Our review of McKinsey Quarterly's article, "The Consumer Decision Journey," continues with a look at "What Marketers Should Know." (Please see previous blog post for an overview of the article.)
The research indicated that, rather than the traditional purchasing funnel of awareness, familiarity, purchase and loyalty, a different model has emerged. No longer can marketers expect that there is a linear approach to consumers' purchasing process, nor should they assume that the consumers' initial brand consideration set is extensive and simply becomes more refined as they move toward ultimate purchase of the product or service. Neither is true in the new model, developed based on the research. What marketers should know are the various steps in the consumer decision journey.
- Initial Consideration Set: Based on a trigger event, the consumer considers an initial set of brands, based on brand perceptions and exposure to recent touchpoints.
- Active Evaluation: Consumers add or subtract brands as they evaluate what they want (through information gathering and shopping).
- Moment Of Purchase: Ultimately the consumer selects a brand at the moment of purchase.
- Postpurchase Experience: After purchasing a product or service, the consumer builds expectations based on experience to inform their next decision journey (through ongoing exposure).
The cyclical model inherent in the consumer decision journey is completed with the Loyalty Loop, which can be either active or passive, suggesting that there are really two types of consumer loyalty. If the consumer is an active loyalist, at the moment of repurchase the brand previously purchased is the only brand considered, while if the consumer is a passive loyalist, the brand previously purchased may only be one brand among several considered for the next purchase.
The consumer decision journey may not be groundbreaking research, since many in the marketing world would likely agree that this model simply affirms what has already been known, or at least surmised to be true, for some period of time but just never substantiated. The linear, sequential, narrowing funnel which has traditionally been used to explain consumer decisions never really captured accurately the consumer purchasing process. It should not be a surprise then that embracing this cyclical model, however, means that developed marketing strategies and their respective executions generated based on the traditional funnel model must be adapted to the way consumers are actually going through the buying process.
McKinsey research found that, "Two-thirds of the touchpoints during the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family". The influence of online communities, social media sites, etc. have significant consumer influence. The choice between brands does not typically narrow, as the traditional process advances. In the active-evaluation phase the much more trusted opinions of other consumers weigh heavily compared to advertising and marketing efforts made by companies.
Despite the many strong foundational affirmations expressed by the McKinsey research, that is not to say that all of it should be taken at face value. For example, we might want to question the notion that consumer decisions are only made at the store, as advanced by the model. That may be true in many cases, but it might be argued that some consumer decisions in terms of the selection of a brand to purchase is made prior to actual purchase in the store. So, the pervasive question that arises is: Does this new model truly capture the consumer decision journey, or is it simply a better model than what we have histoically used?
McKinsey Quarterly recently published an article titled, "The Consumer Decision Journey." The next couple blog postings for "Under The Magnifying Glass" will relect on the research findings discussed in the article.
Since the article is only available through a premium membership, we encourage our blog readers to review the video summary from David Court, Director, Global Marketing Practice at McKinsey, which provides a great summary of the research and highlights the change in consumer buying behavior.
http://www.mckinseyquarterly.com/The_consumer_decision_journey_2373?pagenum=1#interactive
At the core of the research finding is the need to understand the various trigger events of consumers in the buying process, and having an ability to initiate marketing action on the trigger event. The article focuses on how the consumer buying process has changed.
"Consumers are moving outside the [traditional] purchasing funnel - changing the way they research and buy your products. If your marketing hasn't changed in response, it should."
The Internet has changed the way we purchase, since product information is now readily available, search engines determine how we find it, and we buy products and services globally. The consumer involved in the purchasing process is now in control. Those companies that choose to recognize this change and adapt the way they market to their consumers are the ones that will ultimately be successful.
"A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests."
So, a fundamental question that comes to mind is this: Why do some companies fail to respond effectively to this change in the consumer decision journey? It is it due to lack of financial and human resources that companies are facing in the current recessionary economy? Is it a lack of marketing savvy within these firms? Or is there some other reason that provides some understanding regarding why some firms have not altered their marketing efforts? We welcome your thoughts.
Next time we will comment on What Marketers Should Know from "The Consumer Decision Journey."
"The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself." - Peter Drucker
Welcome to "Under The Magnifying Glass," the company blog of Consumer Clarity. I hope you find the content both interesting and thought-provoking.
We begin this blog by referencing the quote above, attributed to well-known management guru, Peter Drucker. This quote reflects both Consumer Clarity's purpose, as well as "Under The Magnifying Glass's" objective.
- At Consumer Clarity, we aim to assist businesses in better understanding their consumers (both customers and prospects), so more effective marketing strategies will be developed and executed and business revenue will grow.
- As for "Under The Magnifying Glass," our objective is to share consumer understanding and knowledge and engage others in discussion of ways to better understand and know consumers.
It is the vision of Consumer Clarity to help businesses understand their customers and prospects so well that their product and/or service fits them so well that it essentially sells itself. The firm operates under the premise that a better understanding of consumers generates knowledge that can be leveraged to make marketing strategy more effective and grow business revenue.
Thank you in advance for your participation in the Consumer Clarity blog discussions. We welcome your thoughts and comments.