how people really shop and a few marketing insights

Today people shop and buy differently thanks to the internet – unsurprising.  However when two landmark studies quantify the process of shopping,  some surprises that have big implications to marketing emerge. Let’s start with the old thinking to better understand what’s new.   (Will it be “Fun”?  Of course it will. ;)

BOTTOM-LINE: Marketers need to understand how people shop today and align their activities accordingly to be most effective. 

the traditional funnel

This outdated model was developed before the prevalence of the internet when there was a barrier to information. Consider: Consumer Reports was a trip to the library and advertising was actually considered somewhat trustworthy.

1 – A person will “recognize a need” and actively begin shopping.

2 – People start with a large number of potential brands in mind. Being in this “Top of Mind” group of brands is the pay-off for “branding advertising”.

3 – Next people enter into a consideration phase. Here they compare features…no make that benefits – and methodically subtract  brands in consideration until… This is when marketing pummels people with “push” advertising telling them why their brand is best…and it worked for a long time. 

4 – Eventually, people emerge with a decision and purchase .

McKinsey & Co.’s Consumer Decision Journey

2008 – 20,000 consumers – 5 industries – 3 continents

You have to love our friends at McKinsey & Company as they always go BIG. In this study, McKinsey illustrates exactly why the Traditional Funnel no longer applies and how marketing should purposefully address the different stages of the consumer decision journey. 

It begins with triggers that set people on the path of purchasing.  (There are huge ideas here for real estate… ;)

STAGE 1 – Initial Consideration. People start off with certain brands in mind. Interestingly, there are not that many brands included in this initial consideration set. (Ranking the highest was Autos at only 3.8 brands.) (Getting into the Initial Consideration set  is the pay-off for all that “branding advertising” marketers invest in. It seems wasted, until people are triggered and then remember you. However, this is only the beginning. If your marketing stops here  – OUCH!)

STAGE 2 – Active Evaluation. Here people add and subtract brands as they evaluate what they want.

People aren’t just starting with a fixed pool of brand options and then whittling it down from there. They are starting with a small net and then expanding it to consider more brand options.  (It’s in Active Evaluation that a new brand can enter in and knock an Initial Consideration competitor out of the running. If you’re not active in Stage 2…)

And to make things even more interesting, 67% of the information used in Active Evaluation involve consumer-driven marketing touchpoints (reviews, recommendations, past experiences, in-store interactions). Only 33% is company-driven. (So marketers would be well-advised to learn how to influence those consumer-driven touchpoints. Content marketing anyone? Social Media anyone? Experience Focus perhaps? Are you budgeting appropriately?)

STAGE 3 – Moment of Purchase. Ultimately, people emerge with a decision and purchase. It may be made on-line, in a store, or in a sales office.

STAGE 4 – Postpurchase Experience. After experiencing what they purchased, people will use the information to generate more consumer-driven information and the cycle continues.

Google’s Zero Moment of Truth.

2011 – 5,000 consumers – 12 industries – 1 continent

Rather than approach the purchasing decision journey from the consumer behavior perspective, Google look’s at the shopping dynamic through the lens of a marketing model by P&G.

social media – in real life…

Perhaps you  know someone who shuns social media,  but doesn’t really understand what it is they are rejecting.  Then there are those who recognize the various social media names – enjoy Facebook perhaps – but they are still a bit fuzzy on what people use the various channels for. They know something interesting is happening… but what is it?

 
This ‘fuzziness” about what people are really doing on  Facebook, Twitter, LinkedIn, Quora, Focus, YouTube, blogs and now Google+  isn’t limited to your mom.

Companies of all sizes jump into the social space and proceed to  “go against the grain with what  people are doing there”.  It’s like sitting down suddenly at a stranger’s dinner, bringing out a sales presentation for insurance and then later wondering why you didn’t get the result you wanted.

2 reasons to “get” how people use social media

1. Social media offers valuable tools that can  enhance your  life…not replace it.    It can open your world in ways that – inspire, teach, entertain.

When you do get involved, the thing that may surprise you is that in these very tech-driven spaces, most of the experiences feel quite “human”.  I say “most”  because there are people who will constantly try to sell you something, promise you’ll get “rich while eating pizza”  etc.

However, that noise quickly fades into the background as you can tune out- unfollow-unlike as you like, similar to “tivo’ing the commercials”.

2.  Social media can get you closer to customers to demonstrate a) who you are and b) why you are relevant.  Do this well and you will build valuable brand equity and grow revenue. Consider the recent survey by Forbes Insights that found on average Global Brand Executives now attribute 52% of their brand’s reputation to how “social” it is today.

This is about sitting down to a dinner you were invited to and being an enjoyable guest…who is asked back. Then eventually invited to parties.  Hopefully, lots of parties. (yes a metaphor for sales & recommendations) 

a candid take on what’s happening

The key objective in the graphic below is to illustrate what’s really going on online, so you can make an informed decision on where you want to spend time and how it may help you.  (click here for the pdf)

Key Takeaways for Marketers

For brands hoping to garner attention in the social space, build positive brand equity, and earn additional sales – a couple of key points:

1. Bring content to the table that fits with what people are really doing on that channel.
2. Mind the culture, be polite, be positive and above all be “human”.  Remember behind almost every word, sound & image is a real life breathing person.

Next Post: Part 2 “Homebuilder are Getting Social”  Stay tuned.