July 11, 2009 at 19:15
· Filed under Reviews and tagged: Business, business development, marketing, Social Media, strategy
Article: “The consumer decision journey”
Source: McKinsey
McKinsey did an extensive research on three continents, several industries and 20000 customers.
The cyclic Consumer Decision Journey isn’t groundbreaking, I’d say it’s an affirmation -from a company as McKinsey- of what is already known for a while but not carried out in mainstream business strategies.
I’m talking about the distanciation from the linear, sequential, narrowing funnel which is mostly used to explain consumer decisions and where marketing tactics should be employed to influence positively the target audience with the brand attitude.
This means marketing strategies and their executions must be adapted to the new way consumers are going through the process.
Several neuromarketing and neuroeconomical researches have pointed out to a much more ‘chaotic’, impulsive and more complicated process and behavior rather than a funnel.
This also is being carried out in the McKinsey research where is found that “Two-thirds of the touch points during the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family” .
It goes beyond the abovementioned. The high influence and transparency of communities, social bookmark sites and other opinion-enablers have its influence upon consumers. The choice between brands doesn’t really narrows, as the process advances, in the active-evaluation phase the much more trusted opinions of other consumers weigh heavily in relation to the (disruptive) advertising / marketing techniques by the brands.
I suspect companies prefer to use the funnel as a guide because it explains the process easier and it can be handled.
The more complex a model gets, the less guidance it gives.
To get a bit philosophical, humans don’t like uncertainty, simple as that. If you would look back, many theories are developed, not so much to explain the phenomenon itself, but more to get rid of the uncertainty.
We prefer to have not-so correct models that explain processes and behavior, instead of other less understandable but more appropriate models.
Because the new paradigm is getting more diffuse, it’s time to embrace the new models in favor of the phenomenons. All can be measured, better and more complex analytical platforms are developed to extract the needed information to explain consumer behavior. Competitive advantages decrease, reaction time decreases, competition increases, all reasons to embrace the unknown.
What’s your opinion on modelling the purchase process?
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modelling the purchase process is important obviously if you wish to apply fine methodology to your business planning however it is important, in order to minimise the uncertainty (which equals risk – a factor that is better be quantified in a plan/strategy document) question being asked is ” what are the factors/variables to be included throughout the process in order to make sure it consists of the relevant factors influencing the purchase and of course the process cannot be the same in B2B or B2C, the specific industry, market, regulation and other factors influence and change the structure of the process in order to make it effective and eventually increase the probability it will meet up the expetation effectivly reflected in the Sales Plan, “Go to Market Plan” and or any other document predicting revenues from target markets/segments.
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Mckinsey is confusing the psychology of buying with a marketer’s approach to intervening in the process.
The linear progression that McKinsey challenges is based on AIDA – Awareness, Interest, Desire & Action.
To my knowledge, nobody has ever maintained that this is how people buy. We have understood since Maslow was a boy that human actions are based on fulfilling needs. When we have a need, we set about fulfilling it at a speed dictated by the urgency of the requirement and the degree of risk in the decision.
AIDA remains valid and has its place for those that understand it. To claim insight from the revelation that purchases are needs and desires driven is like proclaiming the Earth orbits the Sun.
http://bit.ly/DE08j
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Good post.
What exactly do you find the difference between customer behavior and marketing intervention? To me it are the two sides of the same coin.
If you don’t know when to intervene you might be too late or too early creating brand awareness and a spot on their consideration list.
If you don’t know how customer behavior works, a marketer can intervene all he or she wants, but not with the maximum result.
“To my knowledge, nobody has ever maintained that this is how people buy”, there are -too- many that apply AIDA to create supports to fall back on. Problem remains, AIDA might have been correct back then (1898) in that economy, but mr. Lewis developed AIDA to explain mechanisms of personal selling.
Personal selling/sales is much back then is a different and other world then marketing in a dynamic world as we know it now.
Neuromarketing research has found that AIDA could be at most a reversed process of it.
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If we take an impulse buy e.g. buying a bar of chocolate when paying for fuel, the process is as follows:
– The positioning of the display and the packaging attracts our attention.
– Our perceptions, created by advertising, peer group comment (inc. social media) or prior experience are stimulated.
– Our attention moves quickly through interest to desire and we make the decision to buy.
Whether a marketer is trying to stimulate an impulse purchase or place a product in the consideration set, the marketing strategy has to begin at the point of creating awareness and attention. As basic awareness turns to interest, the focus can turn to influencing perceptions and creating the desire. Whether this is by progressing the messaging in ‘old-style’ brand advertising or using ‘modern’ social media doesn’t change the basic objective.
My mild frustration is that the McKinsey theory says nothing new and at the same time suggests that AIDA is now incorrect. I don’t agree – it has stood the test of time because it’s common sense. A consumer or business can’t desire a specific product or service if they don’t know it exists in the first place.
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