Customer Activity Cycle tells us what customers do
We can easily draw a generic Customer Activity Cycle that is a great basis for most B2B discussions. We can build on this later to discuss different industries, products, services and customer types.
The Brand Awareness Cycle is an important tool for understanding customer behaviour, but it is only part of the equation.
For my way of thinking, the Awareness Cycle on its own, is way too egoistic! It tells us how the customer discovers our company, informs herself about our products and is convinced that we should get her business. Which is cool if you’re “us”, but it’s not all you need if you’re the customer.
Similiar to a CRM (Customer Relationship Management) view of the world, the Awareness Cycle is an “inside-looking-out” view of what’s happening. You don’t believe me? Just look at the process diagrams for any of the major CRM systems. The logic is consistently that of “when the customer does A, then we do B and C or ocasionally even D”. We define how we react, when the customer does something that we expect – better: have planned – he or she will do. Then we go on to monitor whether the customer has responded properly to our action, which is where all the event handlers come in: “Send proposal and create follow-up task for 10 days later”
What does the customer actually do?
Well most likely – remember we’re talking industrial-type B2B here – he’s way too busy running his own business to particularly care about the responses required of him by our CRM system!
Without getting into the details of every possible B2B interaction – different industries, different products and services and different customer types – we can draw a fairly generic Customer Activity Cycle that provides an adequate basis for most B2B discussions.
The Customer plans and prepares
The customer spends just as much time and effort preparing to do business as we do! She needs to recognise the need for her own products and services and to define her business opportunity. She needs to define the problem that she wants to address and to develop the appropriate solution. For a wholesaler that might just involve selecting the right products and volumes to stock, for an OEM (Own Equipment Manufacturer – someone who uses our products as component parts of their own products) the problem definition might represent a time-consuming and costly research and development phase. The definition of the necessary purchasing framework for bought-in products is part of the preparation phase – and its successful negotiation may mean the difference between profit and loss for the venture!
The Customer has a business to run
For our OEM type customers, this will involve a production process with the supporting purchasing activities, which interest us most.
But at a generic level, these phases can be applied to all business: A wholesaler’s “production” is the logistics needed to keep the show on the road; for an End-User (someone using our products to support their infrastructure) the production process may be making cars or canning beans – but it too will have some purchasing infrastructure to ensure that it all runs smoothly.
The Customer has people in the field
Given that we’re talking B2B, it’s fairly safe to say that our customers themselves have field organisations, out there looking after the needs of their customers.
For some, the “field” team may be an in-house maintenance team, but the generalisation still holds true.
The generic Customer Activity Cycle
Pulling the high-level phases together, we can create a generic Customer Activity Cycle, which can be the basis for the remainder of this discussion.
More specific Customer Activity Cycles
The generic Customer Activity Cycle can be modified and enhanced as required.
For instance, as you progress with the analysis of the Customer Activity Cycle, you will need to add an appropriate level of detail to document your understanding of what exactly it is that the customer is doing in each phase.Customer Activity Cycle with additional detail.
For specific activities, you might find it useful to add an entirely new phase, which in turn can be documented to the required level of detail.
But no matter what line of business you’re engaged in, you’ll probably have the need to distinguish between various different types of customer (OEM, Wholesaler, End-User etc.). Some of these may be strategically more important than others, or it may simply be that the 80:20 rule applies – 80% of your revenue comes from just one of your five different customer types.
My bet, however, is that when you begin to examine the different customer types you will dicover huge differences between them, both in terms of the dynamics within the Activity Cycle and in the leverage that can be achieved by providing appropriate support in different phases of the respective activity cycles.
For instance, where an OEM customer will probably have made all 3rd party product decisions by the end of the R&D phase, an Installer type customer will be making the same decisions while repairing some equipment in the field. The “convinced” button might be pressed in the first case by some incredible technology advancement that you can offer, in the latter case it may simply be that you offered a better and quicker way to source a necessary replacement part.
More advantages of Customer Activity Cycle diagrams
Unlike the inside-looking-out viewpoint provided by CRM systems, the Customer Activity Cycle provides the outside-looking-in approach needed to build better B2B. It is only by examining the customer’s activities that we can gain an insight into how we can support his needs and develop a true relationship that delivers the oft-cited “win-win” benefits. The egoistic view of our B2B platform can be replaced by a customer-centric view.
I said earlier that the Awareness Cycle on its own is too egoistic. It needs the Customer Activity Cycle as the environment in which to operate. Only then does it have context – customer context.
(Brand) Awareness is everywhere!
Now we have a scenario where the customer is pursuing her activities to the benefit of her business, communicating with us where it makes sense and evaluating the interaction we provide in repetitive cycles of awareness. The model reflects the possibility of her being totally convinced on functionality and pricing, but becoming “no longer convinced” when we don’t, for instance, live up to our promised delivery times.
We’ll discuss these effects in more detail later, but first we’ll look at how Content – in the widest meaning of the word – can support the Customer Activity Cycle too.
Keep it Simple – 1
The Customer Activity Cycle (CAC) diagram, has the great advantage of being just that – a diagram! There is no complicated rule set or semantics that must be adhered to. When you create CACs, you create them to represent your view of the available knowledge. We’ll see later, how we can add all types of enriching information to the basic diagram to suit our analysis and documentation needs. And yet the diagram is simple – it’s simple to draw, simple to maintain and – most importantly – simple to read! If it gets too complicated, just break out into a separate diagram to show some specific detail.
[The only rule – more a sanity check – that I’d ask you to apply is that the diagram fits on a PowerPoint slide and that the minimum text size is 8pt for labels.]