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Tutorial on the McKinsey/Harvard "Customer Decision Journey" by John Sing
The document discusses the evolution of the customer journey in the digital age, highlighting the shift from traditional purchasing funnels to a customer decision journey influenced by digital interactions. It emphasizes the challenges businesses face in understanding customer behavior, given the overwhelming choices available and the impact of mobile technology. Furthermore, it outlines a 'loyalty loop' model that focuses on customer engagement beyond the purchase stage, suggesting that businesses must adapt to these changes to thrive.
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Tutorial on the McKinsey/Harvard "Customer Decision Journey" by John Sing
- 1. The 2015+ “DigitalCustomer Journey” For your Business and Career © 2014 John Sing – All Rights Reserved John Sing, Director of Technology John Sing, john@johnsing.us
- 2. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 2 What’s Inside: New business reality: “Digital Customer Journey” Mapping the 2014+ customer journey Applying it to our business models Understanding what’s changed 2014+ customer buying behavior
- 3. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 3 A long time ago, there were fewer choices…..
- 4. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 4 The 2014 customer’s problem: (too) many choices! http://digitalvideospace.blogspot.com/2012/11/the-coming-battle-for-second-screen.html
- 5. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 5 Meanwhile, regarding our business models….. McKinsey Marketing and Sales http://media-cache-ec0.pinimg.com/originals/ab/57/f0/ab57f0388e175b0b0f3150a5538f3cbb.jpg
- 6. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 6 Today’s evaluation phase research shows: > 60% consulted others < 9% from advertising http://www.pinterest.com/pin/94083079686991394/
- 7. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 7 > 50% of all internet access via mobile
- 8. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 8 The “Showrooming” effect (auto dealer example): http://marketingland.com/report-6-71748
- 9. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 9 “Showrooming:” Amazon impact physical store retailers: https://www.placed.com/resources/case-studies-and-white-papers Top retailers where customer purchased online on Amazon… After or while seeing item in their retail store
- 10. 2014 – TheNew Customer Journey Learning points for today’s customer © 2014 John Sing – All Rights Reserved 10 Today’s customer views your brand in fundamentally different way Promiscuous in brand relationships – 10s/100s Magnified by mobile-enabled instant internet-scale searching Creates constantly shifting, expanding array of options After purchase, customers aggressively engaged with social media, public reviews, complaints In real-time, customers collaborate / condemn, depending on their experience, at internet scale and speed
- 11. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 11 Thus, we have 2014+ Business Model challenge…..
- 12. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 12 But all is not lost! Even if this is your current state: Percentage of companies that admit they have limited to no understanding on how their customers interact with them digitally http://www.mckinseyonmarketingandsales.com/the-funnel-is-dead-long-live-consumer-decision-journey
- 13. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 13 How we used to attract customers = “The Funnel”: Initial choices Whittle down to final buy Prior to 2009:
- 14. 2014 – TheNew Customer Journey Before vs. Today: © 2014 John Sing – All Rights Reserved http://industriamusical.es/8-casos-de-exito-de-artistas-a-traves-del-social-media/ 14 VS.
- 15. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 15 Could it be… there might be a new buying model? Prior to 2009: “The Funnel” Since 2009: “Customer Decision Journey”
- 16. 2014 – TheNew Customer Journey In 2009, a “new journey” was first identified: © 2014 John Sing – All Rights Reserved 16 “The Customer Decision Journey” Goal: Cut through the noise. Create “The Loyalty Loop”
- 17. 2014 – TheNew Customer Journey 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 17 “Customer Decision Journey”: 22.. EEvvaalluuaattee 33.. BBuuyy 4. Enjoy, Advocate, Bond 11.. CCoonnssiiddeerr Loyalty Loop Let’s summarize this model: And it’s 6-year journey Four “battlegrounds”
- 18. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 18 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
- 19. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 19 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points 1. Consider
- 20. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 20 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
- 21. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 21 1. Consider 1. The customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points
- 22. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 22 2. Evaluate HHiigghhllyy ccrroossss--cchhaannnneell jjoouurrnneeyy Customers add or subtract brands as they evaluate what they want 2/3 of interactions are “pulled” by customer from “earned social media”
- 23. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 23 3. Buy Only stage where discount coupons are effective 40% of customers change their minds at this point Thus these are important: - In-store experience ( physical or virtual ) - Salesperson knowledge / approach - Merchandising, packaging, visual - Comparison shopping - Price check, etc.
- 24. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 24 4. Enjoy / Advocate / Bond: “Loyalty Loop” Loyalty Loop After purchase, customers remain aggressively engaged, publically promoting / assailing, collaborating / crowdsourcing your brand’s development, challenging / shaping your brand’s meaning in marketplace.
