Leveraging Location Data to Build Consumer Profiles
The secret to getting more customers
1. School of Management and Marketing
The secret to getting more customers
Talk for Bathurst City Council, Business
Presentation series: Professor Steven
D’Alessandro
2. School of Management and Marketing
Overview of the presentation
• Finding a balance between new customers and repeat customers
• Simple, yet powerful methods to bring in customers
• How your best customers can help build you business for you
• Easy, low cost ways to find out what your customers want
• How to use the web to build your customer base
• If you all enrol in a diploma of marketing at CSU, you can learn
this in detail.
3. School of Management and Marketing
Finding a balance between new customers and
repeat customers.
And
How your best customers can help build you
business for you
4. School of Management and Marketing
Why don’t people buy my products and services?
• Think of how a person makes a decision.
• Consider direct, indirect and share of wallet competition.
• Start with awareness and then consideration sets
• Rule of thumb: Consumers usually only remember well thought of
brands and providers.
• You need to have a market position, you cannot be all things to all
people.
5. School of Management and Marketing
Top reasons for switching mobile phone
providers in 2011
Poor network
coverage* %
Poor customer
service %
I wanted a new
handset%
18-24 43.0 23.9 35.2
25-34 47.7 26.7 33.3
34-45 40.8 33.9 30.9
45-64 35.4 27.3 27.9
55-64 34.3 34.9 27.6
65 and over 31.2 32.7 27.3
Total 38.6 30.5 30.0
Source: Macquarie University, State of the Mobile Nation (2012) accessed researchoutput.csu.edu.au/dtl_publish/36/62836.html
On May 4, 2015, * N=1600, respondents could nominate more than one reason.
6. School of Management and Marketing
Examples of possible attributes used
as purchase criteria
• Speed, price, laptop or
desktop, DVD drive
Personal
computers
• Size, water-resistant,
alarms, wrist bandWatches
• Taste, size, preparation
requirement, healthiness
Frozen
dinner
• Strength, colour, design,
absorbency, price
Paper
towels
7. School of Management and Marketing
Using an ANCAP safety rating as a
minimum acceptance criteria
8. School of Management and Marketing
Purchase decision
• What to purchase (model or brand)
• Where to purchase (retailer or online)
• Method of purchase
• Timing of purchase
9. School of Management and Marketing
Example purchase a new mobile
phone
Source: MQ State of the Mobile Nation, accessed at http://www.prepaidmvno.com/wp-
content/uploads/2012/05/Macquarie-University-report-State-of-the-Mobile-Nation.pdf on May 5, 2015
Mobile Phone Switching results
What they buy 85% on contract (40% 24 month cap plan). Telstra 47%, Optus
28%, Vodafone 19%.
Where they buy Nearly half (i.e. 48.8%) prefer to buy their phone and plan from
their local telecommunications carrier store;
15% prefer to buy their mobile phone and plan over the phone;
14.75% prefer to buy their mobile phone and plan online;
10% prefer to buy their phone and plan through a reseller
When they buy 68% will switch providers in less than a week.
How often they buy 16% switched in the last 12 months.
10. School of Management and Marketing
The evoked set as a subset of all brands in a
product class
12. School of Management and Marketing
Getting people to come back
1. First manage expectations
2. Encourage brand loyalty by habit (get them to purchase more at the
beginning)
3. Develop a customer relationship strategy
13. School of Management and Marketing
Post-purchase evaluation
Prior
expectations
Product /service
performance is
below
expectations
Product / service
performance
exceeds
expectations
Product /service
performance
matches
expectations
Product
performance
Neutral feeling DissatisfactionSatisfaction
14. School of Management and Marketing
Three types of expectations
Equitable performance
expectation
What the performance should
ought to be
Ideal performance
expectation
The best possible
performance
Expected performance
The likely level of product
performance
16. School of Management and Marketing
Getting consumers into the habit
• Remind them, of a service appointment, need to check something have
something examined.
• Provide ‘economy packs’ , free or reduced extra night stays, loyalty accounts
• 20/80 Rule
• Provide incentives for consumers to sign up family and friends.
• As the consumers use your service and product more they become brand loyal
and can help you with positive word of mouth (WOM).
