Beyond Segmentation: Understanding Your Customer’s Path to Purchase
Obviously, a big part of any marketing strategy is gathering the right insights to offer customers a more personalized and relevant experience.
That said… segmentation, personas… yes, they are needed for sure. But, this is just one small piece of the puzzle.
The reality is, only 20% of customers feel that the average brand understands them as individuals (IBM). Why? Today, you need to know your customers like never before. But, traditional customer segments are failing to comprehend how customers interact with your brand—online, on mobile, in store or a combination thereof—through their entire path to purchase.
So, here’s the big question—how can you move beyond simple age- and income-based demographics and really start influencing customer purchase decisions?
Well, as we all know before technology became so pervasive, the path to purchase was simple. The customer would maybe go to a few stores to research, find the best price and then purchase in store. But, with the proliferation of the Internet and mobile devices, the number of channels has multiplied and therefore the path to purchase has become significantly more difficult for brands and retailers to figure out.
So, where do you start? As channels continue to blur, looking at each channel first and segmenting customers accordingly, is a recipe for a fragmented customer understanding and strategy. You need to start by looking at customer behavior along the path to purchase (pre-purchase, purchase, post-purchase) and then consider how to optimize the applicable channel(s) utilized during each phase.
So first, let’s look at the different phases of the path to purchase. For simplicity we’ll keep the number of phases to 3½. Actually, you could call it 4 phases, since receiving or picking up the product can be separated from purchase, as there are now many options available to the shopper.
- Pre-Purchase – this is where the consumer is doing research
- Purchase – the actual movement of funds in exchange for an item
- Pick-up/Receive – physically receiving the product
- Post-Purchase/Support – support after the sale, which could include, installation help for product use and more
As you look at these phases, you should be considering: where do your customers do research, find prices, purchase products, pick up products—online (desktop, tablet or smartphone), in store, on mobile while in store, etc.? And, what about the store specifically, where over 94% of all U.S. retail sales take place (U.S. Census Bureau)? Where are your customers in their path to purchase when they enter the store? Some could be ready to buy or pickup, but others could be just starting their research. Consider the following:
- Maybe a customer wants to grab the product (bought online, pick up in store) and go. As a brand/retailer, how do you facilitate this ending point of the path to purchase? Are you making the customer go through hoops to get the product they’ve already paid for and/or already decided to purchase? And, are your sales associates facilitating or hindering this quest?
- What about the customer that just stopped by the store—no research has occurred yet, are you helping them to learn about the product in store and supporting that via mobile? Since 75% of consumers are using mobile in store, you need to ensure they are getting valuable product information, social media interaction, price comparisons and anything else that would help the consumer accumulate the information they need via their mobile device.
- Perhaps, the customer has done some research, but now they have specific questions and they’d like to test the product themselves before purchasing. Are your sales associates equipped with the necessary knowledge and/or technologies to answer customer questions and offer a level of expertise that customers are looking for? Or, are you giving customers an interactive self-service digital option to help guide them in their decision-making?
So, now that you understand what you need to be focusing on along the path to purchase, how do you gather these insights?
First – Get insights from a panel of representative consumers shopping for your product or at your store of what they think/feel while in the path to purchase. After all, it’s not what you think that matters, it’s what your customers think that matters most. And, what if your understanding of your consumer is actually wrong? It’s also important not to cheat and rely only on secondary research. You need insights into your unique brand and customers and today consumer interactions vary greatly across categories and brands. You need to know what motivations and behaviors are determining where your customers go, what they do, when and why. Secondary research won’t give you these insights. You need qualitative research, specifically mobile research of customers while they are actually in the path to purchase. With a mobile research app and service, you can find out exactly what the consumer is doing as they go through each of the phases defined above. Most importantly, with this research you can understand why they chose the path they did, their pain points and what they thought about your brand versus the competition.
Second – Get analytics in store. See what the numbers say about shoppers entering the store or going by your area. Look to accumulate metrics such as – new visitors, repeat visitors, # of shoppers that entered, number of people at each display and/or aisle, dwell time per product/display, queue at check-out, (multiple check out options? Which is most popular?) the number of purchases per product, etc. Then make sure you are also getting detailed analytics online. This includes mobile use (website and app), including purchases, clicks and page views, selected pickup options and more. It’s of course much easier to get online analytics than in store, but you need to start combining online and mobile analytics with in-store analytics if you want to get a complete picture of your customer.
The complexity of today’s new path to purchase is challenging all of us to take a fresh look at our customers and how, when and why they make a purchase. However, today achieving that goal is exceedingly difficult. One of the most frequent missteps is not using insights directly from the customer to really understand their behavior along their path to purchase. But, this is the only way to start giving your customers the more personalized and relevant experience that they crave.
Are you ready to start moving beyond segmentation and really start influencing customer purchasing behavior?
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