- 25. 2014 – TheNew Customer Journey Quiz: “Customer Decision Journey”: four stages 11. . C Coonnssidideerr Initial consideration set Based on branding 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 25 Loyalty Loop 22. . E Evvaaluluaattee 33. . B Buuyy 4. Enjoy, Advocate, Bond Add / subtract choices 2/3 of interactions based on “PULL” Earned social media 40% change mind “In-store” experience Packaging, visual Comparison / price check Word of mouth Reviews Crowdsourcing Active loyalists
- 26. 2014 – TheNew Customer Journey 4. Enjoy, Advocate, Bond © 2014 John Sing – All Rights Reserved 26 1st step: understand our ”Digital Customer Journey” Loyalty Loop 22.. EEvvaalluuaattee 33.. BBuuyy 4. Enjoy, Advocate, Bond 11.. CCoonnssiiddeerr
- 27. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 27
- 28. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 28 http://franksdesigns.com For designing some of the key graphics:
- 29. 2014 – TheNew Customer Journey Notes – Where did this all come from © 2014 John Sing – All Rights Reserved 29 1. June 2009: McKinsey publishes the initial “consumer decision journey” paper: http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey 2. December 2010: Harvard Business School publishes “Branding in the Digital Age – You’re Spending Your (2010 Marketing) Money In All the Wrong Places”: http://hbr.org/2010/12/branding-in-the-digital-age-youre-spending-your-money-in-all-the-wrong-places/ar/1 3. Above evoked industry-wide discussions, prompting this 2012 B2B follow-on: “Aligning with Consumer Decision Journey”: http://hbr.org/web/ideas-in-practice/aligning-with-the-consumer-decision-journey 4. By April 2013, dynamic content management becomes the norm in digital marketing: http://www.mckinsey.com/insights/marketing_sales/the_coming_era_of_on-demand_marketing 5. By May / June 2014, the best practices for Reinventing IT to support digitized customer journey had become clear: http://www.mckinsey.com/insights/business_technology/reinventing_it_to_support_digitization and http://www.mckinsey.com/insights/marketing_sales/digitizing_the_consumer_decision_journey 6. All of this has evolved into a strong body of research, here’s the McKinsey free online versions: http://www.mckinsey.com/client_service/marketing_and_sales/latest_thinking/customer_decision_journey Also do search on “David Edelman”, author of papers #2 and #3 above.
- 30. 2014 – TheNew Customer Journey Counterpoints / enhancements / clarifications to CDJ: 1. People experience a brand in many ways other than purchase and usage of a product. Be aware of that no longer only customers that advocate / denigrate a product. Advocacy therefore is all through the cycle, not just after buying the product (May 2014) : http://blogs.hbr.org/2014/05/marketing-can-no-longer-rely-on-the-funnel/ © 2014 John Sing – All Rights Reserved 30
- 31. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 31 John Sing 32 years of experience in enterprise servers, storage, and software – 2014: Director of Technology, 4cube – Infrastructure for Tomorrow – 2009 – 2014: IBM Executive IT Consultant: IT Strategy and Planning, Enterprise Large Scale Storage, Internet Scale Workloads and Data Center Design, Big Data Analytics, Cloud Infrastructures, High Availability, Disaster Recovery – 2002-2008: IBM IT Data Center Strategy, Large Scale Systems, Business Continuity, HA/DR/BC, IBM Storage – Previous experience 1990s: Enterprise Storage Server Marketing Manager, Planner. International experience in Europe, Asia, IBM Hong Kong, IBM China, Systems Center, Specialist John.sing@4cube.com or john@johnsing.us @john_sing Follow my daily IT research blog – http://www.delicious.com/atsf_arizona Follow me on Slideshare.net: – http://www.slideshare.net/johnsing1 LinkedIn: – http://www.linkedin.com/in/johnsing
- 32. 2014 – TheNew Customer Journey © 2014 John Sing – All Rights Reserved 32
Editor's Notes
- #3 Graphic: http://www.forbes.com/sites/glennllopis/2014/03/24/every-leader-must-be-a-change-agent-or-face-extinction/ In that article, the picture came from: http://blog.lamarsh.com
- #5 http://digitalvideospace.blogspot.com/2012/11/the-coming-battle-for-second-screen.html
- #6 http://media-cache-ec0.pinimg.com/originals/ab/57/f0/ab57f0388e175b0b0f3150a5538f3cbb.jpg
- #7 http://www.pinterest.com/pin/94083079686991394/
- #8 http://liesdamnedliesstatistics.com/2012/05/stats-that-show-why-you-need-a-mobile-first-approach-now.html http://www.digitalbuzzblog.com/2011-mobile-statistics-stats-facts-marketing-infographic By 2014: mobile will be main way of connecting to Internet. Younger consumers are already doing so, various activities ranging from social media to online shopping are increasing on smartphones. Smartphones are becoming the primary camera for more and more people coinciding with Instagram reaching 50 million users while smartphone users are not only always connected but engage in content snacking as this US report says In other words, what we consume may not be different but how we consume it, how long for, how they share it and how they view it will be.
