The Consumer Decision Journey

I wrote a few weeks back on why awareness is necessary but not sufficient in marketing, and why it’s a pretty poor measure of marketing success. Lots of people are aware of Nortel right now, but I don’t see queues of telcos waiting to buy the latest LTE offering from the to-be-dismantled vendor. In other words, perception matters more than awareness.

It’s now suggested by consultants at McKinsey that awareness isn’t even a prerequisite in consumer decision making. In its recent paper on the Consumer Decision Journey*, it challenges the traditional linear progression of consumers from awareness through familiarity and consideration to purchase and subsequent loyalty (= repeat purchases). The chart below shows this well-accepted process.

McKinsey now says that consumers no longer buy in this way. Instead, they start with a trigger event that spurs them into action: they decide they need/want a new car/phone/handbag. Importantly, this trigger event is not necessarily the outcome of awareness of various products, but externally driven.

Such trigger events could be the launch of a new product, such as the iPhone. But more typically they are driven by a change in needs or perceptions by consumers. I don’t decide to buy a new car because of the launch of a new model, but because my old car is too costly to maintain, or too inefficient on fuel consumption. I’m prompted to buy a new phone because my existing contract expires, not because Apple or BlackBerry launch a new product. My wife decides she needs a new handbag to match the new shoes to match the new dress that she bought for a friend’s wedding.

The trigger forces the consumer to compile an Initial Consideration Set. This is a small set of products or brands that the consumer may be aware of. Importantly, this Initial Consideration Set may be empty. My awareness of wood floor varnish was, until recently, zero.

Consumers then and only then make themselves aware of a range of products, tuning into marketing messages they previously ignored. In a phase termed Active Evaluation, they increase the number of products and brands they consider. They read web site reviews, consume marketing literature, talk to friends and family. In short, they go shopping. (McKinsey says that many consumers have not decided what to buy before they enter a shop.) This frenzy of focused activity culminates in a decision to buy (or not to buy, presumably followed by a wait for a further trigger event).

Purchase is followed by post-purchase experience. Does the product live up to the consumers’ expectations? If so, it may trigger further related purchases. If not, it may trigger purchase of a competitor’s product.

The final phase is called the Loyalty Loop. There are, according to McKinsey, two types of loyalty. It can be active, where you remain loyal to the particular brand you initially purchased. Or it can be passive, where you may consider other brands but have preference ‘all other things being equal’ for your current brand. The complete process is shown below:

I think this non-linear concept has much more value in understanding how people buy stuff nowadays. People don’t start with a large number of options and narrow them down through a funnel approach to their ultimate choice. They’re not that systematic.

I also believe that businesses buy in pretty much the same way. They start with a decision to buy something, drive by competitive pressures, cost pressures, regulatory pressures or whatever. They then compile an Initial Consideration Set, expand this through Active Evaluation (possibly a formal procurement process), before decision time.

Interestingly, McKinsey’s model also caters for those impulse buys, where awareness plays no part: I see, I buy. Probably not as applicable to B2B markets. Unless you know differently…

*Subscription is required. There’s an interesting interactive summary available for free.

Marketing has changed – have you noticed?

Ian at Vocanic points me to Tom Fishburne’s latest cartoon, reproduced here:

I talked about this in the Insanity of Marketing paper, which is still one of the most read of our writings. It’s pointless to do marketing in the old way because there’s too much marketing out there – your customers are just tuning it all out. Insanity is doing the same things and expecting different results. The game has changed.

Influencers help cut through the noise and get your message heard. Only, of course, if you know who your influencers are and are successful at engaging with them.

Who influences fashion?

Fascinating, if somewhat irrelevant (to serious B2B marketers), discussion on BBC Radio4’s Woman’s Hour*. It discusses the influence of fashion magazine editors from Vogue and Grazia.

Who would you say is most influential? Two interesting points for discussion emerge:

Influence applies to different people at different times. Vogue aims to influence aspiration and is orientated around what will happen in the fashion industry. Grazia influences what is being bought right now. Different audience and different roles in the decision process.

Some influencers are unaware of the extent of their influence. Asked to estimate their own influence, the editor of UK Vogue, Alexandra Shulman was refreshingly humble and declined to accept that she had much influence. Editor of Grazia, Jane Bruton, was in no doubt as to her influence (and comes across as a tad arrogant).

Caught in the middle was Lorna Perrin of French Connection, the obligatory ‘vendor,’ who did a good job of explaining how she supplies each influencer with the resources they need: one-off samples of the latest garb for Vogue; examples of what’s hanging on the rack in store today for Grazia.

Perhaps not so irrelevant after all – we can all learn from this approach to influence.

*I’m not in the habit of listening to Woman’s Hour, you understand.

LinkedIn influence – is this for real?

So I’m cruising around LinkedIn when I spot, under the heading Viewers of this profile also viewed…, this entry:

Hillary Clinton

I admit, curiosity got the better of me so I took a quick look. It is indeed the US secretary of state and presidential candidate. On her profile, again under the Viewers of this profile also viewed… showed:

Barack Obama

Rudi Guiliana

Sarah Palin

Matt Damon

Kevin Bacon

and so on.

Is this for real? Are politicians and actors really using LinkedIn as a networking device? Mr Obama’s entry has (not surprisingly) over 500 connections.

