Who Is Influencing Your Shoppers To Buy Or Not Buy From You? (Part 1)

Do you know how your marketing programs are or are not working for you?  You work to measure results, but do you understand why you are getting those results?

You use your marketing efforts to persuade your customers / consumers to buy your product and services.  At the same time, your competitors and the marketplace provide distractions and disruptions that can either weaken the effectiveness of your efforts or disrupt it completely.

Do you know what percentage of shopping trips your consumer goes into a store planning to buy your product only to walk out with your competitor’s product?  Do you know why you lose these sales?

An earlier blog post talks to the reasons consumers buy products and services.  This post will talk to the people and marketing that influence purchases and the potential points of influence where you can win and lose a purchase.  While this subject is complex enough to merit a book chapter or an entire book (perhaps a future endeavor?), this three-part blog will provide a high level summary that I hope is helpful for you.

We will look at 4 key points of influence during the shopping process:  Marketplace, Pre-Store Research, Shopping Destination Selection and the In-Store Shopping Process.  These points can be linear steps in the shopping process or overlap depending on the shopper and product category.

Marketplace
The marketplace is where most traditional marketing lives—especially outbound broadcast and print media.  You send your advertising out into the market hoping it will disrupt, engage and persuade your target consumer to buy your product.  But if your target consumer is not in the market or is not disrupted by your communication, all of your efforts can be just background noise.  For these non-shopping target consumers, all forms and locations of your marketing are just background information.   You brand communication will likely have a cumulative impact on your brand image and awareness for a future time when a consumer does enter the market to buy your product or service.  But, until those consumers do enter the market, your marketing has its greatest influence on those planning near term purchases.

For consumers in shopping mode for a particular product or service category, messages received from category suppliers will resonate, be evaluated and incorporated into the purchase decision process.  Advertising works, but it is much more effective with consumers who are also actively shoppers.  If your product has infrequent purchases and is a lower priced item, you should consider focusing your marketing dollars at other points of influence.

Pre-Store Research
The next point of influence in the shopping journey is the pre-store research effort where shoppers gather information on what products and services they are considering/planning to buy.  This information gathering increasingly uses search engines, forums, blogs, company websites, retailer websites and consumer reviews as some of the key information sources.  Consumers are seeking this information on their computers and via smartphones.  In Google’s white-paper ZMOT, Winning the Zero Moment of Truth, author Jim Lecinski shared that half of all shoppers are using search engines to conduct product research, 38% comparison shop products online and 36% sought information from a manufacturer’s website.  To access this kind of data, 79% of consumers now say they use a smartphone to help with shopping. 

The implication of this behavior is that you should make it easy for consumers to find your brand and product information online.  To help your brand win your category, be the best at having your product information available where consumers are looking.  Do you have a clear strategy for Google, SEO, YouTube, Facebook, your website and other online destinations?  Consider an integrated approach to these digital marketing tools to achieve consistent branding and information across all consumer touch points.

Increasingly, consumers are placing more weight on the product feedback of other consumers, so having a solid source of product reviews for your brand on your site and your retailers’ sites can help you win the purchase decision.

Consumers also continue to be highly influenced by friends and family members.  Many brands are handed down from parent to child as the right brand to use.  Friends and family are often viewed as the key trusted experts over other information sources.  Google says 49% of consumers talk with friends or family while researching products.  Word-of-mouth marketing has high impact in categories that rely on personal recommendations.

In certain categories, celebrity or pro recommendations have high credibility and trust as a source of influence.  This is not true for all products, so research the impact of these endorsers in your category before investing money here.

While pre-store research does not play a role in all categories, it is increasing in importance and impact for many consumer products.  Make sure your brand offers your shoppers the information they want in the places where they will look for it.  Finding information on your products needs to be easy.  If shoppers have to work hard to research your brand, they are more likely to buy from your competitor.

The above covers the Marketplace and Pre-Store Research points of influence for shopping.  We discuss the key decision and influence factors when selecting a shopping destination in Part 2 of this blog.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Are You Betting Your Success On Out-Of-Date Insights?

How current are your consumer insights? Do you know? For some companies, investing in market research to gain consumer insights is an annual strategic investment. For other companies, there is no market research budget and research is run on an as needed basis. In other companies, market research is one of the first budgets cut in a downturn and important questions are never answered. 

When was the last time you updated the insights on which you base your key strategy decisions? If it has been more than a year since your last strategic market research study, consider making this a near-term priority. Do not assume your consumers have not changed in significant ways.

Why you ask do I need to spend money on fresh insights? Don’t consumers pretty much behave the same way year after year? Why invest in repeating a research study I have done in the past when I know I can spend that same money on programs such as a sales promotion and see results right away? This is a good question and an important question.

Most companies will invest in gaining consumer insights to learn what consumers think about their company’s product and brands and why they behave the way they do—either shopping for or using their products. These insights are used to guide strategy development, marketing planning and new product development efforts. If these insights were important at one point of time to guide strategy development, it is likely they are still important to benchmark current consumer behavior and attitudes to guide strategy today. A modest investment in research today can unlock new consumer and shopper insights that provide new and unique competitive advantage in the marketplace.

When asking why to invest new money this year, consider the dramatic changes with consumers that have occurred in the last couple years. The economy and 9% unemployment have transformed how and where families spend their discretionary income. Food and fuel spending take up a larger percent of a family’s total income—what is “normal” for consumers has been evolving in the last couple years. Spending for daily needs, food choices, lifestyle products and services have all evolved. 