• Keep an accurate database of customer records and purchases.
• Celebrate important events with consumers.
18. School of Management and Marketing
Simple, yet powerful methods to bring in customers
19. School of Management and Marketing
Central and peripheral routes to persuasion
theory
• More effective for high
involvement purchases
• Consumer more likely to
evaluate information and
products carefully when the
product is more relevant to them
Central
route to
persuasion
• More effective for low
involvement purchases
• Consumer more likely to engage
in limited information search &
evaluation when purchase is less
important to them
Peripheral
route to
persuasion
21. School of Management and Marketing
Elaboration likelihood
model (ELM)
• Suggests a person’s level of involvement during message
processing is critical in determining which route to persuasion is
likely to be effective.
• Therefore, for high involvement purchases, marketers should use
arguments stressing the attributes of their product – the central
route.
• For low involvement purchases, the emphasis should be on the
presentation of the message – the peripheral route.
22. School of Management and Marketing
The Elaboration Likelihood Model
Involvemen
t
Central
Route
Peripheral
Route
Peripheral
Cues
Influence
Attitudes
Message
Arguments
Influence
Attitudes
HIGH LOW
23. School of Management and Marketing
Segment Consumers by Involvement
e.g. yoghurt
• low involvement snack food group
• high involvement health food group
e.g. wine
• low involvement party drink situation
• high involvement wine “buff”
24. School of Management and Marketing
High and Low Involvement Products
High involvement
• Dresses
• Washing machines
• TVs
• Cars
Low involvement
• Instant coffee
• Bubble bath
• Breakfast cereal
• Toothpaste
• Soap
26. School of Management and Marketing
Consumers may be Active and Passive
High Involvement -
Active
Low Involvement -
Passive
1. Consumers are
information processors
1. Consumers learn
information at random
2. Consumers are
information seekers
2. Consumers are
information gatherers
3. Consumers are an
active advertising
audience and as a result
the effect of advertising
on the consumer is weak
3. Consumers represent a
passive audience for
advertising; as a result the
effect of advertising is
strong
27. School of Management and Marketing
Consumers may be Active and Passive
High Involvement -
Active
Low Involvement -
Passive
4. Consumers evaluate
brands before buying
4. Consumers buy first;
may evaluate brands after
purchase
5. Consumers seek to
maximise expected
satisfaction; consumers
compare brands to see
which provide most
benefits related to needs
and buy based on multi-
attribute comparisons
5. Consumers seek some
acceptable level of
satisfaction; as a result,
consumers buy the brand
least likely to give them
problems and use few
attributes
28. School of Management and Marketing
Consumers may be Active and Passive
High Involvement -
Active
Low Involvement -
Passive
6. Personality and lifestyle
characteristics are important
because the product is
closely tied to the
consumer’s identity and
belief system
6. Personality and lifestyle
are not important because
the product is not closely
linked to the consumer’s
identity and belief system
7. Reference groups
influence consumer
behaviour because of the
importance of the product
to group norms and values
7. Reference groups exert
little influence on product
choice because products are
unlikely to be related to
group norms and values
29. School of Management and Marketing
Easy, low cost ways to find out what your customers want
30. School of Management and Marketing
Start with an overview of the market
• A market= number of people (households) x ability (disposable income) x willingness to
purchase (%).
• Many figure on market potential (maximum) market size are available from the ABS.
• You can combine this with online survey data to come up with reasonable estimates.
• Form networks to investigate export or out of territory markets.
• CSU academics can be helpful here as well..
31. School of Management and Marketing
An estimate of bill shock in the mobile phone market in Australia
Source Unit Assumptions Estimate
Population 18+ March 2011 ABS million 17.2 17.2
Population 18+ with mobile
phone
survey million 90% 15.5
Population experiencing bill
shock
survey million 45% 7
Median overspend on bill survey $ $40.00 40.0
Median occurrence of bill
shock per year
survey 2 2 2
Median cost of bill shock per
year, per customer
survey $ $80.00 80.00
Estimate of bill shock estimate $ million 560
Note: Australian Bureau of Statistics (ABS) 31010DO002_201103 Australian Demographic Statistics, Mar 2011. Other estimates based on the
Macquarie University Survey data. (Seven million experienced bill shock, or 45% of all mobile phone users × median overspend per bill $40 × 2
(median occurrence of bill shock) $560 million dollars.
