Customer Lifecycles


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published May 13, 2002

Much to their detriment, many businesses in B2B markets consider issues of consumer buying behavior theory irrelevant. While much of customer lifecycle theory originates in B2C marketing, it can be profitably mapped into B2B marketing and sales.

The basic sequence according to consumer buying behavior can be listed as follows: Goal Activation, Awareness, Attribute Learning, Benefit Prediction, Product or Service Choice, Experience and Learning, and Relationship Growth. The same process applies to B2B markets as well.

Goal Activation: Goal activation refers to the consumer identifying that their state of existence could be enhanced in reference to a goal state. Consumers either see an opportunity to raise their current state of satisfaction or are responding to a drop in their historical state of satisfaction. In consumer markets, people make purchases either because ice-cream will make them happier or they have to replace a blown-out tire. In business markets, the product or service might either enable the firm to capture increased profits or help them to deal with a process that is no longer working. Some sales literature refers to these buyers as being in either growth mode or trouble mode . When firms aren’t in either of these states, salespeople either attempt to make them uncomfortable or seek the opportunity to which they are apparently oblivious.

Awareness: After a consumer becomes aware that they can change their state of happiness or profitability, they then need to become aware of a possible solution to their problem. Fostering awareness is a core function of marketing but is often shared with the sales force as well. For consumer markets, awareness is sometimes stimulated with point-of-purchase displays, advertising, direct mail, and telemarketing. Business markets use many of the same tools: advertising, trade shows, direct mail, and telemarketing.

Attribute Learning and Benefit Prediction refers to consumers investigating a product or service. For consumer products, Attributes and Benefits might come from reading labels or hearing. It ‘s magically delicious a few thousand times. In hi-tech business markets, the same tools are used to communicate feature/benefit learning & and more. Features and Benefits are communicated in business markets using a variety of means: web sites, customer visits, technical sales, white papers, and user meetings, to name a few. I refer to this stage in the buying process as Consumer Investigation. As business people, our role is to guide and manage the Consumer Investigation process to lead the prospect to an obvious conclusion: Our product or service is the best for your situation.

Finally we get to Choice. This is where the sales exec should come in and behave as the hunter that she. The job is to close the deal whether it is in consumer markets or business markets. Choice will reflect both short term issues, such as instant gratification or getting rid of the sales person, and long term issues such as a better upgrade strategy or clearer relationship building process. When it is said that sales people own the customer in business markets and marketing owns the customer in consumer markets, they are referring to the process of Choice.

Experience and Learning: The consumer or business has purchased the product and is learning its value. For consumer products, the experience might be that people notice the motorcycle to be a BMW built for long rides and hot curves. For business products and services, consumers might learn the added features of Office XP that enable efficient management of contacts or performance of mail merges, or they might learn that the Customer Support Representatives (CSRs) are able to actually help the firm deal with a down system within 24 hours (crucial for mission critical systems). For B2B markets, experience and learning is an important element in gaining repeat purchases, cross-selling, or account referencabilty. In designing a customer management campaign, these aspects of customer management are critical to the longevity of the firm in thinly traded markets.

For the Awareness and Consumer Investigation processes, it is imperative that business leaders in both B2C and B2B markets consider cost efficiency and depth of message in relation to the medium of choice. It is also true that you can’t bull-rush the process. Businesses selling to businesses must treat the prospect or buying committee as professionals that will make an informed choice based upon the perceived economic benefits. While emotions enter the process, the emotional sale must match the logical sale to minimize cognitive dissonance that could delay a purchasing decision indefinitely. Likewise, the experience and learning aspects must match the sales message. Without matching the message with the deliverable, the installation team will learn that it has to match an impossible deadline for a project scope that is ill-defined, or the product team will learn that customers request an innumerable amount new features.

Consumer behavior isn’t just a function of consumer markets, nor is it a function of large volume markets alone. The knowledge and theory of consumer behavior is a domain to be utilized by all businesses in capturing revenues profitably.

The May Report, TECH BUSINESS BRIEFS, May 13, 2002

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.