What is a purchase cycle and why is it important?

Introduction

The inspiration for this one came because I just happen to have worked on a couple of brands where the purchase decision process is normally quite complicated but has also been heavily influenced more recently by covid-related issues. 

Whether you own or work for a brand or you’re consulting for one, thinking about how consumers select to buy from all their available options stands you in good stead for better interpreting data and for planning marketing campaigns. 

What is a purchase cycle?

It’s the process for selecting a given product or service. If you take a bunch of individuals and ask them to map their journey to purchase, they’ll likely all tell you something slightly different. But ask enough people and group up the actions that they describe, and you’ll probably end up with something like this:

You may have more or fewer stages or apply different labels. That doesn’t really matter, what’s important is that the cycle is applicable to your business so it’s best to work with specific data rather than make assumptions. 

Of course, if you’re a business just starting out you may not yet have enough of your own data. The good news is that purchase cycles are usually heavily influenced by the type of product or service on offer, so there’s likely to be relevant data out there.

It’s worth making a few more points here. The first is that as a brand, a purchase cycle isn’t a process you impose on customers. Sure, you may be able to influence them to a degree with marketing and promo but generally, they’re in control. 

This cycle starts before they hit your site or enter your store. They may not know you’re an option. If not, that’s your job #1. A purchase cycle is not to be confused with your sales process. Ideally, that should reflect what you learn about the cycle. 

Even if you’re an ecommerce business, appreciate that consumers make decisions based on their online and offline experience of yours and other brands. If you’re only looking at clickable metrics, you’re applying too narrow a filter. 

Perhaps you are wondering what demonstrates that someone is at the “awareness” (or any other) stage? One well-used approach is simply to ask that question. Larger brands often conduct surveys to measure prompted and spontaneous awareness.

It’s expensive if statistically robust and representative and so not viable for many smaller brands. Brain-storm ways a consumer may experience your brand and try to think of something to measure for each. Group underneath the headings above. 

Why are purchase cycles important?

One big benefit is figuring out how long from start to finish consumers typically take to make a purchase from the moment they identify a need or desire. If it’s minutes or hours, your marketing strategy should be different vs if it’s weeks or months. 

With longer cycles you can tailor messaging to each stage and withhold the heavy sell for when they’re closer to a decision. If your product is complicated, pricey, or emotive, the purchase cycle is typically longer. Higher stakes, the longer they take.

It’s also handy if you know whether most your consumers will be at the same stage at the same time of (week/month/year) or if there’ll be people dropping in and out of market all the time. Think holidays and compare that to bread or milk. 

If demand is concentrated on a season focus the marketing budget just when consumers are starting their initial research and continue until demand wanes. If demand is unpredictable you need to hedge and market all the time, if you can. 

The middle stages are sometimes the least well understood because to an extent, once consumers are aware you exist, who cares what they do until they buy. Effort is focused on the first and final stages with responsibility split across departments. 

Yet Google’s research suggests that it’s exactly within this messy middle that as a brand you could win or lose a consumer. It’s worth a read. 

Finally, turning your attention to the middle and looking more deeply at who does not become a customer (when? why?) may provide you with valuable insight about your product or service, and/or the quality of your marketing. 

Wrapping it up

If you understand in detail how consumers make decisions about purchasing the product or service that you offer then you’re in a better position to market and promote to the right people, at the right time, in the right places. 

If you’ve got any questions about purchase cycles or ore generally about how you can use data to make smarter marketing decisions, drop me a line or give me a call

© Jo Gordon Consulting Ltd 2022