You’ve got what your customers need. But do you know what they want?
Without a clear understanding of buyer behavior—what they want, where they are in the sales funnel, and what they base their purchasing decisions on—your company could fail to seal the deal. By better understanding buyer behavior overall, as well as different behaviors and expectations at each point in the sales funnel, your company can determine how best to generate leads from small to midsize businesses (SMBs) and turn them into customers.
Let’s take a moment to review each stage of the sales funnel by walking one of your customers through it:
6 stages of the sales funnel
This is the company as it normally operates. At this point, leadership hasn’t identified a specific challenge they need to resolve.
Here, the company notices a challenge that needs addressing, but may not have or understand the tools or techniques needed to solve it.
The SMB must now figure out how to address the problem, and business leaders are actively researching for the best solution.
The company begins eliminating options that don’t meet its criteria for consideration. This is when buyers need specific information on how a product or service meets their needs.
This is the moment your lead becomes a consumer. They’ve made a selection and begin to focus on the details of the purchase and implementation.
The SMB implements your software, and you form a relationship to maintain them as a customer. This is when you can help buyers get the most value out of their investment.
What do buyers want at each stage of the funnel?
It can take around 20 months to move through the sales funnel. So what happens to your buyers along the way?
Let’s go through the top, middle, and bottom of the funnel, and discuss what Capterra learned from its 2019 survey of 488 SMBs in the U.S., France, Germany, Spain, and Canada to understand their software buying behavior. We’ll also discuss what you can do with this information.
Top of the funnel: Influence buyer expectations
At the top of the funnel, understanding customer budgets and bolstering your reviews are key to hooking potential leads. The top of the funnel refers to the awareness and interest stages.
How money comes into play at the top of the funnel
Flexible budgets can prove to be incredibly valuable, but only 18% of SMBs use one when purchasing software.
Nearly half of the remaining 82% of SMBs approach their tech and software needs with a set budget. The other half determine their budget sometime during the interest and selection stages.
What you should do:
As leads move down the funnel, talk to them about their budgetary practices. You’ll be able to get a better understanding as to whether or not they’ve already decided on their budget or when they will settle on that figure.
Once you’ve done that, you should know whether or not you can upsell them on extra features.
Something to keep in mind though is that you shouldn’t necessarily worry if your product is more expensive than their budget. 27% of businesses are willing to exceed their budget if it’s for the sake of business-critical features that your product might offer.
How reviews come into the play at the top of the funnel
Whether they’re on aggregate sites or provided within directories (such as Capterra’s human resources software directory), companies find reviews to be an invaluable resource when searching for software.
In fact, 37% of respondents said that they turn to reviews, either on those aggregate sources or social media, as their first source of information as they begin their buyer’s journey.
What you should do:
This means that you have to go beyond collecting reviews for your products. You need to collect reviews that appear on specific sites and directories that your leads frequent.
It’s important to remember that many SMBs don’t begin their searches in directories or reviews sets, but instead kick things off with general web or social media research. Make sure that all your content across channels has strong SEO and that your social media presence is extensive so you can stand out when your leads begin searching.
Middle of the funnel: Use referrals and free demos along with influencer marketing
Marketing your free trials or demonstrations, as well as using brand ambassadors and influencers will help you stand out as the competition starts to drop around you. (The middle of the funnel focuses on selection specifically.)
How money comes into play in the middle of the funnel
According to survey respondents, about 41% of companies set their software budgets toward the middle of the funnel as they come to understand what the average cost of various software solutions are.
This makes sense. Two of the biggest internal barriers for businesses when deciding on software are budget-related concerns. The first is that the cost of the software will exceed their anticipated budget and the second concern is that the project won’t provide them with a strong enough return on investment (ROI).
What you should do:
Offer your leads a free demonstration or a free trial of your software. This will build trust with them while also showing what the core features of your product are able to accomplish for their business. Your marketing materials should focus on breaking down the costs and what each of your leads has to gain from specific features.
