Topic 6 - Consumer Decision Processes and Neuromarketing
Acknowledging that buying behavior is influenced by individual characteristics, social cultural influences, in environmental factors, the American Marketing Association defined consumer behavior as
"the dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects of their life"
TYPES OF PERCEIVED RISK
(1) Functional (2) Financial (3) Physical (Safety) (4) Social (5) Psychological (6) Time
The consumer typically passes through five stages:
(1) Problem recognition (2) Information search (3) Evaluation of alternatives (4) Purchase decision (5) Postpurchase behavior
Brand Touchpoint (physical)
(1) Shop Front (2) Shop interior (3) Shop assistant (4) Catalogues/Menus/Brochures (5) Packaging (6) Receipts/After-sales materials (7) Posters and Flyers (8) Print advertisements (9) Exhibition/Event stands (10) Documents (letters, contracts etc.)
Brand set involved in decision making
(1) Total Set (2) Awaraness Set (3) Consideration Set (4) Choice Set (5) Decision
Brand Touchpoint (digital)
(1) Website (2) Social media Platforms (3) Digital advertisements (4) Blogs/articles (5) Email newsletters (6) eBooks/Digital downloads (7) Videos/animations (8) Presentations (9) Online directories (10) Digital documents
McKinsey concluded that marketing efforts would be more effective if focused on:
(1) building brand awareness prior to the decision triggered to ensure the brand is included in the initial consideration so set, and (2) maximizing consumer customer satisfaction with the experience after purchase to encourage customer retention, brand loyalty, and online brand advocacy.
In fact, it foreshadowed the rise of two critical developments in our understanding of what customer experience during and after a journey. These are
(1) moment of truth and (2) customer experience management.
In addition to 5 stage of the buying decision process: (1) Problem Recognition (2) Information Search (3) Alternative Evaluation, (4) Choice, and (5) Outcomes, even more influential was the AIDA
(attention, interest, desire, and action) model of customer persuasion, to help illustrate the stages of a customer's relationship with a business.
Even if consumers form brand evaluations, two general factors can intervene between the purchase intention and the purchase decision.
- The first factor is the attitudes of others. The influence on us of another person's attitude depends on two things: (1) The intensity of the other person's negative attitude toward our preferred alternative and (2) Our motivation to comply with the other person's wishes - The second factor is unanticipated situational factors that may erupt to change the purchase intention.
Awareness & Problem Recognition (TOFU)
- The first step in marketing and sales funnel is Awareness and problem recognition. When a person recognizes a certain need they have, this is the trigger for the first phase of a marketing and sales funnel. This is the lead generation phase. A brand must attract the attention of potential customers, so they are aware that it is available. A prospect must become aware of two things, problems of customers and solution of the company.
3 suggestions for selecting branding touchpoints for your business.
1. Map everywhere your target audience will, or could, experience you. (One way we like to organize touchpoints is based on when the touchpoint is relevant: before, during, or after purchase.) 2. Identify a flexible priority list when selecting branding touchpoints. (How many brands need a billboard?) 3. Don't be afraid to explore.
Neuromarketing
A commercial marketing communication field that applies neuropsychology to marketing research, studying consumers' sensorimotor, cognitive, and affective response to marketing stimuli
What are moments of truth (MoT)?
A moment of truth is a moment in the customer journey at which the relationship between the consumer and the brand is at stake.
4. Intent / Commitment (MOFU)
After the consideration phase, leads move onto intent & commitment. They are ALMOST a customer. These people have demonstrated some interest in buying a product or service. Marketers offer free trials, demonstrations, consultations and arrange sales meetings with people at this phase as they are ready to go. They might have left a product in a cart on the website. They have shown strong intent to consume. Marketers to make a compelling case for why their product is the best choice for a buyer.
Packaging
Again, the colors should be consistent, and any added flairs should be on-brand too.
ANCHORING
Anchoring can help you swing the deal the right way
Approaches to Touchpoints
Approach 1: the buying stage One way to look at touchpoint marketing is based upon the typical three stages as they are most used in touchpoint marketing from the CRM perspective: pre-purchase, purchase and post-purchase. Approach 2: buying funnel models A second and similar way to look at touchpoints is according to the buying funnel with the classic cycles of awareness, consideration, purchase, service and loyalty. Approach 3: cross-touchpoint experience models Another way, finally, to look at touchpoint marketing processes, as defined in this graphic, is the customer experience. It maps different touchpoints based on the customer experiences and actions, with corresponding cycles that are more related to the marketing goals, specifically from a social and relational viewpoint.
Digital documents
As with the physical documents and contracts, these should show you're authentic and professional nature by being consistent with everything else.
eBooks/Digital downloads
Brand the Hell out of these, because you never know who will end up downloading them, forgetting about them, and finding them months later realizing that they need your services!
