Author: Chris Rodowicz | Reading Time: 8-9 minutes
In my last article I explored the concept of customer Buying Styles. I explained that there are 3 Buying Styles customers will self-categorise into. They do this as a function of how well they understand the value of your product or service to them before they engage with you. This article explains the second part of this theory. It’s called the customer Buying Process.
The Buying Styles help you understand the messaging that you’ll need when engaging with the actual customer people. If you want more information on this subject then please follow this link to download our eBook titled “Accelerate your sales cycles by understanding HOW your customers buy”. It explains step by step what you can start doing today to align with your customers so you can win more business easier.
Now back to this topic. The Buying Process is how the customer company itself is going to engage with you, the supplier. It outlines the things that are going to happen in order for it to get to a transaction. Once you understand that you’ll start to see that Buying Styles and Buying Process work together. This gives you a really clear understanding as to how you need to be aligned with and interacting with your customers.
The Buying Process can be described using the acronym, IMPACT. IMPACT was invented by Dominic Rowsell, global strategy advisor and author of “Why Killer Products Don’t Sell”. There are six phases and each letter describes one phase.
Now here’s a big statement:
IMPACT describes how every company purchases every product or service.
It is predictable in exactly the same way as Buying Styles are. IMPACT explains what activities the company will go through in order for a transaction to take place.
What IMPACT is not
IMPACT is not a procurement process in the way that our sales methodology thinks of it. In fact IMPACT is the series of events that have to happen in order for a procurement process to even be considered. So the majority of IMPACT happens ‘upstream’ or before your typical procurement processes start. An important thing to mention is that a significant number of sales methodologies and sales training focus on interacting with procurement processes. I am not trying to replace that. I think that’s extremely important. But there is a lot you can be preparing and doing before your deal gets anywhere near procurement people.
Think of it like this. The typical procurement process kicks off once a decision has been made to buy. IMPACT depicts the process of how that decision gets made. The reality is that you have very little or no influence on procurement. Whereas if you understand IMPACT, you can influence the outcome to your benefit and the resulting procurement process will be with you.
What is IMPACT?
IMPACT consists of 6 phases.
I stands for Identify or Idea. This is the phase where the first idea pops up in a company to actually do or change something. The idea can come from anywhere, from water cooler conversations, social media, customer feedback, a strategic brainstorm session, from a consultant or even a supplier. Regardless of its origin there is always at the genesis of any procurement that happens down the line an idea that has come from somewhere. It has been picked up and seen as way of contributing to either increasing the revenue or decreasing the cost of that company.
The 2nd phase in IMPACT is M and this stands for Mentor. A mentor is someone in a company who is sufficiently senior to be able to take an idea and conduct a secret evaluation on it. They may have a few people who’ve got an interest in the idea who will conduct the evaluation. They’ll research on the web and internally. The aim being to flesh out the idea a little further. So if it’s an idea for a new product, they will have a look at the market, what other people are doing in this area? Can we develop or build it? Do we have the capability? Is there a market? Could we sell it? Just some rough ideas about how it might work. Or if it were an internal process improvement they’d look at how they do things today and what change would have to occur.
Whatever the idea is, this is a high level analysis only. Important point is that this is not for general consumption within the business. It’s kept within the small team working with the Mentor to try to understand whether it’s even worth pushing forward with or not. So as a supplier, unless you planted the Idea, you are very unlikely to be aware of this at all.
Final point is that only a small percentage of ideas get Mentored, and equally the majority will never go any further.
P stands for Position. If after the initial evaluation the Mentor considers this worth pursuing then they need a Project sponsor in order to Position the idea in the business. The sponsor needs to be sufficiently senior to both have access to budget and enough political clout to shepherd the idea forward. They will look at the politics, the players in the business that could derail or help move forward.
Don’t underestimate the importance of this step, particularly in a big organisation. And note that it is possible sometimes that the Mentor and the sponsor be the same person but performing different roles.
A stands for Assess. Assuming a sponsor buys into this they will initiate the Assess phase. This is where a more a broader and more formal due diligence will happen. An internal team is put together to conduct this and looks at SWOT analyses, maybe they issue an RFI (request for information) to the market where different suppliers are approached as an info gathering exercise. As a supplier you may get some visibility here as a respondent to the RFI.
The main outcome of the Assess phase is the feasibility assessment which addresses the main issues such as budget, feasibility, timeframe, ROI etc.
C stands for Case and is the business case that is the outcome of the a successful A phase. It is often the first time that you as the supplier are aware of this potential project. If you recall what I wrote earlier, this is where you would have normally engaged their procurement process. That’s because this is the stage where any request for tender (RFP) documents will be released. This is the first time that there is a high degree of certainty that a transaction is going to take place.
So in the Case phase there will be the presentations, beauty parades, proposals, demos, etc and this is where all your prior sales training kicks in!
T stands for Transaction and is where the negotiations, best and final offers, contract discussions and actual procurement happens. Obviously as in all the other phases, however as we all know there is no guarantee that the transaction will complete.
Let’s summarise IMPACT – the customer Buying Process. It is the set of activities that have to take place in order for a procurement of something to happen in a business. Most of it happens prior to a procurement process and therefore most suppliers aren’t aware of it.