How reviews come into play in the middle of the funnel
Though not all buyers resort to reviews as their first source of information, on average, software buyers will spend a third of the buyer’s journey looking at reviews.
When asked to list the most influential sources of reviews and recommendations when evaluating vendors, 45% cited peer recommendations, 51% cited influencer reviews, and 43% cited user reviews.
What you should do:
Social media might be seen as a top-of-funnel game, but it can make a serious impact on your middle-of-the-funnel leads. Peer recommendations are just code for “deploy a brand ambassador program,” since they are essentially peers of your leads who are passionate about your product. A good way to make that even more impactful is by offering referral perks to both your ambassadors and the leads they guide further down your funnel.
Meanwhile, an influencer strategy is even easier to implement and could have a strong impact on your marketing success.
Build strong ties with your leads/customers that are rooted in trust at the bottom of the funnel
Don’t make any sudden changes as your leads approach conversion, and continue engaging them long after they’ve converted in order to ensure success at the bottom of the funnel. The bottom of the funnel refers to the purchase and post-funnel stages.
How money comes into play at the bottom of the funnel
When it comes down to it, money matters. But just how much it matters can be surprising.
Respondents were asked to rate the top three most important factors when it came to selecting their vendor. Amongst a wide array of various factors, those related to the budget were among the most frequently cited (including 33% citing value proposition and another 16% referencing ROI metrics).
Forty-six percent of respondents said they would disqualify a vendor simply for not having prices in line with their expectations.
What you should do:
This late in the game, don’t try to upsell. Instead, focus on how what you’ve discussed with your leads will directly benefit their business. Come with data that points to the success of your customers who match the same persona as these specific leads.
Later, you can discuss the option of upgrading, but right now, 16.8% of businesses are looking at your product and its features as the most important factor, and 11.9% are looking at value proposition, so highlighting how your features make the purchase worth it will be your best play.
How reviews come into play at the bottom of the funnel
Thirty-four percent of respondents say that negative user reviews were one of the main reasons they would disqualify a product at the end of the funnel.
On the other side, when asked to rank the three most important factors that went into the selection of their final choice of vendor, 19% cited peer recommendations and 26% referenced user reviews in their list.
What you should do:
Don’t let negative reviews go unanswered. Not only will responding to negative reviews increase your engagement, but it will show that you’re trustworthy and attentive. You can use this opportunity to help you plan out your next moves in terms of business strategy.
Once you engage with dissatisfied customers, attempt to address their concerns, and deepen that relationship, you can then request that they update their review.
Finally, use this engagement as an opportunity to check in on how well your product is treating your customers. If you don’t want to risk losing the customers you fought so hard to convert, this is the most important factor that has been cited when maintaining an ongoing relationship with a vendor.
Key takeaways for 2020
- Your clients are changing at every given point in the funnel. Their goal of fixing whatever problem they’re facing is static. But how they approach this process, and what matters to them along the way, is not.
- There are trends—from reviews sites and directories to budgetary trends—but at the end of the day, making sure that any concern that your leads have is addressed—visibly and carefully—is the most important thing you can do.
2019 Small-Business Software Buying Trends Survey Methodology
Results presented are based on a Gartner study to understand software buying behaviors of small- and medium-sized business owners in the past twelve months.
The primary research was conducted online during September to October 2019 among 488 respondents in US, Canada, Germany, France and Spain.
Companies were screened for number of employees and revenue in 2018 fiscal year to arrive at Small and Medium Businesses. They were also required to have purchased at least one software for USD 5,000 or more in the immediate past twelve months.
Respondents were required to be at least office managers, influencing software purchase decisions in their organizations.
The study was developed collaboratively by Gartner Analysts and the Primary Research Team who follow Digital Markets.
Disclaimer: Results do not represent “global” findings or the market as a whole but reflect the sentiment of the respondents and companies surveyed.