The industrial buy cycle has been around for as long as products have been bought and sold, although recent shifts in buyer behavior mean that marketers must pay greater attention to aligning their marketing with their customers’ buying processes.
GlobalSpec is writing a two-part article series to help you better understand the importance of the industrial buy cycle. This month we will explain the four stages of the buy cycle and what’s changed about the way buyers move the four stages. Next month, we will write about the implications the industrial buy cycle has for marketers and the programs you invest in to reach buyers.
You will also be interested in GlobalSpec’s most recent white paper, “Understanding the Industrial Buy Cycle: How to Align Your Marketing with Your Customers’ Buying Process.” You can download the white paper here.
The Industrial Buy Cycle: A Four-Stage Process
The industrial buy cycle consists of four stages that buyers pass through on their way to making a purchase decision:
- Needs Awareness: This is when buyers first recognize the need to find a product or service to fulfill the requirements of a design project or task. At this point, buyers often don’t know what specific product will meet their needs; therefore, they move on to stage two.
- Research: Now buyers begin an investigation into what’s out there in the marketplace and which vendors potentially offer a product or service to meet their needs. This research phase represents their first investigation of the market.
- Consideration & Comparison: Now the narrowing down begins. Buyers have discovered potential vendors and products and begin weeding out those that don’t meet their needs for one reason or another: not quite the right product, pricing issues, not enough information available from the vendor, not comfortable with the way the vendor represents themselves or their products, etc. At the end of the Consideration & Comparison stage, buyers have a short list of final candidates they might do business with.
- Procurement: This stage represents the final buying decision. Buyers may initiate the purchase or recommend several products to the purchasing department which makes the final purchasing decision.
Characteristics of the Industrial Buy Cycle
The industrial buy cycle, which is typically a methodical and deliberate process, is often lengthy, complex, and includes multiple decision makers. The time between the Needs Awareness stage and the Procurement stage can be less than one month or as long as nine months or more, according to the GlobalSpec Industrial Buy Cycle Survey. As a general rule, the length of time increases as the dollar amount of the purchase and the number of decision makers increase. 63% of purchases under $1,000 involves just one decision maker, while only 2% of purchases over $10,000 involves just one decision maker, as reported in the GlobalSpec survey. To complicate matters further, each decision maker has their own point of view and needs when it comes to contributing to a purchasing decision.
How the Buy Cycle has Changed
The four stages of the industrial buy cycle have remained constant over time. What’s changed, however, is how buyers go through the four stages. Today, online methods dominate the four stages of the buy cycle. Buyers conduct research on the Internet, contact suppliers and request quotes online, compare supplier offerings using content found online, and even submit purchase orders online.
Buyers use search engines, online catalogs, supplier Web sites, portal sites, and GlobalSpec.com. They gather data, review product specifications, view drawings and more—all online. They often bookmark Web pages, download content, and print out information to share with other decision makers. Even traditional sales through offline channels such as purchase orders often are the result of buyers using online methods to move through the stages of the buy cycle.
If you are the supplier that is eventually selected by a buyer, your company is exposed online to the buyer many times from the beginning to the end of the buy cycle. Your company may have first become visible to the buyer through an Internet search, exposure to your online catalog, a banner on an industrial Web site, an advertisement in an e-newsletter, or a number of other ways.
The most important idea is that you get found early in the buy cycle, during the Needs Awareness and Research stages. If you don’t, you’ll never be on the buyer’s radar when they enter later stages that are closer to the final buying decision.
Depending on their stage in the buy cycle, buyers use different information online sources, a fact which has implications for you as a marketer and where you invest your marketing resources. Next month, we’ll cover how to best align your marketing programs with your customers’ buy cycle behavior.
Until then, please click here to download your copy of the white paper “Understanding the Industrial Buy Cycle: How to Align Your Marketing with Your Customers’ Buying Process.”