The Steps in a Customer Journey

Previous literature has identified different ways to divide the steps of the buying decision process within a customer journey. Some researchers have divided the journey into five stages, including need recognition, information search, option evaluation, purchase decision and post-purchase evaluation (e.g., Kotler 2000; Puccinelli et al. 2009). Others view the journey as a three-step process, divided into the stages of pre-purchase, purchase and post-purchase (e.g., Neslin, Grewal, Leghorn, Shankar, Teerling & Thomas 2006; Lemon &

Verhoef 2016) This research will follow the latter approach (Figure 3), as it is simpler and it would not be very easy to define each step so specifically – however, all of the previous steps such as information search are included within this model as well. These three steps cover the current customer experience, but all of them are affected by the previous experiences the customers have (Verhoef, Neslin & Vroomen 2007). Each of these steps include multiple touch points where the company can try to convince the customer on the benefits of their product. These touchpoints will be discussed in depth later.

Figure 3: Purchase process (e.g., Neslin et al. 2006)

Pre-purchase stage is the first step of the model. It includes all interactions customers have with the brand before making a purchase. As mentioned earlier, the pre-purchase stage does

not include everything in the customers past, but rather everything that happens between need recognition and a purchase. Even though most of the literature uses the word “need”, there are also different motivations to make a purchase, such as wants and wishes (Chisnall 1997). The awareness for a problem can rise from internal or external stimulation and it can be very impulsive or the start of a long process (Puusa, Reijonen, Juuti & Laukkanen 2015).

The B2B purchase process is typically longer than a B2C process and more time is spent on researching and evaluating information (Hines 2017).

It has been recognized that there are two principal ways in which potential customers gather information – passive and active search, which are explained by Kotler (2000) as follows.

Passive information search refers to information staying in consumers’ minds subconsciously, for example from repetitive advertisements through social media. Active information search refers to the consumer looking for information about the product or service. These days, one of the most popular ways to look for information is through the internet and more specifically the company’s website (Gupta 2004). However, as the purchase gets bigger and requires more commitment, real stories and positive experiences from past customers become increasingly important, as they help to create a sense of trust between the buyer and the company (Schwager & Meyer 2007). The study by CEB Global (2018) shows that B2B buyers are actively looking for information not only from online and social media sources, but through their own networks. In addition, there are a lot of factors that affect the process besides the information gathered about the product or service.

Demographical factors such as age or gender and motivational factors affect the buyer, since each person looks at the marketing messages they receive through their own past experiences and personal motives (Puusa et al. 2015).

Previous research has suggested some tools and perspectives for companies to identify their customers’ wants and needs. One of them is buyer personas, which represents an ideal customer for the company based on data gathered from the market. This approach focuses on creating a detailed description about the typical buyer, and their behaviour patterns, motivations, and goals (Kusinitz 2014). Another tool is a “jobs-to-be-done” point-of-view, where the focus is on different situations and problems that arise in the customers lives (Christensen, Cook & Hall 2005). These help the companies to map what their customers’

needs are and respond to that need with their marketing and sales messages and their offering.

When customers have either actively or passively gathered information about a product or a service, they typically compare it to other similar offerings and look for differentiating factors. It has been found that B2B buyers typically start looking for information with a more generic search, instead of focusing on one company from the beginning (Hines 2017). In their own marketing actions, companies pursue to highlight the factors that would be important for a specific consumer and differentiate them from others (Rust, Lemon &

Zeithaml 2014). According to Rust et al. (2014), these factors could be for example quality, price or brand. At this point, the buyer typically considers the strengths and weaknesses of each option.

In a SaaS-context this stage could already include some contact with the company, such as meetings with a salesperson or a short demonstration of the features of the software. It is likely that the company already has some software or practice in place that the new software would replace, so they are comparing the offering with their existing solutions. However, it would be most likely at the end of the pre-purchase stage, since it has been found that the average B2B customer completes over half of the purchase decision-making process before engaging with the sales directly (CEB Global 2018). In today’s increasingly digital environment, there is a great deal of information research done prior to making any contact with the company, and the buyers take their time for this stage. Not only are they comparing the software, but they are also trying to define the problem they have and map out their own needs for the new solution (Knapp 2018). The customers’ first interest is not in what the product does, but what can they do with the product and how will it benefit them (Grönroos 2008).

