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Clarifying the Path to Purchase

2010 October 27

There is no question more central to the practice of marketing than what makes people buy things.  We have plenty of metrics and models, but confusion still prevails.

Most probably, a lot of the befuddlement is due to the fact that there is really no one true path to purchase.  Different people at different times will interact with different brands and categories in a variety of ways.  We might agonize over the choice of a candy bar and rush through the purchase of health insurance.  There is no law that prevents us from doing whatever we want.

However, just because consumer decision making behavior is often complex and capricious is no reason to just throw up our hands in despair.  There are effective and systematic ways of thinking about how people interact with brands and and metrics to help guide us.

The Path to Purchase

It has long been known that the purchase decision is much more than an event, it’s a process and therefore brands must develop over time.  The evidence for this is overwhelming and there are a wealth of frameworks to describe it (the agency that I work for uses 7 stages in their model).

The following is my own summary, which is probably no better or worse than any other.

Awareness: Awareness may be the most overused term in marketing, so much so that it is often meaningless in common parlance.  In actuality, it is a blanket term that covers a variety of metrics, including aided and unaided awareness, awareness of brand attributes, etc.

Nevertheless, awareness is quite important and has been linked to brand usage.  Although some skeptics point out that brand usage itself promotes awareness and the relationship is somewhat reflexive, awareness is something we can directly control and raising it increases sales.

Another issue is that many brands have nearly total brand awareness, so there is little utility in increasing it.  However, even for the biggest brands, awareness of brand attributes (i.e. quality, value, taste, safety, etc.) remains an important factor for sales and again, raising awareness of an attribute is something that is highly actionable.

Nevertheless, while high brand awareness is certainly necessary to attain high market share, it is far from sufficient.

Consideration: For most categories, consumers develop mental consideration lists (usually 3-5 brands) from which they will make their final purchase decision.  While the consideration phase is less important for low involvement categories like potato chips, it is essential for durables.

Take a car purchase, for instance.  Let’s assume that consumers buy a car every 3 years, surely they will not respond to an offer for the majority of that time.  They will only do so when they are actively in the market (usually the last 6 months or so).  During the rest of the time, they are building their list.

When someone is just starting to shop around, they will be able to rattle of a handful of brands that they are going to research further.  Buying a car is a big deal that requires a lot of research and involves a lot of money, so consumers will use their lists to filter out other brands.  Consideration is often very informationally intensive.

Trial: It should be obvious that neither awareness nor active consideration automatically result in sales.  You still need to close the deal.

A lot of things can help convert consideration into sales.  Well trained and friendly salespeople, in-store displays, point-of-sale advertising discounting, sampling and so on.   Of course, digital technology is revolutionizing direct marketing, so now we can optimize conversions to purchase better than ever.

Loyalty: Retaining customers is more profitable than going out and acquiring new ones, so inspiring loyalty is crucial for every brand.  Of course, this is about much more than promotion.  Marketers need to make sure that the product is delivering what the consumer wants.

Of course, promotion can play an important part as well.  Many categories are essentially portfolios. People tend to frequent several restaurants, drink several brands of soft drinks etc.  Most families even have more than one car.

Additionally, recent neurological research shows that marketing actions can actually effect product performance (discounting tends to worsen it while promotion can enhance it).

Therefore it is important to maintain a relationship with the consumer after purchase.  This can take a variety of forms such as keeping them informed about product benefits, helping them to get the most out of their purchase (Apple stores do a phenomenal job with this) and offering them rewards through loyalty programs.

Advocacy: The ideal customer is one who not only buys your product, but goes out and recommends it to others.  Non-traditional promotion such as events and social media thrive in this area.

Just like the previous stages, advocacy has specific metrics that can be monitored.  The most popular is the Net Promoter Score, however it is fairly new and there are some detractors.  This article gives a good overview of why some are skeptical.

Nevertheless, advocacy is increasingly recognized as an important marketing objective, however you want to measure it.

A Non-Linear Process

People often make the mistake of assuming that the brand pathway is a linear process.  They treat it as a kind of marketing version of an online role playing game, where consumers start out with zero awareness and then gain experience points and artifacts on their way to becoming a advocating consumers.

Alternatively, it is often used as a marketing checklist, as if each stage needs to be marked off for a marketing program to be complete.  To make matters worse, this is often an exercise in post-rationalization where planners try to imagine how their campaign meets all of the requirements.

Both ideas are wrong.  We make brand models not because they’re accurate, but because they’re useful.  They can guide our  decision making by helping us to clarify our goals.  Strategy is about choices and we analyze consumers so that we can evaluate where to focus our energies.

Just because we make models doesn’t mean that consumers will follow them.  People can advocate products they never bought and can buy products they never heard of before.  On an individual level, the purchase decision is a combustible mix of emotion and rationality.

Planning, Metrics and Conversions

The real value of analyzing how consumer’s sentiments and actions is that we can measure how our brand is doing in various areas.  Therefore a major function of strategic planning must be to determine how success will be evaluated.

Fortunately, we’re getting much better at metrics and devising ways to convert them into profits.  Digital media, social marketing and semantic technologies will only improve our ability to understand the marketplace and how our brands interact with consumers.

If our brand has high awareness but isn’t converting into sales, then a big TV campaign probably won’t do very much good.  If our market share is strong, but advocacy is weak, we probably need to work on our relationship with our customers.  Once we’ve determined what we need to achieve, we can use improved technology to judge performance.

This last point is especially pertinent, because we need to adapt ROI metrics to objectives if they are to be relevant. The big change is that whereas before we focused our planning efforts on choosing media platforms, now we must focus our energies on achieving specific brand objectives.

Moving the Needle

What’s missing in much of the discussion about managing communications is focus.  I’ll repeat what I wrote above, strategy is about choices.  No marketing program can achieve everything and it is pure folly to even try.  Moreover, no marketing channel, whether it is TV, direct response, social media or anything else can achieve every marketing task effectively.

What we can do is evaluate where our brands are doing well and where they can improve.  If we can move the needle and gain ground, we’re doing our job and doing it well.

As the Ad Contrarian pointed out in this excellent post, one of the downsides of all the new kit is that marketing is in danger of losing its soul.  The real value is not in models, or technologies or even metrics, it’s identifying concrete objectives and thinking up creative ways to solve problems.

– Greg

Note: Special thanks to Stuart Nicholson for his help with this post.

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