I – Identify – where the idea starts, its origin is not important, it could come from within or outside the business, 100’s of ideas will not even get past this point.
M – Mentor – where a person with sufficient seniority takes the idea and runs with it. They conduct a secret high level evaluation, possibly with a small cross functional project team.
P – Position – once the Mentor has validated that the idea is worth pursuing, they go in search of a sponsor. The sponsor positions this initiative within the business. Department heads become aware of it. Importantly the sponsor has access to budget.
A – Assess – this is the internal Assessment or feasibility study, financed if required by the sponsor. It is now internally ‘public’ and touches all areas affected by the potential idea both organisational and financial. If the company wishes external market feedback they may issue RFIs.
C – Case – having got to this phase it is most likely this idea will come to reality in some form. There is a quantifiable and valid business case that has been accepted by the business. Funding is in place and internal planning is happening. An RFP is released if that is what they do. Certainly some invitation to bid will have gone out to potential suppliers.
T- Transact – is the actual transaction including all of the contract negotiations on price and legals etc.
At each phase the majority of ideas or projects will not make it to the next phase. This is the natural process of elimination so that companies invest in only the ‘ideas’ with the highest chance of success.
Now I made the point earlier that every company goes through IMPACT but they do not do it every time.
To be clear, not every single procurement goes through this process. But at some point all products go through this because they were once new and their value unknown.
I hope this is making sense to you. For the rest of this article to make sense you need to have read my former article on Buying Styles, you can read it here.
Now if you read my previous article you may be thinking that customer Buying Styles fit in here somehow. That’s because I have alluded to product maturity. So a new product would have to go through this whole IMPACT process whereby as it matures it moves toward just being a transaction.
It turns out that we can map customer Buying Styles onto IMPACT. That gives us a coherent, complete picture to understand our customers.
This theory then when put together, is the blueprint for understanding how you should be engaging with your customers with the minimum of friction for the maximum return.
Mapping Buying Styles onto IMPACT
Understanding how Buying Styles map onto IMPACT will show you how to engage both at a personal level with the people. And also at a business level with your customer companies themselves. I am going to approach this from right to left so starting at T and finishing at I.
VO maps onto T
The Value Offered or VO Buying Style means that the everything is very well understood. The problem, the solution, the products available, the suppliers. It is just about price, availability and delivery. If you diagnose your market as having VO customers then they will engage with you at T.
VA maps onto C
In Value Added or VA, the customer understands the problem or opportunity. However, they still need some help to understand supplier differentiation and which solution will best fit their specific needs. When I went through IMPACT you will remember I mentioned RFPs, or some kind of process to meet with number of suppliers for formal presentations, that was at C or Case. So VA maps onto C.
Now you still have 4 letters left and only one Buying Style. Remember we use Buying Styles to diagnose our customers with 1 simple question: before we engage, do they understand the problem or opportunity and therefore value of a product/service to them?
If answer is Yes it is either VO or VA. However, If the answer is no, the answer is Value Created or VC. So where does VC fit with IMPACT?
The next letter is A, Assess, it can’t be there as the customer is assessing the value, so they’ve already begun to understand the problem/opp. The next letter is P, it can’t be there for the same reason.
VC maps onto M and I
The next 2 letters are M and I, and this is where the idea is formed, so either looking at or identifying the problem/opportunity. So VC maps onto I and / or M. I being the germ of the idea that M is starting to look at it with a Mentor.
- You now understand how Buying Styles and IMPACT fit together
- Buying Styles let us diagnose our markets and structure our messaging accordingly
- IMPACT lets us understand the customer activities involved at different stages in order to buy
How is this valuable?
The typical reaction to slowing sales is to increase demand generation and sales activity, doing more of what you do now. Unfortunately this frequently doesn’t work. You can now diagnose your sales pipeline using Buying Styles and mapping customers onto IMPACT. Being able to diagnose your sales pipeline this way gives you much better insight into your sales forecasting. Now you can ‘qualify’ each customer in terms of IMPACT.
Better qualification means a more accurate and reliable sales performance.
So now you have a blueprint of how to engage with your customers. This allows you to better manage your pipeline and focus resources confidently on each sale knowing what you need to do to progress them to transaction. This understanding also gives you clear pointers on where to invest in your business and as importantly where you should not. Is it your sales team, digital marketing, customer journey, fulfilment, website, ecommerce or even which markets to target?
You can also use this structure when designing your marketing and sales processes and potentially for each sales engagement depending on transaction size.
Where do I start?
For every customer engagement the first thing you should be doing is confirming what Buying Style they exhibit. This will then tell you where they are in their journey, IMPACT. Then you understand what they’ve done so far and what they still need to succeed at each stage.
Next you align your ‘Sales Style’ to their Buying Style to gain trust and build rapport. You achieve this by giving them the information and support they need at the right time to progress ultimately to T and doing business with you.
Want to know more?
For more information on how Buying Styles and IMPACT can accelerate your sales cycles and drive growth check out Solving the Customer Mystery. It’s a self-paced exercise that you undertake with your growth team to implement all that has been outlined here and more into your business for achieving reliable, sustainable growth. And best of all you can try if for free.