Purchase stage is the next step of the model. At this point, the customer has defined their own needs and gathered information about the product or service enough to make a purchase decision. There are roughly three types of purchase decisions: trial purchases, repeat purchases and long-term commitment purchases (Schiffman, Kanuk & Hansen 2012). A trial purchase of a product could mean buying a smaller amount of it than usual, and a trial of a service could mean buying it for a shorter time than usual. However, it is worth mentioning

that this step might also lead to choosing another product or service and no purchase is made.

To avoid this, companies should try to answer all of the buyer’s questions and offer testimonials from previous satisfied customers through different marketing actions. Another good tactic could be to offer comparisons between the company and its competitors to make the decision easier for the buyer (Knapp 2018).

In a SaaS-context, the most typical first purchase would a free trial of the software. At this point, the buyer could get limited access to the features of the software to test it for example for a month. After the free trial, the buyer needs to make another purchase decision. Even though SaaS-products are typically billed monthly they might require some commitment to the product, for example, a three-month term of notice. Therefore, they could be categorized as long-term commitment purchases instead of repeat purchases: the payments continue until the buyer decides to unsubscribe the service.

When a customer moves from one experience to another, for example, a free trial user decides to subscribe to the service and become a paying user, it is called a conversion (Fry 2019). At this conversion stage, the most important thing for the company should be to make the purchasing and the transition to using the new software as smooth as possible without any roadblocks. The software should be very quick and easy to take into use without a heavy set-up process. Typically, you can do the whole process online and the website leading to the purchase of the software should be easy to navigate. If the software is complex, it might be a good idea to offer training for the buyer and provide resources around implementation planning (Knapp 2018). Marketing actions such as offering useful materials and guides for the buyer are an important part of creating a good experience too.

Post-purchase stage is the last step of the model. Even though the purchase has been made, it is very important that the customer feels satisfied afterwards and does not feel deceived.

The idea the buyer has about the service and product should be based on reality. Especially with bigger purchases the buyer can feel very insecure and is looking for information to support their decision. Therefore, the company should provide this information with post-purchase marketing. If the product is complex, it might be necessary for the company to also provide set-up help and customer service if the customer runs into a problem. If the buyer feels dissatisfied with the product or service, it is most likely they will try to find another

alternative. It is likely they might spread the information about a bad experience and therefore hurt the brand-image of the company. Moreover, this works the other way around too, as happy customers give references to others. Customer satisfaction has been conceptualized as a result of comparison between customer expectations and the actual delivered performance.

Schiffman et al. (2012) suggest that there are three possible outcomes in this post-purchase evaluation, which are dissatisfaction, neutral feeling and satisfaction depending on if the company’s performance meets the buyer’s expectations. This model can be seen in Figure 4. If the performance is worse than the expectations, it leads to dissatisfaction. What is interesting in Schiffman’s model, is that met expectations only result in a neutral feeling, and the performance should actually exceed expectations in order to create a truly satisfied feeling. A typical metric used to measure customer satisfaction in the SaaS-business is an

“NPS”, which stands for Net Promoter Score, created by Frederick Reichheld already in 2003. The customer is asked to rate their willingness to recommend the service to their friend or a colleague on a scale from 1 to 10, where 1 stands for very unlikely and 10 very likely.

How these answers are categorised is very similar to Schiffman’s theory; customers who give scores 0-6 are detractors, the ones who give 7-8 are neutral and only the customers who give a 9 or a 10 are considered promoters. The goal is to get as many customers as possible into the promoter -category. As a conclusion, the product or service should be better than the customer thinks beforehand in order to get satisfied and loyal customers.

Figure 4: Outcomes of a post-purchase evaluation (Schiffman et al. 2012)

The NPS-score is one of the key metrics that SaaS-businesses follow in their operations to measure their success. As the model suggests, the company strives to exceed customers’

expectations in order to get satisfied customers, who are therefore likely to stay as customers and give good referrals on the software. Data on customer satisfaction is gathered both from new customers regarding the purchase journey and existing customers regarding satisfaction with the software itself, its implementation and customer service if it has been needed. What also affects the customer’s level of satisfaction, especially with software purchases, is whether they know how to use it correctly and utilize it in the best way possible. This is referred to as value co-creation, which means customers create value for themselves when using the service. In order to fully benefit from the software, they have to have the skills and resources required for this, and the software provider has a big role in this implementation and education stage (Grönroos 2008)