PURCHASE DECISION STAGE
Compensatory vs. non-compensatory models Conjunctive heuristic - setting a minimum acceptable cutoff level Lexicographic heuristic - best brand based on importance of attribute Elimination-by-aspects heuristic - brand s and attributes compared probabilistically
Zero Moment of Truth (ZMOT).
Consistent with McKinsey's discovery that online search patterns of empowered, wired consumers had shifted the balance of power from marketing-directed to consumer-initiated information, Google explained that the online search for and discovery of information represented the critical moment prior to the FMOT
LOSS AVERSION
Consumers hate to feel they are missing out on a bargain, so make sure to emphasize if they are set to lose out
REWARDS AND PUNISHMENT
Create a pleasurable experience for consumers to keep them attached, and coming back, to the product
Social media platforms
Depending which industry your business is in, it is likely that some customers will actually search and find you through social media, so you want to ensure your imagery and tone of voice are consistent with your website, as these are an extension of that!
Shop interior
Does the industrial decor really match your brand's feminine personality? Do the walls match your brand color palette?
Print advertisements
Even if you're constrained with space or colors, it's still important to get your brand's look and feel across!
EVALUATION OF ALTERNATIVE STAGE
Expectancy-value model
Research on how digital innovations can influence the customer journey revealed two insights relevant for winning the SMOT.
First, the SMOT is cumulative as customers evaluate their experience with brands throughout the purchase journey. Second, consumers don't evaluate all experiences in journey outcomes equally. Third, SMOT evaluation can be poor even when the touch points along the journey performs well, particularly when the journey is subject to situational factors beyond the brands control.
3. Consideration & Evaluation (MOFU)
Following the information search, the next phase of the funnel is consideration and evaluation. This is often referred to as "desire", and some models refer to this as "Middle of the Funnel". A consumer starts forming their decision at this point, so businesses should nurture their leads as they have become more qualified. At this phase, Marketing must develop a desire to own or have the product.
AD EFFICIENCY
Functional magnetic resonance imaging (fMRI) has incredible potential for enhancing marketing strategies, increasing engagement and action
5. Conversion / Purchase (BOFU)
If consumers reach the Bottom of the Funnel, they have decided to buy, and become a customer. Congratulations! The customer has gone through all the phases — determining they have a problem and deciding you provide the solution.
Digital advertisements
If your brand is classy and sophisticated, you want your adverts to reflect that so that the right people are attracted to it and will click on it. This is important because most of the time, you will be paying per click, so you want to make sure those clicks come from the people who are most likely to buy from you.
Information Search Stage
Information search (1) Personal sources (2) Commercial sources (3) Public sources (4) Experiential sources This stage should produce a set of options called the evoked set or consideration set
Receipts/After-sales materials
Is there anything unique you can add to these? If you're including a voucher when you hand over the receipt, make sure your customer will look at it later and instantly recognize where it came from!
Posters and Flyers
Just because it needs to catch peoples' attention doesn't mean it has to be gaudy. Stick with your brand fonts and colors so that you become more recognizable.
DECISION PARALYSIS
Less is more and sometimes customers can be overwhelmed by too many choices
EVALUATING SATISFACTION
Like fMRI, EEG can shed light on the most effective ways of advertising (amongst other uses)
COLOR IS KEY
Make sure to familiarize yourself with how color may be used to influence purchasing behavior
USING EFFECTIVE PACKAGING
Neuromarketing techniques are being employed extensively to redesign packaging and presentation
REVEALING HIDDEN RESPONSE
Neuromarketing techniques can reveal hidden responses
2. Interest & Information search (TOFU)
Once Marketing has created awareness and interest in a product, brand or service, we move into the interest and information search phase. Consumers learn more about a company or brand and its offering. Your content marketing continues in this phase and is more information and value-based than basic brand awareness. Here you position your brand in the minds of potential customers and start to develop and nurture a relationship. You also start to introduce customers to your services.
What are your Brand Touchpoints?
Physical and digital
postpurchase stage
Postpurchase satisfaction Postpurchase actions Postpurchase usage and disposal
shop assistant
Should they be wearing a branded uniform? Are they embodying the brand's personality when they greet and serve customers?
Why is it important to know all your business' Brand Touchpoints?
So that you can ensure each and every one of them is consistent and optimized for action.
Catalogues/Menus/Brochures
So you've got your logo on there, but are the fonts and colors consistent with your brand's style? If you're a fun, family-friendly business, the copy and imagery used should portray that.
Intervining Factors
Steps between Evaluation of Alternatives and a Purchase Decision - Purchase Intention - Attitude of others, Unanticipated situational factors
SETTING THE RIGHT PRICE
Take the neuromarketing approach to set your price
Problem recognition
The buyer recognizes a problem/need triggered by internal / external stimuli
PROTOTYPE TESTING
The growth of neuromarketing has the capability to transform the world we live in
Desire:
The prospect begins to evaluate a certain brand. Marketing develops a desire to own a product. The customer wants it.
