Sunday, August 3, 2014


An article based on McKinsey research that misses the key issue with omnichannel marketing and sales---customer satisfaction from purchase immediacy, also known as having the needed supply chain for the new business world.   Tolerance for long delivery times---not quick--are a way to make the buy less satisfactory.  The new supply chain includes inventory positioning--both internal and external--as a component. 

Spark Business IQ Ignite

The Sale-Snagging Process: How Today’s Customers Make Decisions

  • Jul 14, 2014
  • Nancy Mann Jackson

Once upon a time, customers went into a store to purchase a product, considered all the options available on the shelves, and made a decision. In today’s digital world, customers have seemingly unlimited options before them with the swipe of a finger. To be successful, business owners must understand how today’s customers make purchasing decisions.
how customers make decisions
According to research from McKinsey & Company, which looked at the purchasing decisions of 20,000 buyers on three continents, companies must find new ways to get consumers to consider their products because of the wide access to media and variety of products available. For instance, 90 percent of consumers say online reviews influence their purchasing decisions, according to research from Dimensional Research. Marketing is no longer just one-way communication, from marketers to consumers; with social media, it has become a two-way conversation. As a result, companies need to establish a system to satisfy customer demands and manage word-of-mouth.
The Decision Process
Rather than simply looking at all the options and making a decision, today’s consumers go through a four-stage process of decision-making, McKinsey researchers say. And businesses that understand that process will win more customers and more sales as the world becomes increasingly digital.
That customer decision process includes:
1. Initial consideration. When a consumer decides to make a purchase, the products or brands that they initially consider buying are usually based on what they’ve seen, heard, or experienced about these products. So brand awareness continues to be important in getting your brand or product into a consumer’s initial consideration set.
2. Active evaluation. This is the process of researching potential purchases. While consumers would traditionally only learn about specific brands or products through advertisements or direct marketing that might happen to come to them at the right time, today’s consumers take a proactive approach to finding out more about the products they are considering buying.
McKinsey researchers found that consumer-driven activities, such as internet reviews and word-of-mouth recommendations from friends, are more important than the marketing activities originated by the company. “Traditional marketing remains important, but the change in the way consumers make decisions means that marketers must move aggressively beyond purely push-style communication and learn to influence consumer-driven touch points, such as word-of-mouth and internet information sites,” the researchers write.
However, this proactive research by consumers means that companies that aren’t in the “initial consideration” set may have a better chance of getting added to those under consideration during customers’ research. For instance, McKinsey researchers found that people actively evaluating personal computers added an average of one brand to their initial-consideration set of 1.7, while automobile shoppers added 2.2 to their initial set of 3.8.
3. Closure. This is the point-of-purchase moment, when a consumer makes a decision and buys a product. While business owners can often sway buyers at the moment of purchase with an offer of a discount or simply providing good service, the reputation, brand, and marketing activity that take place before this point are more important in getting the customer to this moment.
4. Post-purchase. After a consumer has made a purchase, his or her decision is not final. Now begins the consumer’s experience with the product, which will shape his or her opinion for future buying decisions. And at this stage, providing ongoing information and service remains important to build loyalty; for instance, more than 60 percent of buyers of facial skin care products go online to conduct further research after the purchase, McKinsey researchers found.
Influencing Customers’ Decisions
As a small business owner, understanding how customers are making decisions about your products can help you do a better job wooing and winning them. These four tips will help you make the changes necessary to get the attention of today’s digital consumers:
1. Find the pain points. Rather than simply focusing on the traditional strategies of building awareness or generating loyalty among current customers, figure out what part of the decision-making process is tripping up your would-be customers, and focus specifically on that point of the decision journey. For instance, because research showed that some skin care brands are much stronger in the initial consideration phase than in active evaluation or closure, McKinsey researchers recommend that they shift from focusing on brand positioning to efforts that make consumers act or investments in packaging and in-store activities targeted at the moment of purchase.
2. Tailor messaging. If your marketing messages are broadly focused on all stages of the decision making process, you may consider messages that are more tightly focused on the stages where potential customers are leaving you behind.
3. Focus on consumer-driven communications. Make investments in vehicles that let your company interact with consumers as they seek to learn about products and brands through online information, reviews, and recommendations. That may include hiring someone to manage social media accounts for your company, creating a more robust website with information about your products, fostering word-of-mouth recommendations, and online advertising that can target potential customers and create variations on your ads that take into account viewers’ past behavior and your current inventory.
4. In-store merchandising. McKinsey research shows that “one consequence of the new world of marketing complexity is that more consumers hold off their final purchase decision until they’re in a store.” That means your products must look inviting when they come into your location; up to 40 percent of customers change their minds because of something they see, learn, or do at the point of purchase, such as packaging, placement, or interactions with salespeople.
Small business owners have long been experts at getting to know their customers. By continuing to get to know them better — and the processes by which they make buying decisions — you can build a stronger bottom line for your business.