New Consumer Decision Journey and Opportunities

I have written several articles regarding to new customer era, digital transformation, telco industry readiness for digital era. Nowadays my favourite topic is about personalisation or in other words 1–1 marketing.

I would like to thank Dear Don Peppers which introduced one-to-one marketing term very early, in 1993, The One to One Future: Building Relationships One Customer at a Time. Although it has been written in 1993, Don Peppers and Martha Rogers showed us how the marketing will evolve for new decade.

As mentioned in the book, the mass marketing era is not the most efficient way to compete anymore. Without knowing your customers individually, it will be very hard to become relevant for your customer, while you can not stay relevant for your customer, you can not be able communicate with them and sell your product, so basically you can not be able to survive any more. This is the basic reason today we are talking about all transformation, big data, digital marketing, the importance of customer experience and so on. At the end of the day, if you want to have a commercial relationship with your customer, you need to be relevant for her/him. You need comply with their needs and expectations, more over, you need to influence the purchase decision of the customer. So in this article, I will try cover the new consumer decision journey and the opportunities for the market.

Most probably the ultimate goal of marketing is; to reach customer at the moments that most influence their decisions so that customer start a commercial relation with you. Today; market is most crowded than before, customers are more connected and interactive and less loyal than before, industries are being disrupted by cross industries, customer expectation is more than a product, their expectation is around experience rather than a product, and as a result traditional purchase funnel has been also changed. So let us look at the differences of the traditional purchase funnel and new customer decision journey.

Traditional Funnel :

Traditional purchase funnel tells us the purchasing a product in a linear step which is more or less like;

A customer starts with a number of potential brands in their mind, marketing is then directed at them as they methodically reduce that number and move through the funnel, at the end customer emerge with one and purchase the product. In the mass marketing era, that was the straightforward purchase channel which was the fact.

Today the traditional funnel doesn’t seem to be sufficient to understand the purchase process. Change in the consumer behaviour and knowledge level, digital technologies, number of touchpoints and channels, number of products and etc… they have all altered the traditional purchase funnel. Thus, a more sophisticated and less linear approach has been established which also brings new opportunities for marketers.

McKinsey names this new approach as New Customer Decision Journey and has done survey for 20,000 consumers of five industries through 3 continents. Let us go through this new decision journey;

As a customer of several industries, all of us, are subject to information and marketing booming everyday! We get impressions of brands and products from several touch points, mass media advertising, news, reports, familly, friends (WoM), internet reviews, push notifications, social media and etc… In case that we are not actively shopping, all those information seems to wasted. However, if we are triggered by any need to buy something, then all those impressions shape our initial consideration set. Brand awareness is an important factor of building the initial consideration set, it reduces the number of potential choices. Moreover, according to McKinsey survey, brands is the initial consideration set can be up to 3 times more likely to be purchased.

The important change in the new decision journey starts here, unlike the traditional purchase funnel, through the active evaluation phase, number of brands does expand rather than narrow as customers seek information and shop. Which means, new brands now can be able to influence and interrupt the decision making process by entering the consideration and even force the exit of the brand in the initial consideration set. For Instance for automobile industry, if there is 3.8 brand in initial consideration set, 2.2 brands has been added, for telecoms industry initial 1.5 brand has been added by 0.9 brand in the active evaluation phase. Initial consideration set brands can not guarantee their positions through the active evaluation phase.

This change addressed above is due to new empowered consumers so consumer driven marketing is increasingly being main stream marketing rather than traditional marketing. In consumer driven marketing, basically rather than push/traditional marketing, the new empowered consumer pulls the information which is relevant for their purchase decision. Again according to McKinsey survey, In active evaluation phase two thirds of the touch points involve consumer driven marketing tools such as internet review, WoM (Word of Mouth) recommendations, past experience with the product or brand. So basically, there is an opportunity for new brands to enter the the potential choice list with using the right consumer driven marketing tools and with more reasonable marketing budgets.

The second important change in the new consumer decision journey is definition of the loyalty and impact of it during the active evaluation phase. As I tried to define above, todays purchasing process is not like buying a stand alone product, it is instead an experience. That is why the post purchase experience is an important part of this experience journey. Your post purchase experience with a brand or product impacts the initial brand consideration set and also is a very valuable input for the active evaluation set. I may give one example from my own, when the first ipad has been launched in 2010, I have ordered this product from US without really any experience with that category and product. The experience with previous Apple products and brand was the main reason behind this purchase decision, it was definitely not about being an early adopter or another reason. That was absolutely the post purchase experience of mine with Apple.

The importance of loyal customers of a brand or product are mainly; repetitive purchase relation with the brand and the high cost of gaining new customer. Thus loyalty is being a more important subject in today’s complex marketing. However there are two types of loyal customers of a brand. Active and passive loyalists. The main difference of an active loyalist is, as stated in the name, they are not only loyal to your brand, instead they also recommend your brand to others and influence others decision journey as well. Passive loyalists are, unlike active loyalists, more open to the messages from competitors and easy to switch. So when working about the loyalty, the main aim should be increasing the number of active loyal customers of a brand.

I believe new generation marketing or consumer driven marketing is an important aspect of marketing today. To enable consumer driven marketing strategies we need to first understand this consumer decision journey. The alignment on our marketing with the consumer decision journey helps us first using marketing budgets for effectively and of course the ultimate goal of increasing the revenue. I tried the summarize this new journey.

Thanks for reading.

Sources ; McKinsey reports — Consumer Decision Journey; Don Peppers — The One To One Future