Action:
The prospect decides whether to purchase. Marketing prompts action to purchase the product.
Awareness
The prospect is aware of their problems and practical solutions for them. Marketing attracts customer attention to the product. The customer becomes aware it is available.
Interest
The prospect shows interest in a group of services or products. Marketing develops an interest in a product or service.
Online directories
These may not be very customizable, but you should always include your logo where you can and inject some of your brand tone-of-voice into the copy so that people know what they're in for!
Consumer customer experiences (CX) management.
Though the moments of truth can be thought of as an independent model, there is a value in viewing consumer behavior as an integrated model.
How does the consumer process competitive brand information and make a final value judgment?
Through experience and learning, people acquire beliefs and attitudes. These in turn influence buying behavior.
WEBSITE LAYOUT
Use science to inform your website design
6. Loyalty & Advocacy (BOFU)
What happens after the sale is key, but many companies fall short at this phase. Simply happy to make the sale, they let many potential future customers just walk away. We want to retain our best customers. The cheapest path to conversion is through existing customers. Loyalty and Advocacy is the final phase of a marketing funnel.
Presentations
Whether these are internal, on SlideShare, or being presented at conferences, you again want to be as recognizable as possible.
THE NEED FOR SPEED
Whilst it may seem like emphasizing the safety and security of a product will win customers over, you may instead want to get the message across that your product is fast and efficient
Exhibition/Event stands
You're probably there to do business, so your display booth or stand is incredibly important to attract people, and most of all, to be memorable!
Videos/animations
YouTube is one of the top search engines in the world - did you know that? People use it as a search tool, and they might just come across your videos there. You want to make sure your videos are memorable and recognizable to stand out from the rest.
Blogs/articles
Your brand tone-of-voice should come alive in any articles or blogs you write as a business. Include your logo at the end or add branded elements to images you use too. You never know who will find your article!
Documents (letters, contracts etc.)
Your customers want to know you're authentic and consistent in yourself, so make sure everything you send to them is consistent to your brand!
Email newsletters
Your formal brand shouldn't be sending spammy emails with emojis and jokes, and your fun and witty business shouldn't be sending out snore-worthy subject lines.
Shop front
Your shop front is one of the most important touchpoints, as it's the one that's aim is to entice people into the shop! The signage, exterior decor and window display should SHOUT your brand values out loud!
Website
Your website is your virtual shop front, so should be communicating your brand style and personality the loudest!
In 2011, Google proposed another MoT - the
Zero Moment of Truth (ZMOT).
The relationship between the classic decision-making process, marketing objectives, and marketing actions is illustrated as
a funnel (sometimes called the marketing funnel, sales funnel, or conversion funnel).
Digital marketing is
a powerful tool across an entire marketing funnel.
Electroencephalography (EEG)
accounts the most popular neuromarketing technology because of its relatively low costs and manageable equipment requirements. It can measure moment-to-moment changes and identify memory activation in real time.
The consumer arrives at attitudes toward various brands through
an attribute-evaluation procedure, developing a set of beliefs about where each brand stands on each attribute.
Lead magnets
are a valuable piece of information given in exchange for contact information (usually an email address). This could be a free e-book or whitepaper for example.
Must have Requirements labelled as Must have
are critical to the current delivery timebox in order for it to be a success (minimum usable subset)
Could have Requirements labelled as Could have
are desirable but not necessary and could improve the user experience or customer satisfaction for a little development cost.
Tactics used via social media
are helpful for brand awareness at the top, to content marketing in the middle, to customer relationships at the bottom. These are digital marketing tools useful in marketing and sale funnel.
Should have Requirements labelled as Should have
are important but not necessary for delivery in the current delivery timebox
Website and SEO
are important in the awareness phase — you want to get traffic to your website. Creating SEO friendly content such as blogging and getting backlinks will help.
Micro-moments
are intent driven moments of decision making and preference shaping that occur throughout the entire consumer journey.
User Reviews
are often the deciding factor on whether the purchase is made. Roughly half of the people find the information in a user review more important than any marketing material.
Touchpoints
are the individual interactions people have with brands before , during, and after purchase.
External stimuli
are those from outside the person, such as advertising, the smell of food from a nearby restaurant, and a friend's recommendation.
Internal stimuli
are those from within the individual, such as hunger, thirst, or desire.
Importantly, the concept model depicted the loyalty loop
by which concern customers who were satisfied post-purchase developed brand, leading to further brand purchases which bypass the evaluation stage.
Cognition
captures beliefs and memory structures.
The third moment of truth (TMOT)
captures the moment of customer feedback.