Who is shopping has changed. Consider the insights from a study by GfK, MRI and ESPN: 31% of men nationwide were the primary household grocery shoppers in 2011, up from 14% in 1985. A 1,000 person nationwide 2011 study from Yahoo and DB5 showed a higher number—51% of men reported being the primary grocery shoppers in their household. With a larger percentage of the male population being affected by unemployment, more men are staying home and are taking on new shopping roles in their family. How does this affect your category?

Now add the rapidly evolving integration of technology into consumers’ lives via smartphones and tablets like the iPad. Consumers are researching, shopping, comparing prices and buying products and services in new ways. A comScore study at the end of 2011 showed that 38% of smartphone users used their phone to make a purchase at least once on their phone during the course of their device ownership. This included 47% who purchased digital downloads of songs, movies, ringtones, ebooks, etc, 37% who bought clothing and 32% who bought electronics on their phone.

Phones are enabling shopping in new places—37% of consumers made purchases while in transit and 42% made purchases while at a location away from home, including work. When you consider that 20 million new smartphones are expected to be sold in 2012, this behavior will only expand. How does this affect your shoppers and your selling effectiveness? Do you know?

If you are developing new strategies to grow your sales in the next 1-3 years, you can be much more effective if you have fresh insights on your consumers’ behaviors, attitudes, priorities and purchase criteria. Without these insights, you may miss a key emerging opportunity or simply fail to communicate and promote your products in a way that engages today’s shoppers. If your key competitor unlocks those key insights before you, they can gain a new advantage with your customers.

Make an investment in market research a new priority this year. You would not take a long road trip without a current map or a GPS to guide your way. Be sure to start your 3-year planning with current insights to guide you on your journey.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Sell more by understanding why shoppers buy from you

If you are like most companies, you have a core group of shoppers that are your loyal customers and then you have others that buy your product or service on occasion and some who try your brand and never buy again. 

Do you know each of these groups behave the way they do?  Do you know why your customers buy your product?  Do you know why others never buy your product?

Let’s start with the reasons people buy—what drives them to consider and buy a product or service.  Your brand may fall into multiple purchase decision categories for different customer segments.  Which of these are the most likely reasons your customers buy from you?  There may be other reasons / purchase behaviors for your category, but likely most of your customers can be found on this list.

·         Replacement – replacing something that is used up or broken.   A less frequent purchase, but usually one where someone knows what kind of product they want to buy.

·         Routine – buy regularly from an acceptable set of products or services.  You may be the only product they buy in this category or part of a rotational set of product (or services).  Canned soup, breakfast cereal and fast food restaurants are representative of this behavior for many.

·         Brand loyal—this too can be a routine, habitual purchase.  But these shoppers are brand loyal.  Discounts, special offers will not cause these loyal shoppers to switch.  Brands like Budweiser, Heinz Ketchup and McDonalds may or may not offer the very best product, but they have a loyal following.   Do you provide your customers a reason to be loyal to your brand?

·         Variety seeking—someone who is loyal to a category, but wants to try something new.  A good example is seeking variety when chosing a restaurant.  Condiments, fashion, beauty salons and car shopping can fall into this behavior.

·         Seasonal—the time of certain events or seasonal weather, these category purchase decisions increase at certain times of year.  Examples include:  gardening, hunting, swim suits and Christmas decorations.  Due to the seasonal nature of these selling seasons, sales happen in a shorter time window.  Understanding why shoppers will want your product and how to market it can make or break your year.

·         New & improved—people are often looking for the next new thing.  They are willing to try something new to see if it offers a real improvement, a better value or a solution that simplifies their life.

·         Brand switching to upgrade—like new & improved shoppers, many customers will search for a better product or service if they are not completely satisfied with their current product.  Do you provide a better solution?  Do you communicate these benefits so others know to try your brand?  If your customers are not truly satisfied, you need to re-engage them before they seek better value elsewhere.

·         Brand Mom/Dad/person of influence always uses—sometimes it is easier to trust someone who has more experience.  Many brands are bought because it is the brand that Mom always used.  Friends, neighbors, celebrities, professionals and doctors are other influencers depending on the category.

·         Brand switching to seek value / cut costs—in today’s economy people are looking for value.  Some are willing to reduce value for a lower price.  But if you let your shoppers make decisions only on price, you are missing an opportunity to communicate and sell your unique value.  Most shoppers will pay more if they believe the value for the money is worth it.

·         Indulgence—small indulgences are a hot trend this year.  Can your product and service offer this benefit?  Chocolate, Starbuck’s, fashion shoes and microbrew beer are categories that benefit from this trend.

·         Gift purchase—not everyone is shopping for themselves.  Purchase motivations and personal constraints change when they are buying a gift.

·         Impulse—these people saw your product or place of business and on impulse decided to try it.  For some categories this can be over 20% of purchases.  Understand what drives this behavior for your shoppers.

Each of these purchase behaviors have different buying motivations and purchase criteria.  If you assume all off your customers have the same reason for buying your product or service, you are missing the opportunity to segment your customers and grow your business with customers who buy for different reasons.

If you have not recently conducted research to understand who your shoppers and customers are, and why they buy, you have a great opportunity to boost your business in this year.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com