How consumers make decisions in 2019
In a digital age where the abundance of choice overwhelms consumers, there are two activities that better than other trigger initial consideration in the consumer journey. Innovation and User Experience have sailed up to become the two most important activities to drive growth and represent primary drivers for differentiation and consumer loyalty in an overall more cost-effective process.
For all brands, the ultimate goal is to motivate their customers to make a purchase. What motivates them to buy changes over time, with trends and the development of new technology. It is therefore in the interest of companies to continuously transform their offers to new and meaningful solutions to remain relevant in the mind of the consumers.
In the past decades, marketers have used the traditional marketing funnel to motivate or ‘push’ the consumers forward, and in that relied on marketing to lead the way in to new markets. This has been done in stages. The customers enter the funnel when becoming aware of the product through ad campaigns or other marketing channels. If they manage to craft a convincing message that sticks, the customer enter the consideration phase together with other similar brands in the category. In this phase brands can develop the relationship and transform the consideration into an intent to buy. If all key indicators are ticked off the consumer will make the purchase. If the customer was happy with the initial product experience and other aspects of its use, they would repurchase and become loyal customers. That was the game we played. A one sided communication.
What we have discovered is that there are some major flaws with this model.
- Only 13% of our consumer are loyal driven. The rest of us are still shopping after a purchase. 58% switch brands from one cycle to the other.
- As we move along the consideration phase we increase the brands we can consider to buy. Opposite to the traditional funnel.
- The battleground to win is in the initial consideration phase. 2/3 of the time we purchases the brands in our original consideration set.
In an increasingly digital age we follow a very different consumer journey. We have seen the emergence of an increasingly informed consumer. Therefore we need to change our perception of the funnel to something more appropriate and relatable and in dialogue with the consumer.
Instead we refer to the customer journey as a circular journey with four primary phases representing potential battlegrounds where marketers can win or lose: Consideration, Evaluation, Closure and Post-purchase, when consumers experience them with initial consideration on one side and final purchase on the other.
The changing behaviour can be traced back to the digital tools readily available in our hand but also by the overwhelming selection of offers the consumers are exposed to on a daily basis. This has triggered some rational behaviours simplifying the decisions we make in our daily life.
Evaluation, Moment of Purchase and Post-purchase Experience
As humans have a natural shortfall in processing power and we constantly look for ways to simplify the evaluation. Because of our brains natural elimination process we start with a pre-established set of brands in each product category. This can be applied to most categories. The customer then begins an active evaluation process, where they evaluate the pros and cons of each option and continue to “pull in” the information they need in order to convince themselves it’s worth their hard earned dollars.
Throughout this journey we read up on reviews, take note of recommendations, rely on friends, compare with competitors and abstracting the data needed to make an informed decision. In this phase the set of brands considered can double from the initial set.
The interesting piece of insight is that when we finally make the selection and move to a purchase, researcher have noted that in 2 out of 3 occasions the consumer end up buying a brand from the pre-established list already set in our mind at the start. This happens in almost all market categories and it leads us to conclude that if we want our brand to grab market shares we need to find ways to be included in that so important initial consideration set.
After we made the purchase we enter the second part of the loop, post-purchase or the user experience journey. That is when we start interaction with the purchase, unboxing, installing, using, calling for support, repairing and finally discarding the product in a way we can hope is sustainable. It is here during post-purchase phase we gather user experience that dictate whether we will return and buy it again.
It is an ongoing loop – the customer will always reevaluate their decision to continue using a brand based on the user experience and in parallel to the new innovation offered by other brands strong enough to compete with the initial consideration set.
Pure awareness is far from enough to be considered and Innovation will always be the better tool to trigger consideration.
The main conclusion we draw from this is that awareness is far from enough to win unless consumers are actively shopping. What they need is a tangible feedback in its use or a strong brand reputation, both driven by innovation or a positive user expereince. If exposed in any other situation much of that exposure does not trigger consideration.
Innovation on the other hand is a far more effective tool as it can trigger initial consideration if/when directed to the right and early segment. Not only to trigger an entry into the pre-selected few but also to provide differentiation in the offer and in providing a superior user experience fulfilling the unaddressed needs to the consumer.
According to a survey conducted by Chicago-based marketing research firm, 84% of consumers say it is somewhat or very important that the company they purchase from is innovative. 51% says they have bought a product without fully understanding what it did or how it worked because they felt or heard it was cool. 34% agree that they like owning products that make them looking innovative to others.
I hope that more companies will start to understand the importance of innovation and user experience so they can build strong brands and lasting brand strategies that will take advantage of this new understanding of consumers mindsets. It is only then when they know that brands can’t have one-dimensional communications and that you have to move consumers from one loop to another and then keep them there to succeed.
By Johan M Persson
Founder of C’monde Studios