32. School of Management and Marketing
Identifying why consumer buy. Observation
Phenomenon Example
Physical action A shopper’s movement pattern in a store
Verbal behaviour Statements made by airline travellers while waiting in line
Expressive behaviour Facial expressions, tones of voices and other forms of body
language
Spatial relations and
locations
How close visitors at an art museum stand to paintings
Temporal patterns How long fast-food customers wait for their orders to be served
Physical objects What food is consumed in a restaurant
Verbal and pictorial records Bar codes on product packages
33. School of Management and Marketing
An industry example of observation
The use of observational research by Australian companies3
When developing food products, companies such as Sanitarium, Campbell Arnott’s and Heinz often use at-home research. Sanitarium
brand managers may arrange to visit half-a-dozen homes at 7 a.m. to observe consumers’ breakfast routines, and Heinz used at-home
research for its steam-fresh vegetable bags. A Heinz spokeswoman says: ‘It was important to see how people used the product in their
home situation when it wasn’t precisely prepared in a [company] kitchen and observe the sensory aspect of how they found the product.
34. School of Management and Marketing
Identifying why customers buy: other evidence
• Determining sources of influence. Can use:
• Warranty cards.
• In depth research.
• Online data
• The metadata we all provided on the webpages, tags on photographs in facebook, likes and dislikes also have value
to marketers. Using software called TagMan, Virgin Atlantic is able to determine which visits to which websites
ultimately lead to purchases, an approach also used by Travel agent Thomas Cook, who saved some 25% of their
affiliate marketing budget using such an approach19.
• Online is how most people now search and purchase accommodation, automobiles, real estate and select
universities.
35. School of Management and Marketing
How to use the web to build your customer base
36. School of Management and Marketing
Strategic marketing applications of Word-of-
Mouth (WOM): Online
• Can be journalists, travel writers, media
personalities, celebrities, groups. Use
Twitter facebook and social media, link to
offers on website
• Bathurst Liquid Molly 12 hour race
Target opinion
leaders
• Any strategy that encourages individuals
to pass on a marketing message to others
• Marriage of WOM & electronic
communication (email, sms, blogging)
• e.g. Haunted Picton; A Documentary on
Australia's Most Haunted Town
Viral marketing
40. School of Management and Marketing
There is so much more to tell you. So please ask us:
• Contact Emma Simpson, Business Liaison Officer.
• 02 6338 4263, emsimpson@csu.edu.au
• Me (details next slide)
• Regional Entrepreneurship and Development research cluster.
• See http://www.csu.edu.au/faculty/business/research/research-areas/regional-buiness
• Professor Mark Morrison, 02 6338 4253, mmorrison@csu.edu.au
• CM3 (IT, analytics and business solutions:
• Professor Bernard Pailthrope, director, 02 6338 6247 bpailthorpe@csu.edu.au
•
41. School of Management and Marketing
My contact details
Professor Steven D'Alessandro
School of Management and Marketing
Panorama Avenue
Bathurst, NSW 2795
Australia
Tel: +61 2 6338 4286
Mobile +61488096522
Email: sdalessandro@csu.edu.au
www.csu.edu.au
The Elaboration Likelihood Model (ELM). The ELM suggests that consumers will scrutinize claims more in important situations than in unimportant ones.
“Elaboration” involves the consumer thinking about the object—e.g., the product in an advertisement—and thinking about as many related issues as possible. The ELM suggests that for “unimportant” products, elaboration will be low, and thus Paul Hogan is able to endorse Coke without having any special credentials to do so. However, for expensive or important products (e.g., a pain reliever given to a child) elaboration is likely to be more extensive, and the endorser is expected to be “congruent,” or compatible, with the product.
For example, a basket ball player is likely to be effective in endorsing athletic shoes, but not in endorsing automobiles. On the other hand, a newspaper auto columnist would be successful in endorsing cars, but not athletic shoes.
