Thanks to widespread access to the Internet, today’s funnel is actually shaped more like a circle. In my last blog we post looked at what that funnel looks like and how marketers must consider the right way to talk to consumers across many different touch points.
Today, we’re considering how technology has changed the consumer buying process and what that means for marketers.
Change #1. How consumers consider brands
To explain this point, here’s an example. Imagine someone decided to buy a car. As with most types of products, a potential buyer will establish an initial set of brands to choose from. While conducting qualitative research, consumers explained that fragmenting media and the proliferation of products made them cut down the number of brands they consider at the outset. Faced with a wide variety of choices and communications, buyers have a tendency to check out the limited set of brands that they remember from the advertising messages that passed through. Brand awareness matters: this is why those considered initially are three times more likely to be purchased than those that aren’t included.
However, brands excluded from the first stage have nothing to worry about. Contrary to the funnel metaphor, all the brands analyzed during the active-evaluation phase may actually grow rather than narrow down. This is because consumers are always in search of information and shop depending on category. Brands may become part of the decision-making process by becoming a part of buyers’ consideration set and eventually forcing rivals out.
Now the number of brands included in later stages varies based on industry. These changes in behavior opens up more doors to opportunities as it enables marketers to add touch points when brands easily make an impact. Brands that are already under consideration cannot afford taking this status for granted.
Change #2. A new wave of empowered consumers
The second prominent change is the shift in outreach direction. Previously, marketers had to outreach customers; however, in the present, it is more important to have consumers connect to marketers. As mentioned earlier, traditional marketing was driven by companies, rather it was “pushed” on clients via different channels. At each point in the funnel, as clients narrow down their options, marketers would attempt to change their minds. Unfortunately, this approach lacked precision, failing to reach its target audience at the right time.
During consumers’ decision making process, consumer-driven marketing has proven to be more important as customers try their best to take control of the process and actively get out the information they need to help them make up their minds. Studies uncovered that two-thirds of the touch points set up during the active-evaluation phase are more focused on consumer-driven marketing activities like online reviews and recommendations from friends and family and experience while buying from stores. The remaining portion consists of touch points related to company-driven marketing. While traditional marketing remains vital for marketers, how consumers make decisions indicate that marketers should grow more aggressive beyond push-style communication and find out consumer-driven touch points.
A good example can be found in the US automobile manufacturing sector, Companies like Chrysler and GM have always concentrated on using sales incentives and in-dealer programs to become part of the initial consideration set and stay there from the active-evaluation stage and all the way to the moment-of-purchase phase. However, these companies have been spending a lot of their time and money on other things. The real challenges they have to face are during the initial-consideration and post-purchase phases, which is where Asian brands like Toyota Motor and Honda have proven to be highly successful. Positive experiences with Asian vehicles have driven consumers to become loyal buyers. This in turn makes their buyers spread positive word-of-mouth, increasing the likelihood of them being part of the initial-consideration set. If US vehicle manufacturers follow suit, their sales incentives can survive this virtuous cycle.
Change #3) The two types of loyalty
During the moment of purchase, when buyers make up their mind, the work of a marketer has hardly just begun. After all, the post-purchase experience shapes buyers’ opinion for every decision they make later, which is why the decision journey is a continuous cycle. For example, stats show that over 60% of consumers perform research online to discover more about facial skin care products. Had the funnel remained unchanged, this touch point would have been unimaginable
While it is essential that you provide an after-sales experience ensures clients’ loyalty to your marketed brand and ultimately purchase it alone, clients’ loyalty can fluctuate due to today’s increasingly competitive, complex business sector. Of the buyers who profess loyalty to a specific brand, some are extremely loyal as they not only use that brand over and over again, but also endorse it and publicize it through word-of-mouth. On the other hand, you have passive loyalists stay with a brand without being committed to it due to sheer laziness or because they’re confused by the wide range of offerings available in today’s market. The second type of loyal clients is the trickiest to handle as they can be swayed towards the competition when given a solid reason to switch.
Take for instance the automotive-insurance industry. Most insurance companies have a large base of seemingly loyal clients who seek their services year after year. Studies show a six-time difference between the ratios of active to passive loyalists of top brands, which means that companies can easily interrupt the loyalty loop. US insurers GEICO and Progressive take advantage of this by investing in efforts, such as easy switching, to capture passively loyal customers.
Therefore, marketing should aim at expanding the base of active loyalists. To do so, you need to spend more funds on the new touch points. For that, you will need entirely new marketing efforts that surpass investments in websites and efforts to boost the chances of word-of-mouth or ensure higher customer satisfaction.
In the next blog post in our series, we’ll look at some tactics to effectively use the user conversion funnel to your advantage.
