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Christian Goy, MD at consumer behaviour specialists Behavioural Science Lab shares insights into why consumers effectively connect to certain brands across a range of devices, and how the path to purchase of goods and services is less straightforward than it might seem.

The world of customer journeys is a terrible mess. The linear path to purchase does not exist. “Predictable shopping patterns, once so fundamental to marketing and advertising strategy, have gone by the wayside. Persona- and demography driven strategies now fall short – the winners in this new era are the brand and retailers who’ve put a plan in place to meet actual shoppers anywhere along their path to purchase,” says BazaarVoice.

Even though marketers claim to understand, use and predict consumers’ shopping patterns with (1) web and mobile analytics, (2) social analytics, (3) media analytics, (4) customer journey analytics, or (5) voice of the customer analytics, most marketers still do not know why buyers bought their brand or their competitors’.

Take Jessica for example.  She is looking for a new tote – “a gift for herself,” she would argue. She needs something bigger for her personal items, as well as what her kids need. She wants something that can help her stay organized, is durable, practical and looks good.

She starts her journey on Google search; moves quickly to Pinterest, Instagram, and then reviews a few products sites that sell the bag for which she is looking. Two items look promising. She reads a couple of customer reviews and a week later looks for them in her favorite department store. Unfortunately, the store does not carry either of the two products which were at the top of her list. So she goes back online and finds a retailer’s web site that shows a real person holding the tote she wants and photos of the bag being used to carry diapers. She can tell from the pictures that it will work well for her, and she buys the tote. According to BazzarVoice that journey lasted thirteen days.

This idea of expected utility or value is at the heart of behavioral economics. It assumes that the value of each product or service is determined by a very specific set of psychological and economic elements, which play a role in the buyer’s expectation of its value…

The problem is not a lack of understanding touch-points, channels used, time between channels and so forth, but rather a lack of understanding as to why Jessica chose the product she did. Current tools can do an incredible job aggregating the bits and pieces of what a person did — but not why. If marketers don’t understand why people choose a certain product, the path to purchase will always be of secondary value because it is only the means to an end, and not the factors that motivated its use in the first place. Without this basic knowledge, marketers can never put a strategy in place that delivers on what customers truly want, but only how they “get there.”

How Do We Solve That?

Human thinking is complex and trying to fit their behavior, which often appears irrational, is difficult.  The reason Jennifer is using so many channels to gather information is to find a product, which can fulfill the utility she expects from her new tote.

This idea of expected utility or value is at the heart of behavioral economics. It assumes that the value of each product or service is determined by a very specific set of psychological and economic elements, which play a role in the buyer’s expectation of its value.  The relative value of purchase options determines how much we pay for something and how we decide what to buy.

In Jennifer’s case, we might assume she is looking for a tote bag that has certain attributes such as size which allow it to perform certain functions (economic), a price she can afford (economic), compliments her look (psychological), and perhaps, creates recognition of her shopping savvy among her friends (psychological).  Not only does she put these elements in a certain order, each element is surrounded by a set of decision heuristics (rules of thumb she has developed for herself) that Jennifer uses to evaluate which bag maximizes her expectation of utility.

How Do Marketers Create Utility?

To convince the Jessica’s of the world that you have the perfect tote for her; marketers need to first learn what drives utility and then deliver on those elements. Here are some simple, but important next steps to accomplish that:

Deeply understand what drives the expectation of your products’ utility — These are the psychological and economic decision elements used by the buyer to define utility.

Define buyers by how they make purchase decisions — Group buyers into segments with similar decision elements. This will allow the marketers to be more effective and specific in their messaging and product offering because your customers’ specific needs will be addressed. Jessica’s decision type would have started with functionality, then pricestylesize, and so on.

Create specific communications and channels to address buyers’ psychological and economic needs — Show the potential functionality buyer that one path is easier and more efficient than any other.  This adds value to the search process, rather than just adding to the “work” required to find the “right” product.  Fulfilling specific decision requirements through specific and individualized communication channels is the key.  We have found in our studies that if you are able to only address and fulfill the primary driver in a buyer’s decision system, the likelihood of purchase is very high.  Just imagine the likelihood of purchase if you could address the second and third drivers, as well.

Do not forget, the path to purchase starts in the buyer’s head; marketers should start there to understand how to sell more effectively.

This post originally appeared on the Kuppingercole blog and is reused with kind permission.

Christian Goy

Managing Director, Behavioral Science Lab


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