Friction
creates feelings of discomfort and can result in moments of truth throughout the customer journey
A stimulus (or trigger)
draws attention to a gap between the person's actual state and desired state of being, shifting the buyer from passive to active
non-compensatory decision rule
eliminates options that fail to meet a minimum requirement on any of the evaluated attributes.
Gaps between what the consumer wanted to experience and the actual experience, particularly in the gap represented a possible barrier to completing the journey, is called
friction
Won't have (this time) Requirements labelled as Won't have,
have been agreed by stakeholders as the leastcritical, lowest-payback items, or not appropriate at that time.
The core issue is still comfortable temperature, but the situational context and pain point
highlights the value of using a smart thermostat to do the job.
Just as we might describe a trip exploring the beaches along some highly popular coast as a journey, customer journeys reflect
how people travel through decision stages, where decision points occur, and what are the experiences like.
Behavior
includes choices and behavioral patterns such as searching for product information online, paying with credit card or mobile payment system, or watching streaming video.
Social media
is a crucial tool to use at the start of the funnel for building brand awareness, but it also great for customer retention and keeping people engaged in your brand.
A belief
is a descriptive thought that a person holds about something.
satisfaction
is a function of the closeness between expectations and the product's perceived performance.
is a powerful tool in a funnel and can be effective at every stage, especially in the retention stage.
The MoSCoW method
is a prioritization technique to reach a common understanding with stakeholders on the importance they place on the delivery of each requirement.
marketing funnel
is a way to frame other marketing strategies and understand how the customer interacts with a company"
Functional magnetic resonance imaging
is considered as the best standard method for neuroscientists, but at the same time as the least practical.
A brand touchpoint
is simply an element or place where a potential customer will experience your brand
The marketers` goal is
is to funnel prospects into buyers, moving them from the top to the bottom of the funnel. The shape reflects the fact that a large number of people will never complete the journey through the funnel
A compensatory decision rule
is used when a person selects the brand with the best score based on waiting and evaluating a set of criteria.
To identify customer needs using the JTBD framework, marketers use the process called
job mapping.
From the customers point of view, need recognition is simple. They need to get things done. They bust the basically hire products to do the job. This is the foundation of the
jobs-to-be-done (JTBD) theory.
Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called
market partitioning
Environment
may include the situation and shopping context (such as website's mobile interface), micro-environmental factors (such as competitive offers), and macro-environmental factors (like the state of the economic environment).
Facial Coding
measures how people feel. The human face registers a wide variety of emotional states (facereader)
EYE TRACKING
measures what people see. It has wide variety of uses in neuromarketing as it provides valuable indications of interest, attention and attraction.
Along with the major moments of truth, Google research also indicated the presence of
micro-moments in the customer journey
Second Moment of Truth (SMOT)
occurs post-purchase as the customers uses the product and evaluate whether the product delivered as expected.
The first moment of truth
occurs when the customer is considering a product at the point of purchase (POP) and their decision is influenced by product characteristics, shelf placement and display attributes and the mix of alternatives available.
A key driver of sales frequency is
product consumption rate - the more quickly buyers consume a product, the sooner they may be back in the market to repurchase it.
A satisfied consumer is more likely to
purchase the product again and will also tend to say good things about the brand to others
Affect
refers to the emotional aspect of attitude.
With the lexicographic heuristic,
the consumer chooses the best brand based on its perceived most important attribute.
Using the elimination-by-aspects heuristic
the consumer compares brands on an attribute selected probabilistically - where the probability of choosing an attribute is positively related to its importance - and eliminates brands that do not meet minimum acceptable cutoffs.
Using the conjunctive heuristic
the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes.
In the age of digital marketing where we can monitor and track our marketing and interactions with customers,
the marketing and sales funnel has become a powerful tool for businesses.
Since its introduction, that TMOT has risen in importance as people take to sites like Yelp to leave reviews and ratings, and Twitter to share brand complaints (and sometimes compliments). In recent years, some have to come to call this moment at
the ultimate moment of truth.
Framing
the way choices and related information are presented to perspective buyers
Companies engage in the research activity of customer journey mapping
to capture the details of consumer decision making, and the resulting customer journey maps are then used along with other target audience insights to guide marketing decision making .
Each element should include the same look, feel and voice of your brand so that eventually people will start to see these elements and think:
to see these elements and think: "Ah yes, I recognize that as an [INSERT BUSINESS NAME HERE] newsletter/video/poster!" That's the reaction you're after!
To find consumer's perceived value for each laptop according to the expectancy-value model,
we multiply customer's weights by customer's beliefs about each computer's attributes.
For example, people tend to use heuristics, also called thinslicing
when they are under time pressure or are experiencing mental fatigue from making several decisions (even if the decision were not related to the purchase).