- #9 the role that smartphones play on the auto dealership lot: http://marketingland.com/report-6-71748
- #10 Impact of Amazon on the retailer: http://www.placed.com/press-release/aisle-to-amazon-showrooming-retail-impact
- #12 Source of graphic for the “5 choices”: http://www.aptuss.com/resources/business-owners/ Source of question mark: http://photosinbox.com/sign-and-symbol/question-symbol
- #13 http://www.mckinseyonmarketingandsales.com/the-funnel-is-dead-long-live-consumer-decision-journey As well as these: http://zeitgeistandstuff.wordpress.com/2014/03/03/techs-impact-on-business-and-culture-in-2014/ http://desiregroupe.com/marketing-in-a-connected-world-an-excerpt-from-paul-g-roberts-new-book-how-secrets-of-the-new-economy-2nd-edition/
- #14 Marketers used to think that customers methodically whittled down their purchase choice until a final selection was carefully made. Not only that, but this outdated funnel analogy didn’t account for what happened *after* the purchase, which arguably when all the hard work *really* starts. Marketers still use funnel analysis to track discrete processes (i.e. checkout funnel), but it’s not how we describe the broader customer decision journey any more.
- #15 http://industriamusical.es/8-casos-de-exito-de-artistas-a-traves-del-social-media/
- #16 http://www.inma.org/blogs/value-content/post.cfm/hiking-the-customer-decision-journey Comparing the “funnel” vs. the “Customer Decision Journey” You can see tons of versions here: http://www.pinterest.com/McKMktgSales/customer-decision-journey/
- #17 Instead, our customers (and thus, we as business owners) take a much more iterative, circular, less reductive journey
- #18 Nowadays, we describe the customer’s decision journey as more of an orbit. The farther away the customer ‘travel’s from your brand, the more consideration and pause and departure in their process of deciding to buy from you. The tighter the customer ‘travels’ to your brand, the more loyal they are. Ideally, you of course should be spending (far) less to acquire a customer for a repeat purchase, than you did for their first purchase. Often, your most vocal advocates are your most loyal customers, giving rise to the idea of the “Loyalty Loop”. Key takeaway: these 4 stages are the 4 “battlegrounds” for your customer’s business Customers are more influenced by the “evaluate” and “enjoy / advocate / bond “ stages, than the “consider” and “buy” stages
- #19 Consideration Customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points Customer impressions formed from: Advertising, news, conversation, product experience shapes the “initial consideration set” (only!)
- #20 Consideration Customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points Customer impressions formed from: Advertising, news, conversation, product experience shapes the “initial consideration set” (only!)
- #21 Consideration Customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points Customer impressions formed from: Advertising, news, conversation, product experience shapes the “initial consideration set” (only!)
- #22 Consideration Customer considers an initial set of brands, based on brand perceptions and exposure to recent touch points Customer impressions formed from: Advertising, news, conversation, product experience shapes the “initial consideration set” (only!)
- #23 1. Consideration
- #24 1. Consideration
- #25 With all of this as a context, now when we see the 1000s of articles like this one, they start to make sense: http://www.ducttapemarketing.com/blog/2014/07/17/brand-advocates/
- #26 Nowadays, we describe the customer’s decision journey as more of an orbit. The farther away the customer ‘travel’s from your brand, the more consideration and pause and departure in their process of deciding to buy from you. The tighter the customer ‘travels’ to your brand, the more loyal they are. Ideally, you of course should be spending (far) less to acquire a customer for a repeat purchase, than you did for their first purchase. Often, your most vocal advocates are your most loyal customers, giving rise to the idea of the “Loyalty Loop”. Key takeaway: these 4 stages are the 4 “battlegrounds” for your customer’s business
- #27 Nowadays, we describe the customer’s decision journey as more of an orbit. The farther away the customer ‘travel’s from your brand, the more consideration and pause and departure in their process of deciding to buy from you. The tighter the customer ‘travels’ to your brand, the more loyal they are. Ideally, you of course should be spending (far) less to acquire a customer for a repeat purchase, than you did for their first purchase. Often, your most vocal advocates are your most loyal customers, giving rise to the idea of the “Loyalty Loop”. Key takeaway: these 4 stages are the 4 “battlegrounds” for your customer’s business Customers are more influenced by the “evaluate” and “enjoy / advocate / bond “ stages, than the “consider” and “buy” stages
- #29 Thank you!
- #30 A catch-all list of other articles talking about CDJ and related research: http://wimrampen.com/2013/08/17/marketings-new-key-competence-driving-the-consumers-decision-journey/ http://www.smartinsights.com/content-management/content-marketing-strategy/googles-zmot-brilliant-or-bocks/ http://www.slideshare.net/McK_CMSOForum/customer-experience-journey-webinar-v10-091713
- #33 Thank you!