If it’s all a spoof it’s expertly done. The understatements are wonderful: Mr Obama describes his current role as “I am serving as the 44th President of the United States of America.” Kevin Bacon is an “Independent Entertainment Professional”. There is no hint of sarcasm or irony. It could be authentic.

Is it? Can anyone confirm this?

Linked helpfully informs me, on the How you’re connected to Barack sidebar, that I’m only 3 connections away from the president of the United States. But I suspect that everyone else is too. Unfortunately, LinkedIn also notes that “Barack Obama is not currently open to receiving Introductions or InMail”

Oh well…

PS – As far as I can see our own nation’s leader, Gordon Brown, isn’t on LinkedIn. Is anyone surprised by this?

Are you “blowing up balloons”?

Following on from my earlier post on What is a lead?, the comments received prompted recall of a presentation by Malcolm McDonald, a marketing thought leader. He challenged the marketing profession to be taken seriously, lest it be destined to blowing up balloons at events. How many marketers really have a strong position within their organisation, and are well respected for the contribution they make to the firm’s success? Perhaps an indicator is the number of good people being made redundant from marketing functions – I suspect they are simply undervalued.

Whose fault is this? It’s partly that of management, unable to recognise the value of marketing against, say, R&D. There are plenty of firms out there that have great technology but awful marketing. In tough times, it’s marketing that differentiates, not great technology. Nortel and Sun are examples: great technology but an inability to communicate it well enough.

But it’s also the fault of ourselves. Lets talk up the value of marketing, and do some marketing for the marketing department. Let’s also strive to measure valued metrics. Awareness, column inches and numbers of leads are quantifiable but largely meaningless. They measure activity, not effectiveness. Instead try sales velocity (lead-to-close time), leads-to-sales ratios, campaign ROI, and so on. I’m depressed when difficulty in measuring marketing is translated into defeatism. “It’s hard so we won’t try.”

I have a suggestion. Try.

What is a lead?

Marketing is often measured by counting the leads it creates. Many see this as a primary role of marketing – to feed the pipeline. The trouble is that it becomes an end in itself, rather than the means to a sale. So we count leads as the output of marketing – it follows that we classify anything we can as a lead, in order for it to count towards the total.

That’s basically why we use direct mail and other broadcast techniques in marketing. High volume outbound activities generate high volumes of inbound enquiries, which count as leads. Don’t they?

Such leads are often not much more than a name and phone number. They may be responses to a free offer or white paper, in which case they may not even be expressions of interest in you (just expressions of interest in your subject – not the same thing at all).

If you’re measuring marketing by counting leads it’s mandatory that you also measure leads-to-sales ratio. Together they measure the efficiency (number of leads) and the effectiveness (consequent sales) of marketing.

What typically then happens is that the number of leads diminishes, as you get better in passing on to sales those leads which have a higher likelihood of turning into revenue. You need to warn sales, and your senior management team, that this will happen, as otherwise they may hit the panic button. Recalibration of marketing measurement is required.

Nobody Tweets

You’ll know that I don’t Twitter. As Seth says, “I’d lose 6 hours every day if I was on Twitter.” Who’s got the time to Tweet?

Well, it turns out that I could be a Twitterer and not Tweet, and be in good company. Not many Twitterers Tweet at all. Check out this research from Harvard Business School. Skip past the interesting but (to this blog) irrelevant stuff on men following men. The key chart is at the bottom of the page. 90% of Tweets are made by 10% of Twitterers.

The implication is that, in the main, Twitter is used in a unidirectional broadcast way, like traditional marketing, rather than in conversations. The use of Twitter for marketing purposes may be more advanced that I thought.

Sponsored conversations are the price of being boring

As Andy Sernovitz says in his book, advertising is the price of being boring. I was reminded by this by Ruth at Brand Strategy, who cites Amazon’s Jeff Bezos saying basically the same thing.

It’s the way of the world that not everybody can have an interesting product – there’s only so much enthusiasm one can muster for the mundane (mobile phones, batteries, pencils, etc). But it is often possible to wrap an interesting story around a mundane product. A man eating pies may sound mundane, but if there are 92 pies and they are consumed in every football ground in England, then you have a sporting travelogue that is much more interesting (to footie aficionados at least).

The point is, marketers need to work at the story that sets the context of their product. Give the market something interesting to talk about and talk about it they will.

So I’m troubled by the Sponsored Conversation idea being talked up by Forrester. Essentially this is paying people to talk about your product. It’s happening on blogs and Twitter, as well as in the real world. We talked in the book about ‘Brand Advocates’ – consumers paid to recommend products to their friends and acquaintances.

Personally, I can’t imagine much worse than being pitched to by a friend. They wouldn’t be a friend for long, is my guess, especially if they made a habit of it. Yet this is the kind of thing we’re talking about, migrated to an online platform.

The key concept here, of course, is disclosure. It’s mandatory that anyone being paid to advocate discloses this fact.

Disclosure is fine for transparency but taking payment undermines influence, the likelihood that someone will make a buying decision based on what an advocate says. My suspicion is that sponsored conversations – aka paid advocacy – simply won’t be effective because they won’t be believed.

Which kind of makes the exercise pointless.

Much better to get free advocacy by creating remarkable products and services.