is the UPSA Selling Cycle. The UPSA Selling Cycle shows us the commonly accepted and universally functional phases that all sales professionals and the selling organization progress through to sell. The UPSA Selling Cycle explains what is typically experienced. A seller will move around inside of the selling cycle throughout the course of the selling relationship, but it is always at the discretion of the buyer.
There are the nine phases of the UPSA Selling Cycle as shown below. Some phases are more important at different times. Selling organizations are primarily results focused. The success of the selling organization in providing the necessary results will directly impact closing the sale or losing the sale. When a buying decision is made, it results in a decision to “buy” or “not buy.”
If the buyer decides to purchase from the seller, then the sales professional and his or her selling organizations are obligated to provide the product or service within the terms and conditions and the documentation necessary to fulfill the order. If the seller decides not to buy, then hopefully that decision was based on the needs of the buying organization and the product or service of the selling organization not matching up. No matter what the outcome, it should be a win-win decision for both the selling and the buying organization.
The result is: the seller is able to have a meaningful, valuable relationship that results in a positive impact for closing the sale or losing it. An example of understanding this process may be illustrated by understanding how any organization sells as discussed in the following phases.
The organization progresses through the following nine phases:
- Approach – The selling organization creates a firm foundation for the entire sales force with the goal of helping them to help the customer when paths cross, etc.
- Identify – The selling organization creates a need in the marketplace, etc.
- Target – The selling organization tries to create a “hot prospect.” A hot prospect surfaces by contacting the selling organization, etc.
- Support – The selling organization provides value and information once a prospect/client has engaged with the selling organization. The selling organization supports the decision making process to possibly provide a solution by showing the value and the benefits. They address specific issues.
- Accept – Prospect / Client chooses a selling organization and the selling organization accepts the work. The selling organization should make sure it has the resources necessary to do the job right the first time before accepting the work.
- Commit – Customer agrees to terms and conditions set forth in the contract and signs the contract. The selling organization commits to fulfill the order as agreed. There may be a handoff to the customer service and fulfillment departments.
- Fulfill – The selling organization begins engaging internally & externally to create a solution. Activity begins to create, implement, or ship the product or service.
- Protect – The selling organization tracks the progress of the solution and leveraging success for future sales. Activities include gaining customer testimonials, performing surveys, following up, etc.
- Expand – The buying organization fully engrains the product/service into their organization and environment. The selling organization begins to work with the buying organization to find other areas that make sense to work together on. The selling organization thinks beyond the transactions of the selling process and becomes more focused on the buying organization's strategic needs.
It is extremely important for the sales professional to understand what phase the buying organization is in. This is because, the more synchronized the selling and buying phases are, the greater the chance of the sale. The nine phases may take one hour or take many years. Whatever the length of time in each phase, whatever the product or service, the selling organization and the sales professional is always in one of these nine phases and they are always focused on helping the buying organization's needs.
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The third component of the Commerce Cycle is the UPSA Marketing Cycle. The UPSA Marketing Cycle shows us the distinct functional phases that all marketing organizations should engage in to support the buying process. In this process, and throughout these phases, the marketing organization should be “Value Focused.” This means, understanding the value that each phase of the effort will bring to the buyer. A buyer will progress through the Marketing Cycle throughout the course of the buying relationship.
The UPSA Marketing Cycle views the profession of marketing as a separate but equal profession. The UPSA Marketing Cycle supports the UPSA Selling Cycle and UPSA Buying Cycle. The American Management Association (AMA) defines marketing as:
“The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.”
Because the marketing profession works with sales, in this section we outline the marketing phases within the marketing cycle. These phases mirror the buying phases within the commerce cycle. For every buying cycle action, there is an equal and opposite reaction. By synchronizing and coordinating the marketing efforts within the selling organization, a company has a better chance of competitively positioning for a win.
There are nine phases of the UPSA Marketing Cycle as shown below. Some phases are more important at different times. Marketing organizations are primarily results focused (the same as the buyer and the selling organizations). The success of the marketing organization in providing the necessary results will directly impact closing the sale or losing the sale.
- Analyze – The marketing organization analyzes the existing potential market. The marketing organization supports the selling efforts through statistical analysis of penetration, segmentation, demographics, firmagraphics, etc.
- Define – The marketing organization identifies a potential need in the marketplace. The marketing organization supports the selling efforts through identification of specific objectives that help achieve selling goals.
- Select – The marketing organization selects the criteria for a qualified prospect. The marketing organization supports the selling efforts through “transaction-focused” collateral and other initiatives that help drive revenue and get a response from the market.
- Promote – The marketing organization promotes the product based on the highest potential buying behavior exhibited by buyers in their corresponding Choose Phase. The marketing organization supports the selling efforts through the most appropriate pricing and incentives or promotions, as well as “trust building” through whitepapers, advertising etc
- Acquire – The marketing organization acquires transaction specific demographic and business data, mapping it back to the initial data gathered in the Select Phase. The marketing organization supports the selling efforts through necessary competitive intelligence, appropriate testimonials and other proof as necessary.
- Measure – The marketing organization documents the type of buying behavior displayed and what the measures of success are. The marketing organization supports the selling efforts through documentation and “building a case” for the return on investment payoffs, etc.
- Adjust – The marketing organization begins engaging internally & externally to correct for any errors in marketing process or document their success. The marketing organization supports the selling efforts by providing feedback to the selling organization and fulfillment organization on “delivering on the promise” of the selling process
- Reinforce – The marketing organization tracks the progress of the solution and leverages success to help future sales. The marketing organization supports the selling efforts through the creation of customer testimonials, surveys, follow up, etc.
- Support – The marketing organization supports the product lifecycle by being aware of the different stages of product maturity and determining necessary adjustments in the product/solution set. The marketing organization supports the selling efforts through creation of new products or services or upgrades that the market wants and needs, therefore creating the ability to sell more.
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Improving Buyer Focus